HP (NYSE:HPQ) Shares Gap Down – Should You Sell?

HP Inc. (NYSE:HPQ) shares gapped down prior to trading on Thursday . The stock had previously closed at $30.52, but opened at $27.86. HP shares last traded at $28.4970, with a volume of 10,904,864 shares traded.

Key Stories Impacting HP

Here are the key news stories impacting HP this week:

• Positive Sentiment: HP reported fiscal third-quarter revenue of $15.7 billion, up 12.5% year over year, while non-GAAP EPS of $0.83 exceeded analyst expectations. Personal Systems revenue increased 18% to $11.8 billion, supported by pricing, premium devices and demand for AI-enabled PCs. HP Inc. Reports Fiscal 2026 Third Quarter Results
• Positive Sentiment: Management raised its fiscal 2026 EPS outlook to $3.19-$3.29 and lifted its free-cash-flow forecast. Fourth-quarter adjusted EPS guidance of $0.69-$0.79 also topped the consensus estimate, helped by planned price increases and expected U.S. tariff refunds. HP forecasts strong fourth-quarter profit on price hikes, US tariff refunds
• Neutral Sentiment: HP signed a multi-year global Wi-Fi patent cross-licensing agreement with Huawei. The deal provides access to technology but may draw attention because Huawei remains subject to U.S. restrictions. HP partners with U.S.-blacklisted Huawei for licensing the Chinese company’s WiFi tech
• Negative Sentiment: Investors are concerned that higher memory-chip costs will squeeze PC profitability. HP’s non-GAAP operating margin declined to 6.5% from 7.1% a year earlier, even as revenue grew, raising questions about how quickly margins can recover. HP stock slides 5% as memory costs pressure PC margins
• Negative Sentiment: GAAP net income fell to $661 million from $763 million, and GAAP EPS declined to $0.71 from $0.80. Printing revenue also decreased 2% to $3.9 billion, highlighting weakness outside the PC business. HP Revenue Rises as Higher Prices Offset Fewer PC Sales
• Negative Sentiment: The earnings beat and raised outlook were insufficient against elevated market expectations. Investors are questioning whether price increases and AI-PC demand can offset rising component costs and fewer traditional PC sales. HP tumbles even as it boosts annual earnings and free cash flow forecast

Wall Street Analyst Weigh In

Several brokerages have commented on HPQ. UBS Group increased their price target on HP from $26.00 to $28.00 and gave the company a “neutral” rating in a report on Thursday. Citigroup boosted their price objective on shares of HP from $20.00 to $25.00 and gave the stock a “neutral” rating in a research note on Thursday, May 28th. Sanford C. Bernstein reiterated a “market perform” rating and issued a $32.00 target price on shares of HP in a research note on Thursday. Evercore set a $32.00 target price on shares of HP in a report on Monday. Finally, Wall Street Zen raised shares of HP from a “hold” rating to a “buy” rating in a research report on Saturday, August 22nd. Two equities research analysts have rated the stock with a Strong Buy rating, eight have issued a Hold rating and five have assigned a Sell rating to the stock. According to MarketBeat.com, the company presently has an average rating of “Reduce” and an average price target of $24.50.

HP Stock Performance

The company has a market cap of $26.24 billion, a P/E ratio of 10.58, a P/E/G ratio of 4.90 and a beta of 1.17. The stock has a 50-day simple moving average of $26.11 and a 200 day simple moving average of $22.63.

HP (NYSE:HPQ) last issued its earnings results on Wednesday, August 26th. The computer maker reported $0.83 EPS for the quarter, beating analysts’ consensus estimates of $0.66 by $0.17. The business had revenue of $15.68 billion during the quarter, compared to analyst estimates of $14.44 billion. HP had a negative return on equity of 581.36% and a net margin of 4.45%.HP’s revenue was up 12.5% on a year-over-year basis. During the same period in the prior year, the company posted $0.75 earnings per share. HP has set its FY 2026 guidance at 3.190-3.290 EPS and its Q4 2026 guidance at 0.690-0.790 EPS. Sell-side analysts anticipate that HP Inc. will post 3.03 earnings per share for the current fiscal year.

HP Announces Dividend

The firm also recently announced a quarterly dividend, which will be paid on Wednesday, October 7th. Investors of record on Wednesday, September 9th will be paid a $0.30 dividend. The ex-dividend date of this dividend is Wednesday, September 9th. This represents a $1.20 dividend on an annualized basis and a yield of 4.2%. HP’s payout ratio is presently 44.28%.

Insider Buying and Selling

In other HP news, insider David P. Mcquarrie sold 21,048 shares of the firm’s stock in a transaction dated Friday, August 7th. The shares were sold at an average price of $29.98, for a total transaction of $631,019.04. Following the completion of the transaction, the insider owned 39,580 shares in the company, valued at $1,186,608.40. This trade represents a 34.72% decrease in their ownership of the stock. The sale was disclosed in a document filed with the Securities & Exchange Commission, which is available at this link. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Insiders have sold a total of 52,620 shares of company stock worth $1,478,622 in the last three months. 0.18% of the stock is owned by company insiders.

Hedge Funds Weigh In On HP

Hedge funds and other institutional investors have recently modified their holdings of the stock. Vanguard Group Inc. grew its position in HP by 1.9% in the fourth quarter. Vanguard Group Inc. now owns 132,094,388 shares of the computer maker’s stock valued at $2,943,063,000 after acquiring an additional 2,435,634 shares during the period. BlackRock Inc. acquired a new stake in shares of HP in the 2nd quarter valued at $2,357,757,000. State Street Corp boosted its stake in shares of HP by 5.3% in the 3rd quarter. State Street Corp now owns 52,703,639 shares of the computer maker’s stock valued at $1,450,245,000 after purchasing an additional 2,651,623 shares in the last quarter. California State Teachers Retirement System grew its holdings in shares of HP by 2,151.8% in the 2nd quarter. California State Teachers Retirement System now owns 35,563,906 shares of the computer maker’s stock worth $780,272,000 after purchasing an additional 33,984,527 shares during the last quarter. Finally, Geode Capital Management LLC increased its position in shares of HP by 1.0% during the 4th quarter. Geode Capital Management LLC now owns 27,313,924 shares of the computer maker’s stock worth $607,373,000 after purchasing an additional 274,033 shares in the last quarter. Institutional investors own 77.53% of the company’s stock.

HP Company Profile

HP Inc is an American multinational information technology company that designs, manufactures and sells personal computing devices, printers and related supplies and services. Its product portfolio spans consumer and commercial notebooks and desktops, workstations, displays and accessories, as well as an extensive line of printing hardware that includes home, office and production printers. HP also provides consumables such as ink and toner, managed print services, device deployment and lifecycle support, and software for device and print management.

Founded from the original Hewlett‑Packard Company, HP Inc became a separately traded public company in 2015 following a corporate split that created Hewlett Packard Enterprise to focus on enterprise hardware and services.