HP Inc (HPQ) receives a weak valuation ranking of 31 from InvestorsObserver's data analysis. The proprietary ranking system focuses on the underlying health of a company through analysis of its stock price, earnings, and growth rate. HPQ has a better value than 31% of stocks based on these valuation analytics. Investors primarily focused on buy-and-hold strategies will find the valuation ranking relevant to their goals when making investment decisions.
Metrics Analysis
HPQ has a trailing twelve month Price to Earnings (PE) ratio of 11 which places it around the histroical average of roughly 15. HPQ is currently trading at a average value due to investors paying around what the stock is worth in relation to its earnings. HPQ's trailing-12-month earnings per share (EPS) of 1.78 does justify its share price in the market. Trailing PE ratios do not factor in the company's projected growth rate, thus, some firms will have high PE ratios caused by high growth recruiting more investors even if the underlying company has produced low earnings so far.
HPQ currently has a 12-month-forward-PE-to-Growth (PEG) ratio of 4.02. The market is currently overvaluing HPQ in relation to its projected growth due to the PEG ratio being above the fair market value of 1. HPQ's PEG comes from its forward price to earnings ratio being divided by its growth rate. Because PEG ratios include more fundamentals of a company's overall health with additional focus on the future, they are one of the most used valuation metrics by analysts.
Summary
All together these valuation metrics paint a pretty poor picture for HPQ at its current price due to a overvalued PEG ratio due to strong growth. The PE and PEG for HPQ are worse than the average of the market resulting in a valuation score of 31.
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