Hewlett-Packard (NYSE:HPQ) has had a good ride over the past year, and judging by its stock price performance, doesn't seem like a stock to stay away from. To its credit, the stock is up approximately 40% in just the past year, not including dividends, which handily beats the S&P 500 Index over this time. And yet, the company's fundamentals haven't kept up with its stellar stock price rally. HP's underlying business is showing little to justify such fantastic performance. The company's revenue and profits are stagnating, due to the fact that HP is still closely tied to hardware products like printers, which are not growing anymore.

That's why HP stock does not seem to be as compelling of a value opportunity as it seems, and why it's a stock I'll continue to avoid.

Not all "old tech" stocks are the same
The group of technology companies known as "old tech" are the ones that grew to prominence during the birth and boom of the personal computer. This includes Hewlett-Packard and other companies like International Business Machines (NYSE:IBM). IBM rose to power because of its leadership position in computers and other technology hardware, similar to the position HP is in today. IBM is arguably in better standing because it is much further along in its transition to the cloud and other areas outside of hardware.

For example, IBM is making real progress in products like software-as-a-service, where revenue soared 50% last quarter. IBM's WebSphere brand, application server grew revenue by 7% last quarter. For HP's part, management stresses advancements in its major cloud initiative, HP Helion, but the results haven't shown up in the financial statements yet. And management refers to Helion in vague terms in the conference calls with analysts, without offering much in the way of supporting statistics.

HP's results continue to be driven by old, out-of-date products like printers, which have a very questionable future in the electronic age. Printers still comprise 20% of HP's revenue, which is holding it back from progressing. Printing revenue declined 3% over the first nine months, versus the same period last year.

HP has all the making of a classic value trap
On the surface, HP might look like an ideal value stock. The stock trades for 13 times trailing earnings and 9 times forward EPS estimates. In addition, the stock pays a dividend. These traits might make the stock attractive from a value perspective, but there's a very good reason why the stock is so cheap: It's not growing. HP's total revenue is down over the first nine months of 2014, compared to the same period last year. Earnings per share are up 2% during this time frame, which is hardly anything to brag about. And, it's worth noting that the company only managed that much growth because it is aggressively laying off employees, cutting costs, and buying back its own stock to boost profits.

For example, as part of its planned split, HP will lay off another 5,000 employees. This brings the total number of job cuts under Chief Executive Officer Meg Whitman to 55,000. This helps boost profits as does HP's practice of spending billions of dollars on buying back its own shares. HP spent $1.9 billion on share buybacks over the first nine months of the year. This has helped reduce the company's share count by nearly 4 million shares.

While these measures have served to keep HP's profits from falling this year, job cuts and share buybacks aren't a long-term solution to what's ailing the company. Top-line growth needs to resume for the company's turnaround to be convincing.

For income investors, there are far better choices in the technology sector to choose from. Dividend-paying technology giants like Microsoft and Intel both offer 2.6% yields, so if income is what you're after, look elsewhere in the tech space.

The Foolish takeaway
HP's stock price has rallied tremendously over the past year, but all the while its fundamentals continue to lag. HP looks like a cheap stock based on valuation multiples, but most of its earnings growth has come from cost cuts and share buybacks. HP's revenue is not growing, and that's what the company's long-term future is dependent upon.

Making matters more complicated is that HP doesn't have a plan for breaking away from hardware, which the company needs to do to make its stock rally more legitimate. Until that happens, I'm content to avoid buying shares of HP.

Bob Ciura has no position in any stocks mentioned. The Motley Fool recommends Intel. The Motley Fool owns shares of Intel, International Business Machines, and Microsoft. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.