HP Inc. ($HPQ) Earnings (Q2 FY22)

HP Inc. ($HPQ) Earnings and Opinion:


HP is a company in the Technology sector and operates in the Computer Hardware industry. The company provides personal computing and other access devices, imaging and printing products, and related technologies, solutions, and services in the United States and Internationally. HP was founded in 1939 and is currently headquartered in Palo Alto, California. The company was first traded on the stock market in 1957.

HP Earnings Results:

  • Revenues of $14.66B missing expectations of $15.6B
  • Operating Profit of $1.39B beating expectations of $1.36B
  • Adjusted EPS of $1.04 in line with expectations of $1.04
  • Free Cash Flow of $300M missing expectations of $1.3B
  • EPS Guidance missed for both Q3 and FY
Opinion:

HP is currently moving over 5% lower, after reporting earnings after the closing bell today. The company had a mixed earnings report, but a lot of this lies on the acquisition they just picked up. HP agreed to acquire Plantronics, Inc. ($POLY) this week. This is going to skew the financials for a little while until everything gets settled. The guidance missing was accredited to this. The EPS came in right on the money with expectations and Operating Profit had a slight beat. This report was similar to Dell, as it seems computer sales have seemed to slow down a little bit in the past quarter. I think it wasn't as bad as a report as investors are taking it right now. As far as valuation goes, the P/E ratio sits at 6.58, which is pretty cheap and P/S sits at 0.60 which is also pretty cheap. The growth is volatile and seems to be all over the place. Current ratio is sitting at a worry-some level of 0.81. Cash is also outweighed by debt which also may be a bit of a problem. In my opinion, I think HP is a great company. It has established itself nicely and has put together a solid business. Growth is going to be minimal for a company thats this established, but the acquisition of $POLY is something that really excites me. I am looking forward to see how they will use this to their benefit and continue to grow as a business. I think the stock is currently undervalued and has some upside with it. I am long HP.


*Information from Yahoo Finance, Consensus Gurus, Motley Fool, CMLVIZ

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