HOME DEPOT INC (HD) Fundamental Analysis & Valuation
NYSE:HD • US4370761029
Current stock price
323.88 USD
-4.92 (-1.5%)
At close:
323.68 USD
-0.2 (-0.06%)
After Hours:
This HD fundamental analysis includes valuation metrics, fair value assessment, financial health analysis, profitability trends, growth metrics and dividend sustainability analysis.
1. HD Profitability Analysis
1.1 Basic Checks
- HD had positive earnings in the past year.
- In the past year HD had a positive cash flow from operations.
- In the past 5 years HD has always been profitable.
- Each year in the past 5 years HD had a positive operating cash flow.
1.2 Ratios
- Looking at the Return On Assets, with a value of 13.47%, HD belongs to the top of the industry, outperforming 91.06% of the companies in the same industry.
- HD has a better Return On Equity (110.48%) than 99.19% of its industry peers.
- The Return On Invested Capital of HD (20.64%) is better than 89.43% of its industry peers.
- Measured over the past 3 years, the Average Return On Invested Capital for HD is significantly above the industry average of 13.24%.
- The 3 year average ROIC (25.05%) for HD is well above the current ROIC(20.64%). The reason for the recent decline needs to be investigated.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 13.47% | ||
| ROE | 110.48% | ||
| ROIC | 20.64% |
ROA(3y)16.22%
ROA(5y)18.78%
ROE(3y)594.65%
ROE(5y)N/A
ROIC(3y)25.05%
ROIC(5y)29.93%
1.3 Margins
- Looking at the Profit Margin, with a value of 8.60%, HD belongs to the top of the industry, outperforming 87.80% of the companies in the same industry.
- In the last couple of years the Profit Margin of HD has declined.
- Looking at the Operating Margin, with a value of 12.68%, HD belongs to the top of the industry, outperforming 90.24% of the companies in the same industry.
- In the last couple of years the Operating Margin of HD has declined.
- The Gross Margin of HD (33.32%) is comparable to the rest of the industry.
- In the last couple of years the Gross Margin of HD has remained more or less at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 12.68% | ||
| PM (TTM) | 8.6% | ||
| GM | 33.32% |
OM growth 3Y-6%
OM growth 5Y-3.74%
PM growth 3Y-7.52%
PM growth 5Y-2.47%
GM growth 3Y-0.21%
GM growth 5Y-0.38%
2. HD Health Analysis
2.1 Basic Checks
- With a Return on Invested Capital (ROIC) well above the Cost of Capital (WACC), HD is creating value.
- The number of shares outstanding for HD remains at a similar level compared to 1 year ago.
- Compared to 5 years ago, HD has less shares outstanding
- Compared to 1 year ago, HD has an improved debt to assets ratio.
2.2 Solvency
- The Debt to FCF ratio of HD is 4.41, which is a neutral value as it means it would take HD, 4.41 years of fcf income to pay off all of its debts.
- HD has a better Debt to FCF ratio (4.41) than 66.67% of its industry peers.
- A Debt/Equity ratio of 3.97 is on the high side and indicates that HD has dependencies on debt financing.
- Looking at the Debt to Equity ratio, with a value of 3.97, HD is doing worse than 77.24% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 3.97 | ||
| Debt/FCF | 4.41 | ||
| Altman-Z | N/A |
ROIC/WACC2.49
WACC8.3%
2.3 Liquidity
- A Current Ratio of 1.06 indicates that HD should not have too much problems paying its short term obligations.
- HD has a worse Current ratio (1.06) than 71.54% of its industry peers.
- A Quick Ratio of 0.26 indicates that HD may have some problems paying its short term obligations.
- HD's Quick ratio of 0.26 is on the low side compared to the rest of the industry. HD is outperformed by 82.11% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.06 | ||
| Quick Ratio | 0.26 |
3. HD Growth Analysis
3.1 Past
- HD shows a slight negative growth in Earnings Per Share. In the last year, the EPS has decreased by -1.47%.
- HD shows a small growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 4.26% yearly.
- Looking at the last year, HD shows a small growth in Revenue. The Revenue has grown by 3.24% in the last year.
- HD shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 4.51% yearly.
EPS 1Y (TTM)-1.47%
EPS 3Y-4.12%
EPS 5Y4.26%
EPS Q2Q%-9.93%
Revenue 1Y (TTM)3.24%
Revenue growth 3Y1.52%
Revenue growth 5Y4.51%
Sales Q2Q%-3.79%
3.2 Future
- The Earnings Per Share is expected to grow by 7.18% on average over the next years.
- Based on estimates for the next years, HD will show a small growth in Revenue. The Revenue will grow by 3.81% on average per year.
EPS Next Y5.56%
EPS Next 2Y6.91%
EPS Next 3Y7.65%
EPS Next 5Y7.18%
Revenue Next Year3.95%
Revenue Next 2Y4.02%
Revenue Next 3Y4.16%
Revenue Next 5Y3.81%
3.3 Evolution
- The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
- When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is stable.
4. HD Valuation Analysis
4.1 Price/Earnings Ratio
- The Price/Earnings ratio is 22.03, which indicates a rather expensive current valuation of HD.
- Compared to the rest of the industry, the Price/Earnings ratio of HD indicates a somewhat cheap valuation: HD is cheaper than 64.23% of the companies listed in the same industry.
- HD is valuated at similar levels of the S&P average when we compare the Price/Earnings ratio to 26.64, which is the current average of the S&P500 Index.
- HD is valuated rather expensively with a Price/Forward Earnings ratio of 20.87.
- HD's Price/Forward Earnings is on the same level as the industry average.
- When comparing the Price/Forward Earnings ratio of HD to the average of the S&P500 Index (21.36), we can say HD is valued inline with the index average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 22.03 | ||
| Fwd PE | 20.87 |
4.2 Price Multiples
- Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of HD is on the same level as its industry peers.
- HD's Price/Free Cash Flow ratio is in line with the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 25.51 | ||
| EV/EBITDA | 15.09 |
4.3 Compensation for Growth
- The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
- HD has an outstanding profitability rating, which may justify a higher PE ratio.
PEG (NY)3.96
PEG (5Y)5.17
EPS Next 2Y6.91%
EPS Next 3Y7.65%
5. HD Dividend Analysis
5.1 Amount
- HD has a Yearly Dividend Yield of 2.74%. Purely for dividend investing, there may be better candidates out there.
- Compared to an average industry Dividend Yield of 3.82, HD pays a better dividend. On top of this HD pays more dividend than 80.49% of the companies listed in the same industry.
- Compared to an average S&P500 Dividend Yield of 1.82, HD pays a better dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.74% |
5.2 History
- The dividend of HD is nicely growing with an annual growth rate of 8.96%!
- HD has been paying a dividend for at least 10 years, so it has a reliable track record.
- HD has not decreased its dividend for at least 10 years, so it has a reliable track record of non decreasing dividend.
Dividend Growth(5Y)8.96%
Div Incr Years16
Div Non Decr Years34
5.3 Sustainability
- HD pays out 64.65% of its income as dividend. This is not a sustainable payout ratio.
- HD's earnings are growing slower than its dividend. This means the dividend growth is not sustainable.
DP64.65%
EPS Next 2Y6.91%
EPS Next 3Y7.65%
HD Fundamentals: All Metrics, Ratios and Statistics
323.88
-4.92 (-1.5%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupConsumer Discretionary Distribution & Retail
GICS IndustrySpecialty Retail
Industry Strength16.15
Industry Growth14.91
Earnings (Last)02-24 2026-02-24/bmo
Earnings (Next)05-19 2026-05-19
Inst Owners74.36%
Inst Owner Change-0.23%
Ins Owners0.05%
Ins Owner Change1.6%
Market Cap322.59B
Revenue(TTM)164.68B
Net Income(TTM)14.16B
Analysts76.09
Price Target414.6 (28.01%)
Short Float %1.22%
Short Ratio3.09
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.74% |
Yearly Dividend9.2
Dividend Growth(5Y)8.96%
DP64.65%
Div Incr Years16
Div Non Decr Years34
Ex-Date03-12 2026-03-12 (2.33)
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)-0.72%
Min EPS beat(2)-5.4%
Max EPS beat(2)3.96%
EPS beat(4)1
Avg EPS beat(4)-2.22%
Min EPS beat(4)-5.4%
Max EPS beat(4)3.96%
EPS beat(8)1
Avg EPS beat(8)-2.03%
EPS beat(12)2
Avg EPS beat(12)-1.64%
EPS beat(16)3
Avg EPS beat(16)-0.92%
Revenue beat(2)0
Avg Revenue beat(2)-2.52%
Min Revenue beat(2)-2.71%
Max Revenue beat(2)-2.32%
Revenue beat(4)0
Avg Revenue beat(4)-2.42%
Min Revenue beat(4)-3.08%
Max Revenue beat(4)-1.56%
Revenue beat(8)0
Avg Revenue beat(8)-2.27%
Revenue beat(12)0
Avg Revenue beat(12)-2.51%
Revenue beat(16)1
Avg Revenue beat(16)-2.07%
PT rev (1m)1.72%
PT rev (3m)3.1%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-5.96%
EPS NY rev (1m)0%
EPS NY rev (3m)-0.1%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-0.31%
Revenue NY rev (1m)0%
Revenue NY rev (3m)-0.02%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 22.03 | ||
| Fwd PE | 20.87 | ||
| P/S | 1.96 | ||
| P/FCF | 25.51 | ||
| P/OCF | 19.76 | ||
| P/B | 25.18 | ||
| P/tB | N/A | ||
| EV/EBITDA | 15.09 |
EPS(TTM)14.7
EY4.54%
EPS(NY)15.52
Fwd EY4.79%
FCF(TTM)12.7
FCFY3.92%
OCF(TTM)16.39
OCFY5.06%
SpS165.34
BVpS12.86
TBVpS-19.94
PEG (NY)3.96
PEG (5Y)5.17
Graham Number65.2288 (-79.86%)
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 13.47% | ||
| ROE | 110.48% | ||
| ROCE | 28.75% | ||
| ROIC | 20.64% | ||
| ROICexc | 21.01% | ||
| ROICexgc | 36.96% | ||
| OM | 12.68% | ||
| PM (TTM) | 8.6% | ||
| GM | 33.32% | ||
| FCFM | 7.68% |
ROA(3y)16.22%
ROA(5y)18.78%
ROE(3y)594.65%
ROE(5y)N/A
ROIC(3y)25.05%
ROIC(5y)29.93%
ROICexc(3y)26.13%
ROICexc(5y)31.4%
ROICexgc(3y)41.07%
ROICexgc(5y)45.33%
ROCE(3y)33.48%
ROCE(5y)39.89%
ROICexgc growth 3Y-7.04%
ROICexgc growth 5Y-4.98%
ROICexc growth 3Y-16.59%
ROICexc growth 5Y-11.68%
OM growth 3Y-6%
OM growth 5Y-3.74%
PM growth 3Y-7.52%
PM growth 5Y-2.47%
GM growth 3Y-0.21%
GM growth 5Y-0.38%
F-Score4
Asset Turnover1.57
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 3.97 | ||
| Debt/FCF | 4.41 | ||
| Debt/EBITDA | 2.03 | ||
| Cap/Depr | 89.27% | ||
| Cap/Sales | 2.23% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 65.27% | ||
| Profit Quality | 89.33% | ||
| Current Ratio | 1.06 | ||
| Quick Ratio | 0.26 | ||
| Altman-Z | N/A |
F-Score4
WACC8.3%
ROIC/WACC2.49
Cap/Depr(3y)93.76%
Cap/Depr(5y)95.16%
Cap/Sales(3y)2.18%
Cap/Sales(5y)2.04%
Profit Quality(3y)106.03%
Profit Quality(5y)94.11%
High Growth Momentum
Growth
EPS 1Y (TTM)-1.47%
EPS 3Y-4.12%
EPS 5Y4.26%
EPS Q2Q%-9.93%
EPS Next Y5.56%
EPS Next 2Y6.91%
EPS Next 3Y7.65%
EPS Next 5Y7.18%
Revenue 1Y (TTM)3.24%
Revenue growth 3Y1.52%
Revenue growth 5Y4.51%
Sales Q2Q%-3.79%
Revenue Next Year3.95%
Revenue Next 2Y4.02%
Revenue Next 3Y4.16%
Revenue Next 5Y3.81%
EBIT growth 1Y-2.95%
EBIT growth 3Y-4.57%
EBIT growth 5Y0.6%
EBIT Next Year19.55%
EBIT Next 3Y10.54%
EBIT Next 5Y7.64%
FCF growth 1Y-22.54%
FCF growth 3Y3.23%
FCF growth 5Y-5.04%
OCF growth 1Y-17.59%
OCF growth 3Y3.76%
OCF growth 5Y-2.82%
HOME DEPOT INC / HD Fundamental Analysis FAQ
What is the ChartMill fundamental rating of HOME DEPOT INC (HD) stock?
ChartMill assigns a fundamental rating of 5 / 10 to HD.
Can you provide the valuation status for HOME DEPOT INC?
ChartMill assigns a valuation rating of 3 / 10 to HOME DEPOT INC (HD). This can be considered as Overvalued.
Can you provide the profitability details for HOME DEPOT INC?
HOME DEPOT INC (HD) has a profitability rating of 8 / 10.
What is the financial health of HOME DEPOT INC (HD) stock?
The financial health rating of HOME DEPOT INC (HD) is 3 / 10.
Is the dividend of HOME DEPOT INC sustainable?
The dividend rating of HOME DEPOT INC (HD) is 7 / 10 and the dividend payout ratio is 64.65%.