Why Is HP (HPQ) Down 5.3% Since Last Earnings Report?

A month has gone by since the last earnings report for HP (HPQ). Shares have lost about 5.3% in that time frame, underperforming the S&P 500.But investors have to be wondering, will the recent negative trend continue leading up to its next earnings release, or is HP due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.HPQ's Q3 Earnings Match Estimates, Revenues Increase Y/YHP reported third-quarter fiscal 2025 earnings of 75 cents per share, in line with the Zacks Consensus Estimate. This compares to earnings of 84 cents per share a year ago. These figures are adjusted for non-recurring items.HPQ posted revenues of $13.93 billion for the quarter ended July 2025, missing the Zacks Consensus Estimate by 0.19%. This compares to the year-ago revenues of $13.52 billion.HPQ’s Q3 Top-Line DetailsPersonal Systems (PS) revenues (71% of net revenues) came in at $9.9 billion, up 6% year over year (6% in constant currency). The upside in this division was mainly driven by both commercial and consumer strength, higher ASPs, and momentum in Key Growth Areas.HP’s total PC units rose 5%, with Consumer PS shipments up 8% and Commercial PS shipments up 3%. On the revenue side, Consumer PS grew 8%, while Commercial PS increased 5%.The Printing business (29% of net revenues) generated $4.0 billion, down 4% year over year (down 3% in constant currency). Weakness in Supplies and Commercial Printing led to the decline. Consumer Printing revenues fell 8%, Commercial Printing revenues declined 3%, and Supplies revenues dropped 4% (3% in CC). Total hardware units were down 9%, with Consumer Printing units down 8% and Commercial Printing units down 12%.By geography, HP posted revenue growth in all regions. On a constant currency basis, the Americas rose 1.1%, EMEA was up 1.1%, and Asia Pacific & Japan grew 11% year over year.Operating ResultsSegment-wise, Personal Systems’ (PS) non-GAAP operating margin was 5.4%, down 120 basis points year over year. The Printing division’s non-GAAP operating margin stood at 17.3%, flat year over year despite revenue softness.HP’s overall non-GAAP operating margin from continuing operations was 7.1%, contracting 110 bps compared to the prior-year quarter.Balance Sheet and Cash FlowHP ended the fiscal third quarter with cash and cash equivalents of $2.9 billion and restricted cash of $3 million, up from $2.7 billion at the end of the previous quarter. During the quarter, HP generated $1.66 billion of cash from operating activities and delivered $1.47 billion in free cash flow compared with negative free cash flow in the prior quarter.During the third quarter, the company returned $400 million to shareholders through dividends and share repurchases. Year to date, HP has generated $1.44 billion in free cash flow.HP’s Q4 and FY25 GuidanceFor the fourth quarter of fiscal 2025, the company expects non-GAAP EPS between 87 cents and 97 cents. HPQ anticipates its free cash flow for fiscal 2025 in the range of $2.6-$3.0 billion.How Have Estimates Been Moving Since Then?Since the earnings release, investors have witnessed a flat trend in estimates review.VGM ScoresAt this time, HP has a nice Growth Score of B, a score with the same score on the momentum front. Charting a somewhat similar path, the stock has a grade of A on the value side, putting it in the top quintile for this investment strategy.Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.Outlook HP has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.Zacks' Research Chief Names "Stock Most Likely to Double"Our team of experts has just released the 5 stocks with the greatest probability of gaining +100% or more in the coming months. Of those 5, Director of Research Sheraz Mian highlights the one stock set to climb highest.This top pick is a little-known satellite-based communications firm. Space is projected to become a trillion dollar industry, and this company's customer base is growing fast. Analysts have forecasted a major revenue breakout in 2025. Of course, all our elite picks aren't winners but this one could far surpass earlier Zacks' Stocks Set to Double like Hims & Hers Health, which shot up +209%.Free: See Our Top Stock And 4 Runners UpWant the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report HP Inc. (HPQ): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks