Shares of HP (HPQ, Financial) rallied today, climbing 2.46%. The boost comes after positive sentiment around AI PCs and announced cost-cutting measures in the printer division.
HP Inc. (HPQ, Financial) reported fiscal third-quarter revenue growth of 2.4%, slightly surpassing analyst predictions. However, adjusted earnings per share of $0.83 fell short of expectations. The company also revised its full fiscal year estimates to $3.35-$3.45 on an adjusted basis.
The printer business continued to face challenges with consumer printing sales up 2%, but commercial printing sales declined by 5%, resulting in an overall 3% decrease in the printing segment. CEO Enrique Lores announced plans for more aggressive cost cuts in the printing division, which likely contributed to today's stock rally.
The PC segment also showed growth; consumer PCs were down 1%, while the larger commercial segment grew by 8%. Lores expressed optimism about AI PCs boosting average selling prices and volume into next year.
Despite challenges in the printer segment, optimism for the PC segment drove HP's shares higher today. Currently, the stock trades at $35.62 with a market cap of $34.85 billion and a P/E ratio of 12.03.
From a valuation perspective, HPQ's GF Value stands at $30.02, indicating the stock is modestly overvalued. For more detailed insights, you can visit the [GF Value page](https://www.gurufocus.com/term/gf-value/HPQ).
HPQ has a solid financial health score with a Piotroski F-Score of 9, indicating a very healthy situation. Additionally, its Beneish M-Score of -2.5 suggests the company is unlikely to be a manipulator. However, potential investors should note some medium-level warning signs like the declining revenue per share over the past 12 months and the issuance of new debt worth $3.1 billion over the past three years.
In terms of growth, HPQ has shown a cash flow growth rate of 7.2% over the past five years and a dividend growth rate of 14% over the same period. The company maintains a dividend yield of 3.03%, which is close to a 2-year low.
Overall, HPQ's momentum in the PC segment and cost-cutting measures in the printer division appear to be positive drivers for the stock. However, investors should carefully consider the valuation and financial metrics before making any investment decisions.
