HPQ : NYSE : Technology
$18.785 up 0.16 | 0.83%
Today's Range: 18.635 - 18.82
Avg. Daily Volume: 1.1871E7
04/27/17 - 11:17 AM ET

Financial Analysis


HP INC's gross profit margin for the first quarter of its fiscal year 2017 is essentially unchanged when compared to the same period a year ago. The company has grown its sales and net income during the past quarter when compared with the same quarter a year ago, and although its growth in net income has outpaced the industry average, its revenue growth has not. HP INC has weak liquidity. Currently, the Quick Ratio is 0.66 which shows a lack of ability to cover short-term cash needs. The company's liquidity has increased from the same period last year, indicating improving cash flow.

During the same period, stockholders' equity ("net worth") has increased by 11.85% from the same quarter last year. Overall, the key liquidity measurements indicate that the company is in a position in which financial difficulties could develop in the future.

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Income Statement Q1 FY17 Q1 FY16
Net Sales ($mil)12684.012246.0
EBITDA ($mil)1019.01027.0
EBIT ($mil)935.0948.0
Net Income ($mil)611.0592.0


Balance Sheet Q1 FY17 Q1 FY16
Cash & Equiv. ($mil)6331.03688.0
Total Assets ($mil)28192.025517.0
Total Debt ($mil)6788.06732.0
Equity ($mil)-4327.0-4909.0


Profitability Q1 FY17 Q1 FY16
Gross Profit Margin18.3919.24
EBITDA Margin8.038.38
Operating Margin7.377.74
Sales Turnover1.731.95
Return on Assets8.9214.81
Return on Equity0.00.0
Debt Q1 FY17 Q1 FY16
Current Ratio0.960.9
Debt/Capital2.763.69
Interest Expense73.074.0
Interest Coverage12.8112.81


Share Data Q1 FY17 Q1 FY16
Shares outstanding (mil)1693.381736.94
Div / share0.130.12
EPS0.360.36
Book value / share-2.56-2.83
Institutional Own % n/a n/a
Avg Daily Volume1.2176428E71.2186696E7

Valuation


HOLD. This stock's P/E ratio indicates a discount compared to an average of 17.80 for the Computers & Peripherals industry and a significant discount compared to the S&P 500 average of 24.92. Normally, for additional comaprison, we would look at the price-to-book ratio; however, this company's price-to-book ratio is negative making the value useless for comparisons. The price-to-sales ratio is well below both the S&P 500 average and the industry average, indicating a discount. After reviewing these and other key valuation criteria, HP INC proves to trade at a discount to investment alternatives within the industry.


Price/Earnings
1 2 3 4 5
premium   discount
  Price/Cash Flow
1 2 3 4 5
premium   discount
HPQ 12.10 Peers 17.80   HPQ 7.71 Peers 11.24

Discount. A lower P/E ratio than its peers can signify a less expensive stock or lower growth expectations.

HPQ is trading at a significant discount to its peers.

 

Discount. The P/CF ratio, a stock’s price divided by the company's cash flow from operations, is useful for comparing companies with different capital requirements or financing structures.

HPQ is trading at a significant discount to its peers.

 
Price/Projected
Earnings
1 2 3 4 5
premium   discount
  Price to
Earnings/Growth
1 2 3 4 5
premium   discount
HPQ 11.02 Peers 18.42   HPQ 2.32 Peers 2.09

Discount. A lower price-to-projected earnings ratio than its peers can signify a less expensive stock or lower future growth expectations.

HPQ is trading at a significant discount to its peers.

 

Premium. The PEG ratio is the stock’s P/E divided by the consensus estimate of long-term earnings growth. Faster growth can justify higher price multiples.

HPQ trades at a premium to its peers.

 
Price/Book
1 2 3 4 5
premium   discount
  Earnings Growth
1 2 3 4 5
lower   higher
HPQ NM Peers 5.15   HPQ -22.73 Peers -11.23

Neutral. A lower price-to-book ratio makes a stock more attractive to investors seeking stocks with lower market values per dollar of equity on the balance sheet.

HPQ's P/B is negative making this valuation measure meaningless.

 

Lower. Elevated earnings growth rates can lead to capital appreciation and justify higher price-to-earnings ratios.

However, HPQ is expected to significantly trail its peers on the basis of its earnings growth rate.

 
Price/Sales
1 2 3 4 5
premium   discount
  Sales Growth
1 2 3 4 5
premium   discount
HPQ 0.64 Peers 3.06   HPQ -2.36 Peers -3.18

Discount. In the absence of P/E and P/B multiples, the price-to-sales ratio can display the value investors are placing on each dollar of sales.

HPQ is trading at a significant discount to its industry on this measurement.

 

Higher. A sales growth rate that exceeds the industry implies that a company is gaining market share.

HPQ has a sales growth rate that significantly exceeds its peers.

 

 

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