HPQ Stock Analysis: Security Upgrades Dettering Cyber Attacks

This article was written by Blair Goldenberg, a Financial Analyst at I Know First, and enrolled in a Masters of Finance at Colorado State University.

HPQ Stock Analysis


  • Background on Hewlett-Packard (HPQ)
  • HPQ Stock Analysis
  • New Security Threats Prompt Bolstering of Printer Security
  • Analyst Recommendation
  • Bullish I Know First Forecast on HP

Background on Hewlett-Packard (HPQ)

HPQ Stock AnalysisHP Inc. provides products, technologies, software, solutions and services to individual consumers, small and medium-sized businesses and large enterprises, including customers in the government, health and education sectors. It operates through following business segments: Personal Systems, Printing, and Corporate Investments. The Personal Systems segment provides commercial personal computers, consumer PCs, workstations, calculators and other related accessories, software and services for the commercial and consumer markets. The Printing segment provides consumer and commercial printer hardware, supplies, media and scanning devices. Printing is also focused on imaging solutions in the commercial markets. The Corporate Investments segment includes HP Labs, the webOS business and certain business incubation projects. The company was founded by William R. Hewlett and David Packard in January 1939 and is headquartered in Palo Alto, CA.

HPQ Stock Analysis


Retrieved from Wall Street Journal

HP released their full year earnings for 2016 and their Q4 earnings on November 22. Their quarterly earnings met analysts predictions and their revenue exceeded expectations. Their year-over-year revenue grew 2% because of their PC sales. The company showed a loss of 8.2% in their printing revenue. Though they did go up on PC sales rebound, the decline in their printing disappointed investors which made the share price decline 7%. This may be an indication that printing will not be at the forefront of the companies product line. HP computers are possibly going to steal the spotlight and drive the company forward. Investors are bullish on HP after the release of their earnings, believing that the company will continue growing with the computer sales. HP is one of the cheapest tech stocks on the market, currently trading at $15.61 per share with competitor Canon (CAJ) trading at $29.62 per share.

New Security Threats Prompt Bolstering of Printer Security

HP recently announced that they plan on enhancing security for their printing products as well as enhancements in services. As stated above, the company has seen a drop in sales on their printing products and CEO Dion Weisler stated that the company will begin expanding into emerging markets. He also stated that the company plans on expanding their service and accessory businesses.

Security enhancements on printers are specifically used to protect companies from any cyber attacks. Due to growing technological advances, cyber attacks are increasing. Even with increased firewall security, attacks can still overcome them. Basically anything on a network can be a target for a cyber attack, which includes printers. The Internet of Things (IoT), which is “a system of interrelated computing devices, mechanical and digital machines, objects, animals or people that are provided with unique identifiers and the ability to transfer data over a network without requiring human-to-human or human-to-computer interaction,” making it a huge target for cyber attacks (Retrieved from Tech Target).

HP’s older security software has been deemed unsafe by the United States National Institute of Standards and has prompted the company to begin shutting down the interface on old devices. They have released an update called FutureSmart in November which has improved encryption on their printers. Meanwhile, on the service side, HP has enhanced and expanded operations with security advisors, security technicians and remote security management.

The redesigned security that HP has been working on for their printers will now include “advanced security professional services, software solutions and expanded core delivery capabilities for customers’ multi-vendor print fleets” (retrieved from IT-Online). HP’s added service allows companies to essentially outsource their security problems rather than wasting time and money on IT fixes.

A full itemized list of impressive new features include:

  • Print Security Implementation Service – HP will provide its own specialized security support technicians to implement corporate print security plans.
  • Print Security Advisory Retainer Service – HP’s credentialed security advisors will deliver ongoing security expertise, risk profile updates and support to evaluate security plans on a regular basis and provide ad hoc support for compliance audits.
  • Print Security Governance and Compliance – HP will help meet compliance via new remote management of security settings as well as monitor the print fleet for potential issues and supply proof of compliance reporting on fleet security status.
  • Increased Training – HP has invested to raise the level of security expertise with MPS employees and HP technical teams with industry security certifications such as CompTIA.
  • Enhanced Reporting and Reviews – HP is embedding security into MPS tracking and reporting processes for greater visibility to the print fleet status and to review security best practice recommendations.
  • New Remote Management Tools and Services – HP’s new tools within HP MPS software automate security actions such as firmware updates and password management so companies can outsource tedious IT security actions as part of the MPS contract. HP is raising the bar for business printing by announcing that the company has started to ship printers with less-secure interfaces closed, requiring customers to open the ports and protocols if they are needed when deploying new printers on their network. The company has started the process of closing older, less-maintained interfaces including ports, protocols and cipher suites as identified by NIST as less-secure including FTP and Telnet. With HP’s November FutureSmart firmware update, it has improved admin password and encryption settings for both new and existing HP Enterprise printers and MFPs.
    Meanwhile, HP is actively working with software developers to modify their applications to utilize newer, stronger interfaces in order to close additional interfaces in the near future.
    HP JetAdvantage workflow and printing solutions have been developed to streamline crucial business processes and tasks for enterprise customers – leading to reduced IT workload and costs, improved employee productivity and enabling users to print securely.

The latest security enhancements include:

  • HP Access Control–HP Access Control provides authentication, authorization, and secure pull printing capabilities, now with improved functionality and support for SNMPv3, a new card reader expands card type compatibility, and the ability for users to login and logout with a simple swipe of a proximity card or smart card.
  • HP Capture and Route–HP Capture and Route makes it easy to control and track scanned content and distribute documents with the touch of a button. New features include support for LDAP over SSL, data at rest encryption for scanned data stored on the Capture and Route server, and MyMessages, allowing for immediate printing of user messages and faxes while standing at the MFP.

Retrieved from IT-Online

Analyst Recommendation


Bullish I Know First Forecast on HP

I Know First currently maintains a bullish stance on HPQ with signal strength 183.85 and predictability 0.77 for 1 year forecast.


I Know First Algorithm Heatmap Explanation

The sign of the signal tells in which direction the asset price is expected to go (positive = to go up = Long, negative = to drop = Short position), the signal strength is related to the magnitude of the expected return and is used for ranking purposes of the investment opportunities.

Predictability is the actual fitness function being optimized every day, and can be simplified explained as the correlation based quality measure of the signal. This is a unique indicator of the I Know First algorithm, allowing the user to separate and focus on the most predictable assets according to the algorithm. Ranging between -1 and 1, one should focus on predictability levels significantly above 0 in order to fill confident about/trust the signal.


HP’s new security enhancements will ultimately prove lucrative, however; I believe their strongest product will be their PC’s as their sales are going up consistently. Additionally, my bullish outlook on Hewlett Packard is in accordance with I Know First’s forecast on HPQ