HPQ : NYSE : Technology
$14.67 | %
Today's Range: 0.0 - 0.0
Avg. Daily Volume: 1.22076E7
01/23/17 - 4:01 PM ET

Financial Analysis


HP INC's gross profit margin for the fourth quarter of its fiscal year 2016 has significantly decreased when compared to the same period a year ago. Even though sales increased, the net income has decreased, representing a decrease to the bottom line. HP INC has weak liquidity. Currently, the Quick Ratio is 0.69 which shows a lack of ability to cover short-term cash needs. The liquidity decreased from the same period a year ago, despite already having weak liquidity to begin with. This would indicate deteriorating cash flow.

At the same time, stockholders' equity ("net worth") has significantly decreased by 114.00% 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 Q4 FY16 Q4 FY15
Net Sales ($mil)12512.012266.0
EBITDA ($mil)573.01853.0
EBIT ($mil)490.0846.0
Net Income ($mil)492.01323.0


Balance Sheet Q4 FY16 Q4 FY15
Cash & Equiv. ($mil)6288.017433.0
Total Assets ($mil)29010.0106882.0
Total Debt ($mil)6836.024665.0
Equity ($mil)-3889.027768.0


Profitability Q4 FY16 Q4 FY15
Gross Profit Margin18.9727.29
EBITDA Margin4.5715.1
Operating Margin3.926.9
Sales Turnover1.660.48
Return on Assets8.64.26
Return on Equity0.013.38
Debt Q4 FY16 Q4 FY15
Current Ratio0.981.23
Debt/Capital2.320.47
Interest Expense70.058.0
Interest Coverage7.014.59


Share Data Q4 FY16 Q4 FY15
Shares outstanding (mil)1712.091803.72
Div / share0.120.18
EPS0.30.83
Book value / share-2.2715.39
Institutional Own % n/a n/a
Avg Daily Volume1.2185434E71.1804981E7

Valuation


HOLD. This stock's P/E ratio indicates a discount compared to an average of 15.16 for the Computers & Peripherals industry and a significant discount compared to the S&P 500 average of 25.41. 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 9.71 Peers 15.16   HPQ 7.88 Peers 9.75

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 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 9.12 Peers 13.72   HPQ 2.36 Peers 1.65

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 significant 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 4.45   HPQ -24.64 Peers -9.81

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 0.53 Peers 2.56   HPQ -6.27 Peers 6.77

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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