HP Inc. (HPQ) Hit a 52 Week High, Can the Run Continue?

Have you been paying attention to shares of HP (HPQ)? Shares have been on the move with the stock up 12.2% over the past month. The stock hit a new 52-week high of $32.55 in the previous session. HP has gained 43.6% since the start of the year compared to the 16% move for the Zacks Computer and Technology sector and the 25.3% return for the Zacks Computer - Micro Computers industry.

What's Driving the Outperformance?

The stock has an impressive record of positive earnings surprises, as it hasn't missed our earnings consensus estimate in any of the last four quarters. In its last earnings report on August 26, 2026, HP reported EPS of $0.83 versus consensus estimate of $0.75.

For the current fiscal year, HP is expected to post earnings of $3.23 per share on $59.67 in revenues. This represents a 3.53% change in EPS on a 7.92% change in revenues. For the next fiscal year, the company is expected to earn $3.07 per share on $60.08 in revenues. This represents a year-over-year change of -4.95% and 0.68%, respectively.

Valuation Metrics

While HP has moved to its 52-week high over the past few weeks, investors need to be asking, what is next for the company? A key aspect of this question is taking a look at valuation metrics in order to determine if the company has run ahead of itself.

On this front, we can look at the Zacks Style Scores, as they provide investors with an additional way to sort through stocks (beyond looking at the Zacks Rank of a security). The individual style scores for Value, Growth, Momentum and the combined VGM Score run from A through F. The idea behind the style scores is to help investors pick the most appropriate Zacks Rank stocks based on their individual investment style.

HP has a Value Score of A. The stock's Growth and Momentum Scores are B and B, respectively, giving the company a VGM Score of A.

In terms of its value breakdown, the stock currently trades at 9.9X current fiscal year EPS estimates, which is not in-line with the peer industry average of 25.6X. On a trailing cash flow basis, the stock currently trades at 7.7X versus its peer group's average of 24.3X. Additionally, the stock has a PEG ratio of 1.66. This is good enough to put the company in the top echelon of all stocks we cover from a value perspective, making HP an interesting choice for value investors.

Zacks Rank

We also need to look at the Zacks Rank for the stock, as this supersedes any trend on the style score front. Fortunately, HP currently has a Zacks Rank of #2 (Buy) thanks to a solid earnings estimate revision trend.

Since we recommend that investors select stocks carrying Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B, it looks as if HP fits the bill. Thus, it seems as though HP shares could have potential in the weeks and months to come.

How Does HPQ Stack Up to the Competition?

Shares of HPQ have been soaring, and the company still appears to be a decent choice, but what about the rest of the industry? One industry peer that looks good is Dell Technologies Inc. (DELL). DELL has a Zacks Rank of #2 (Buy) and a Value Score of C, a Growth Score of A, and a Momentum Score of C.

Earnings were strong last quarter. Dell Technologies Inc. beat our consensus estimate by 41.65%, and for the current fiscal year, DELL is expected to post earnings of $19.21 per share on revenue of $181.85 billion.

Shares of Dell Technologies Inc. have gained 6.4% over the past month, and currently trade at a forward P/E of 25.62X and a P/CF of 34.31X.

The Computer - Micro Computers industry is in the top 28% of all the industries we have in our universe, so it looks like there are some nice tailwinds for HPQ and DELL, even beyond their own solid fundamental situation.

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This article originally published on Zacks Investment Research (zacks.com).

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