HP Inc.HPQ is bolstering its competitive position in the photo printing market through continued innovation. The company recently upgraded its HP Sprocket 2nd Edition, a pocket-sized portable photo printer.
The company had launched the Sprocket in 2016 aiming to tap the pocket printing space. The upgraded edition will enable multiple users to snap pictures on their mobile devices and immediately connect to the Sprocket and queue up their photos which they wish to print. In this edition, the print quality has also been enhanced.
Efforts in Printing Drive Growth
HP has been focusing on its profit-generating Printing Business for some time now. The segment's revenues constituted 35.6% of total revenues in the last reported quarter, up 11% year over year. Recently, HP announced that it expects at least 16% operating margin for the printing segment for fiscal 2019.
HP Inc. Revenue (TTM)
HP Inc. Revenue (TTM) | HP Inc. Quote
To give further boost to its Printing business, HP is increasing investments in A3 multifunction printers. Per management, the A3 business held a market share of 9.1% in the previous quarter. Although the growth rate is not expected to be the same every quarter, management believes that it is on track to achieve 12% market share by 2020.
Additionally, HP expects its upcoming acquisition of Europe's largest independent provider of print and document services, Apogee Corporation, to drive growth in contractual office print market.
It recently launched the new DesignJet Z large format photo printers, which is expected to be adopted widely and, in turn, boost revenues.
HP also announced upgrades across its Indigo Digital Press portfolio, and unveiled the HP SmartStream Collage - an automated variable design feature for HP Indigo printing - aimed to benefit converters.
The acquisition of Samsung Electronics' printer business (S-Print), completed last year, is believed to be a strategic move by HP to turn around the printer business. The S-Print business has more than 6,500 printing patents, which will help HP expand in the domain. All these will support development and manufacturing of HP printers, going forward.
Moreover, it will help the company gain market share from its Japanese rivals - Canon CAJ and Epson SEKEY - and control prices. Apart from this, the acquisition will also give HP access to Samsung's partners and strengthen its position across various geographies.
Notably, in the second quarter of 2018, the Indian printing market was dominated by HP, which sold 391,940 units and enjoyed 47% share.
The company recently added that the Printing segment is likely to outgrow the markets and gain significant share going forward.
Notably, per MarketsandMarkets, the global digital printing market is expected to reach $28.9 billion by 2023, at a CAGR of 4.48% between 2017 and 2023, driven mainly by growing demand for sustainable printing, development of packaging and textile industries, and reduction in per unit cost of printing with digital printers.
Zacks Rank & Another Key Pick
HP currently carries a Zacks Rank #2 (Buy).
Another top-ranked stock in the broader Computer and Technology industry is 3D Systems Corporation DDD , sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today's Zacks #1 Rank stocks here .
Long-term earnings growth for 3D Systems is pegged at 23%.
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