HPQ : NYSE : Technology
$14.57 | %
Today's Range: 0.00 - 0.00
Avg. Daily Volume: 12,226,800
08/23/16 - 4:01 PM ET

Financial Analysis


HP INC's gross profit margin for the second quarter of its fiscal year 2016 has significantly decreased when compared to the same period a year ago. Sales and net income have dropped, although the growth in net income underperformed the average competitor within the industry, the revenue growth did not. HP INC has weak liquidity. Currently, the Quick Ratio is 0.64 which shows a lack of ability to cover short-term cash needs. The company's liquidity has decreased from the same period last year.

At the same time, stockholders' equity ("net worth") has significantly decreased by 117.87% 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 Q2 FY16 Q2 FY15
Net Sales ($mil)11588.012977.0
EBITDA ($mil)1026.02007.0
EBIT ($mil)941.01004.0
Net Income ($mil)629.01011.0


Balance Sheet Q2 FY16 Q2 FY15
Cash & Equiv. ($mil)4636.014927.0
Total Assets ($mil)25523.0101396.0
Total Debt ($mil)6772.021058.0
Equity ($mil)-4786.026768.0


Profitability Q2 FY16 Q2 FY15
Gross Profit Margin20.127.28
EBITDA Margin8.8515.46
Operating Margin8.127.74
Sales Turnover2.930.82
Return on Assets13.314.62
Return on Equity0.014.26
Debt Q2 FY16 Q2 FY15
Current Ratio0.911.13
Debt/Capital3.410.44
Interest Expense58.034.0
Interest Coverage16.2229.53


Share Data Q2 FY16 Q2 FY15
Shares outstanding (mil)1711.01807.0
Div / share0.120.16
EPS0.380.4
Book value / share-2.814.81
Institutional Own % n/a n/a
Avg Daily Volume1.254409E71.3890493E7

Valuation


HOLD. This stock's P/E ratio indicates a discount compared to an average of 15.51 for the Computers & Peripherals industry and a significant discount compared to the S&P 500 average of 25.30. 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 7.48 Peers 15.51   HPQ 4.49 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 8.96 Peers 13.70   HPQ NM Peers 0.34

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.

 

Neutral. 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's negative PEG ratio makes this valuation measure meaningless.

 
Price/Book
1 2 3 4 5
premium   discount
  Earnings Growth
1 2 3 4 5
lower   higher
HPQ NM Peers 4.09   HPQ -4.44 Peers -18.64

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.

 

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

HPQ is expected to have an earnings growth rate that significantly exceeds its peers.

 
Price/Sales
1 2 3 4 5
premium   discount
  Sales Growth
1 2 3 4 5
premium   discount
HPQ 0.33 Peers 2.35   HPQ -9.58 Peers -1.89

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.

 

Lower. A sales growth rate that trails the industry implies that a company is losing market share.

HPQ significantly trails its peers on the basis of sales growth

 

 

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