Investopedia: HP Has A Major Challenge Building From This Quarter

Long-suffering Hewlett-Packard (NYSE:HPQ) investors needed some good news, and they got it in the fiscal second quarter. While HP's revenue and margin performance was better than expected, as was management's updated guidance, there are still some substantial challenges ahead. Years of underinvestment in R&D have taken their toll and showy moves like mass-firings don't change some of the most pressing problems.

While even very modest growth assumptions suggest HP shares are undervalued, investors shouldn't underestimate the company's challenges. Becoming a leader again in the teeth of competition from companies like IBM (NYSE:IBM), EMC (NYSE:EMC) and Apple (Nasdaq:AAPL) isn't going to be easy, and the Street is seldom enthusiastic about tech stocks that can't post strong revenue growth.

Please click here for the full article:
http://stocks.investopedia.com/stock-analysis/2012/HP-Has-A-Major-Challenge-Building-From-This-Quarter-HPQ-IBM-DELL-EMC-AAPL0525.aspx