NEW YORK (TheStreet) -- Hewlett-Packard (HPQ) - Get Report fell off Tuesday after Friday's increase a day after the company announced it would cut up to 16,000 additional jobs and also forecast strong free cash flow for the year.
HP CEO Meg Whitman said Thursday that HP's turnaround plan was still on track and the increased job cuts target of 50,000 showed the company continues to find areas to streamline its operations. The company also expects to surpass its free cash flow target of $6 billion to $6.5 billion for the fiscal year that ends in October.
The stock closed at $33.72 on Friday but was down 2.49% to $32.88 at 1:04 p.m.
Must Read: Warren Buffett's 25 Favorite Stocks
Separately, TheStreet Ratings team rates HEWLETT-PACKARD CO as a "hold" with a ratings score of C+. TheStreet Ratings Team has this to say about their recommendation:
"We rate HEWLETT-PACKARD CO (HPQ) a HOLD. The primary factors that have impacted our rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its solid stock price performance, impressive record of earnings per share growth and attractive valuation levels. However, as a counter to these strengths, we also find weaknesses including weak operating cash flow and poor profit margins."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- Investors have apparently begun to recognize positive factors similar to those we have mentioned in this report, including earnings growth. This has helped drive up the company's shares by a sharp 49.69% over the past year, a rise that has exceeded that of the S&P 500 Index. Regarding the stock's future course, our hold rating indicates that we do not recommend additional investment in this stock despite its gains in the past year.
- HEWLETT-PACKARD CO has improved earnings per share by 20.0% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, HEWLETT-PACKARD CO turned its bottom line around by earning $2.62 versus -$6.45 in the prior year. This year, the market expects an improvement in earnings ($3.72 versus $2.62).
- The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Computers & Peripherals industry and the overall market on the basis of return on equity, HEWLETT-PACKARD CO has underperformed in comparison with the industry average, but has exceeded that of the S&P 500.
- The gross profit margin for HEWLETT-PACKARD CO is currently lower than what is desirable, coming in at 27.20%. Regardless of HPQ's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, HPQ's net profit margin of 4.66% is significantly lower than the industry average.
- Net operating cash flow has decreased to $2,995.00 million or 15.77% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.
- You can view the full analysis from the report here: HPQ Ratings Report
Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.