3 Stocks Reiterated As A Hold: HPQ, NFLX, NTAP

Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

NEW YORK ( TheStreet) -- TheStreet Ratings team reiterated 3 stocks with a hold rating on Thursday based on 32 different data factors including general market action, fundamental analysis and technical indicators. The in-depth analysis of these ratings decisions goes as follows:

Hewlett-Packard Co:

Hewlett-Packard (NYSE: HPQ) has been reiterated by TheStreet Ratings as a hold with a ratings score of C+. According to TheStreet Ratings team: The company's strengths can be seen in multiple areas, such as its solid stock price performance, impressive record of earnings per share growth and attractive valuation levels. However, as a counter to these strengths, we also find weaknesses including weak operating cash flow and poor profit margins.

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:
  • Investors have apparently begun to recognize positive factors similar to those we have mentioned in this report, including earnings growth. This has helped drive up the company's shares by a sharp 33.28% over the past year, a rise that has exceeded that of the S&P 500 Index. Regarding the stock's future course, our hold rating indicates that we do not recommend additional investment in this stock despite its gains in the past year.
  • HEWLETT-PACKARD CO has improved earnings per share by 20.0% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, HEWLETT-PACKARD CO turned its bottom line around by earning $2.62 versus -$6.45 in the prior year. This year, the market expects an improvement in earnings ($3.72 versus $2.62).
  • The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Computers & Peripherals industry and the overall market on the basis of return on equity, HEWLETT-PACKARD CO has underperformed in comparison with the industry average, but has exceeded that of the S&P 500.
  • The gross profit margin for HEWLETT-PACKARD CO is currently lower than what is desirable, coming in at 27.20%. Regardless of HPQ's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, HPQ's net profit margin of 4.66% is significantly lower than the industry average.
  • Net operating cash flow has decreased to $2,995.00 million or 15.77% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.

Hewlett-Packard Company, together with its subsidiaries, provides 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 $63.8 billion and is part of the technology sector and computer hardware industry. Shares are up 20.7% year-to-date as of the close of trading on Wednesday.

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

Netflix Inc:

Netflix (Nasdaq: NFLX) has been reiterated by TheStreet Ratings as a hold with a ratings score of C+. According to TheStreet Ratings team: The company's strengths can be seen in multiple areas, such as its robust revenue growth, solid stock price performance and impressive record of earnings per share growth. However, as a counter to these strengths, we find that the company has favored debt over equity in the management of its balance sheet.

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:
  • The revenue growth came in higher than the industry average of 4.1%. Since the same quarter one year prior, revenues rose by 24.0%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • Powered by its strong earnings growth of 1620.00% and other important driving factors, this stock has surged by 92.81% over the past year, outperforming the rise in the S&P 500 Index during the same period. Although NFLX had significant growth over the past year, our hold rating indicates that we do not recommend additional investment in this stock at the current time.
  • NFLX's debt-to-equity ratio of 0.61 is somewhat low overall, but it is high when compared to the industry average, implying that the management of the debt levels should be evaluated further. Regardless of the somewhat mixed results with the debt-to-equity ratio, the company's quick ratio of 0.74 is weak.
  • Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. When compared to other companies in the Internet & Catalog Retail industry and the overall market, NETFLIX INC's return on equity is below that of both the industry average and the S&P 500.

Netflix, Inc. operates as an Internet television network, is engaged in the Internet delivery of TV shows and movies directly on TVs, computers, and mobile devices in the United States and internationally. Netflix has a market cap of $25.0 billion and is part of the services sector and media industry. Shares are up 14.9% year-to-date as of the close of trading on Wednesday.

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

NetApp Inc:

NetApp (Nasdaq: NTAP) has been reiterated by TheStreet Ratings as a hold with a ratings score of C+. According to TheStreet Ratings team: The company's strengths can be seen in multiple areas, such as its impressive record of earnings per share growth, expanding profit margins and increase in net income. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself and weak operating cash flow.

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:
  • NETAPP INC has improved earnings per share by 25.5% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, NETAPP INC increased its bottom line by earning $1.85 versus $1.37 in the prior year. This year, the market expects an improvement in earnings ($2.96 versus $1.85).
  • The gross profit margin for NETAPP INC is rather high; currently it is at 68.17%. It has increased from the same quarter the previous year. Despite the strong results of the gross profit margin, NTAP's net profit margin of 11.94% significantly trails the industry average.
  • The net income growth from the same quarter one year ago has exceeded that of the Computers & Peripherals industry average, but is less than that of the S&P 500. The net income increased by 13.3% when compared to the same quarter one year prior, going from $173.80 million to $197.00 million.
  • Net operating cash flow has decreased to $369.50 million or 18.89% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.
  • In its most recent trading session, NTAP has closed at a price level that was not very different from its closing price of one year earlier. This is probably due to its weak earnings growth as well as other mixed factors. Looking ahead, we do not see anything in this company's numbers that would change the one-year trend. It was down over the last twelve months; and it could be down again in the next twelve. Naturally, a bull or bear market could sway the movement of this stock.

NetApp, Inc. engages in design, manufacture, and marketing of networked storage solutions. The company supplies enterprise storage and data management software and hardware products and services. NetApp has a market cap of $12.1 billion and is part of the technology sector and computer hardware industry. Shares are down 11.9% year-to-date as of the close of trading on Wednesday.

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

Apple Could Get to Zero Net Cash This Way, Says UBS

Apple Could Get to Zero Net Cash This Way, Says UBS

Carl Icahn Urges Xerox Shareholders to Block Fuji Deal

Carl Icahn Urges Xerox Shareholders to Block Fuji Deal

Intermediate Trade: HP Inc.

Intermediate Trade: HP Inc.

Best Stocks to Buy Now That the Dow Has Cratered

Best Stocks to Buy Now That the Dow Has Cratered

Investors Learned One Valuable Lesson Watching the Dow's 1,175-Point Crash

Investors Learned One Valuable Lesson Watching the Dow's 1,175-Point Crash