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Palo Alto, California-based HP Inc. (HPQ) provides personal computing and other digital access devices, imaging and printing products, and related technologies, solutions, and services. With a market cap of $32.9 billion, the company offers products which includes laser and inkjet printers, scanners, copiers and faxes, personal computers, workstations, storage solutions, computing, and printing systems.
Companies worth $10 billion or more are generally described as “large-cap stocks,” and HPQ perfectly fits that description, with its market cap exceeding this mark, underscoring its size, influence, and dominance within the computer hardware industry. HP is expanding its market presence through a wide range of innovative products targeting both commercial and consumer markets. The company's focus on personal systems, especially in the commercial PC sector, is driving growth in both unit sales and revenue. HP's commitment to innovation is evident in the introduction of AI-powered PCs and hybrid systems designed to meet the changing needs of hybrid work and learning settings.
Despite its notable strength, HPQ slipped 15% from its 52-week high of $39.80, achieved on Nov. 25. Over the past three months, HPQ stock has declined 1.7%, underperforming the Technology Select Sector SPDR Fund’s (XLK) 9.5% gains during the same time frame.
In the longer term, shares of HPQ rose 12.5% on a YTD basis and climbed 9.9% over the past 52 weeks, underperforming XLK’s YTD gains of 24.7% and 25.2% returns over the last year.
To confirm the bearish trend, HPQ is trading below its 50-day moving average since late November. The stock has been trading below its 200-day moving average recently.
HPQ is facing challenges in the current market environment, including a decline in consumer PC shipments due to economic uncertainties and cautious consumer spending. Although the commercial PC segment is showing growth, sustained demand is uncertain. The printing segment is also experiencing difficulties, with commercial printing revenues slipping and limited long-term growth potential in Supplies revenues as businesses turn to digital documentation solutions.
On Nov. 26, HPQ shares closed down marginally after reporting its Q4 results. Its adjusted EPS of $0.93 did not meet Wall Street expectations of $0.94. The company’s revenue stood at $14.1 billion, up 1.7% year over year. For Q1, HP expects its adjusted EPS to range from $0.70 to $0.76. The company expects full-year adjusted EPS to be between $3.45 and $3.75.
In the competitive arena of computer hardware, Dell Technologies Inc. (DELL) has taken the lead over HPQ, showing resilience with a 54.6% uptick on a YTD basis and solid 65.2% gains over the past 52 weeks.
Wall Street analysts are moderately bullish on HPQ’s prospects. The stock has a consensus “Moderate Buy” rating from the 14 analysts covering it, and the mean price target of $36.96 suggests a potential upside of 9.2% from current price levels.
