Hewlett-Packard Co Stock Hold Recommendation Reiterated (HPQ)

Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.

NEW YORK ( TheStreet) -- Hewlett-Packard (NYSE: HPQ) has been reiterated by TheStreet Ratings as a hold with a ratings score of C-. The company's strengths can be seen in multiple areas, such as its good cash flow from operations and increase in stock price during the past year. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, generally higher debt management risk and disappointing return on equity.

  • EXCLUSIVE OFFER: Jim Cramer's Protégé, Dave Peltier, only buys Stocks Under $10 that he thinks could potentially double. See what he's trading today with a 14-day FREE pass.

Highlights from the ratings report include:
  • Net operating cash flow has increased to $3,556.00 million or 43.79% when compared to the same quarter last year. In addition, HEWLETT-PACKARD CO has also vastly surpassed the industry average cash flow growth rate of -11.16%.
  • Compared to where it was 12 months ago, the stock is up, but it has so far lagged the appreciation in the S&P 500. Despite the fact that it has already risen in the past year, there is currently no conclusive evidence that warrants the purchase or sale of this stock.
  • HPQ, with its decline in revenue, underperformed when compared the industry average of 10.4%. Since the same quarter one year prior, revenues fell by 10.1%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • The debt-to-equity ratio of 1.14 is relatively high when compared with the industry average, suggesting a need for better debt level management. To add to this, HPQ has a quick ratio of 0.70, this demonstrates the lack of ability of the company to cover short-term liquidity needs.
  • Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Computers & Peripherals industry and the overall market, HEWLETT-PACKARD CO's return on equity significantly trails that of both the industry average and the S&P 500.

Hewlett-Packard Company and its subsidiaries provide products, technologies, software, solutions, and services to individual consumers, small-and medium-sized businesses (SMBs), and large enterprises, including customers in the government, health, and education sectors worldwide. Hewlett-Packard has a market cap of $49.1 billion and is part of the technology sector and computer hardware industry. Shares are up 78.5% year to date as of the close of trading on Wednesday.

You can view the full Hewlett-Packard Ratings Report or get investment ideas from our investment research center.

--Written by a member of TheStreet Ratings Staff.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12-months. Learn more.
null

If you liked this article you might like

Hewlett Packard Enterprise Becomes the Latest Tech Titan to Slash Jobs

Microsoft's New Xbox One X Shows It's Done Trying to Please Everyone

Hewlett Packard Enterprise's Meg Whitman Joins Dropbox

Carly Fiorina Will Not Run for Senate in 2018

Carly Fiorina on Not Running for Senate, Cryptocurrency and the Opioid Epidemic