HP Inc. (HPQ), a maker of personal computers and printers, has reported mixed Fiscal first quarter financial results, sending its share price down 3% in after hours trading.
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The Silicon Valley-based company reported earnings per share (EPS) of $0.74, which was in line with Wall Street’s consensus estimate. Revenue in the quarter came in at $13.50 billion, which was above expectations that called for $13.39 billion. Sales rose 2% from a year earlier.
The revenue reported for Fiscal Q1 ended a long sales slump at HP that followed high demand and big sales during the Covid-19 pandemic when people upgraded their laptops and printers as they worked from home. HP formed in 2015 after a split of Hewlett Packard, with HP getting the company’s personal computer (PC) and printer business.
Light Guidance
HP’s forward guidance came in light, with management forecasting EPS for the current quarter of $0.80, which missed Wall Street targets of $0.86. Full-year guidance calls for earnings of $3.60 per share, which is slightly ahead of analysts’ expectations for $3.57, suggesting a stronger performance in the year’s second half.
The market for PCs and laptop computers is mature with a lot of price competition and thin profit margins. So far, HP’s personal computer sales have not caught up to the peak seen in 2021 and 2022, when pandemic sales exceeded $40 billion during both years. PC sales shrank 18% in Fiscal 2024 from the 2022 peak. The other part of HP’s business, its printers and printing supplies, has also seen sales decline.
HPQ stock has risen nearly 20% in the last 12 months.
Is HPQ Stock a Buy?
The stock of HP Inc. has a consensus Hold rating among eight Wall Street analysts. That rating is based on two Buy, five Hold, and one Sell recommendations issued in the past three months. The average HPQ price target of $37.64 implies 13.61% upside from current levels. These ratings are likely to change after the company’s latest financial results.
Read more analyst ratings on HPQ stock
