HPQ : NYSE : Technology
$17.23 | %
Today's Range: 0.0 - 0.0
Avg. Daily Volume: 1.24956E7
03/22/17 - 4:02 PM 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 managed to grow both sales and net income at a faster pace than the average competitor in its industry this quarter as compared to the same quarter a year ago. 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 Volume1.2335637E71.2198938E7

Valuation


HOLD. This stock's P/E ratio indicates a discount compared to an average of 17.27 for the Computers & Peripherals industry and a significant discount compared to the S&P 500 average of 26.73. 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 11.54 Peers 17.27   HPQ 7.35 Peers 11.01

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 10.57 Peers 16.85   HPQ 2.53 Peers 2.29

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 4.90   HPQ -22.73 Peers -6.81

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 0.61 Peers 2.84   HPQ -2.36 Peers 1.00

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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