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HOME DEPOT INC (HD) Stock Fundamental Analysis

NYSE:HD - New York Stock Exchange, Inc. - US4370761029 - Common Stock - Currency: USD

371.68  -0.17 (-0.05%)

After market: 371.68 0 (0%)

Fundamental Rating

5

We assign a fundamental rating of 5 out of 10 to HD. HD was compared to 121 industry peers in the Specialty Retail industry. While HD belongs to the best of the industry regarding profitability, there are some minor concerns on its financial health. HD has a valuation in line with the averages, but on the other hand it scores bad on growth.


Dividend Valuation Growth Profitability Health

8

1. Profitability

1.1 Basic Checks

In the past year HD was profitable.
In the past year HD had a positive cash flow from operations.
Each year in the past 5 years HD has been profitable.
HD had a positive operating cash flow in each of the past 5 years.
HD Yearly Net Income VS EBIT VS OCF VS FCFHD Yearly Net Income VS EBIT VS OCF VS FCFYearly Net Income VS EBIT VS OCF VS FCF 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 5B 10B 15B 20B

1.2 Ratios

Looking at the Return On Assets, with a value of 14.76%, HD belongs to the top of the industry, outperforming 89.26% of the companies in the same industry.
HD has a Return On Equity of 184.02%. This is amongst the best in the industry. HD outperforms 100.00% of its industry peers.
HD's Return On Invested Capital of 24.31% is amongst the best of the industry. HD outperforms 90.91% of its industry peers.
The Average Return On Invested Capital over the past 3 years for HD is significantly above the industry average of 13.07%.
The last Return On Invested Capital (24.31%) for HD is well below the 3 year average (29.60%), which needs to be investigated, but indicates that HD had better years and this may not be a problem.
Industry RankSector Rank
ROA 14.76%
ROE 184.02%
ROIC 24.31%
ROA(3y)19.19%
ROA(5y)19.73%
ROE(3y)922.84%
ROE(5y)N/A
ROIC(3y)29.6%
ROIC(5y)32.3%
HD Yearly ROA, ROE, ROICHD Yearly ROA, ROE, ROICYearly ROA, ROE, ROIC 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 0 500 -500 1K

1.3 Margins

With an excellent Profit Margin value of 8.98%, HD belongs to the best of the industry, outperforming 87.60% of the companies in the same industry.
HD's Profit Margin has declined in the last couple of years.
HD has a better Operating Margin (13.24%) than 90.08% of its industry peers.
HD's Operating Margin has been stable in the last couple of years.
HD has a Gross Margin of 33.34%. This is comparable to the rest of the industry: HD outperforms 40.50% of its industry peers.
In the last couple of years the Gross Margin of HD has remained more or less at the same level.
Industry RankSector Rank
OM 13.24%
PM (TTM) 8.98%
GM 33.34%
OM growth 3Y-4.34%
OM growth 5Y-1.25%
PM growth 3Y-5.13%
PM growth 5Y-1.87%
GM growth 3Y-0.21%
GM growth 5Y-0.39%
HD Yearly Profit, Operating, Gross MarginsHD Yearly Profit, Operating, Gross MarginsYearly Profit, Operating, Gross Margins 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 10 20 30

5

2. Health

2.1 Basic Checks

With a Return on Invested Capital (ROIC) well above the Cost of Capital (WACC), HD is creating value.
HD has about the same amout of shares outstanding than it did 1 year ago.
The number of shares outstanding for HD has been reduced compared to 5 years ago.
HD has a better debt/assets ratio than last year.
HD Yearly Shares OutstandingHD Yearly Shares OutstandingYearly Shares Outstanding 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 200M 400M 600M 800M 1B
HD Yearly Total Debt VS Total AssetsHD Yearly Total Debt VS Total AssetsYearly Total Debt VS Total Assets 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 20B 40B 60B 80B

2.2 Solvency

An Altman-Z score of 6.11 indicates that HD is not in any danger for bankruptcy at the moment.
HD has a better Altman-Z score (6.11) than 91.74% of its industry peers.
HD has a debt to FCF ratio of 3.44. This is a good value and a sign of high solvency as HD would need 3.44 years to pay back of all of its debts.
HD has a Debt to FCF ratio of 3.44. This is in the better half of the industry: HD outperforms 72.73% of its industry peers.
HD has a Debt/Equity ratio of 5.96. This is a high value indicating a heavy dependency on external financing.
HD has a Debt to Equity ratio of 5.96. This is amonst the worse of the industry: HD underperforms 80.17% of its industry peers.
Industry RankSector Rank
Debt/Equity 5.96
Debt/FCF 3.44
Altman-Z 6.11
ROIC/WACC2.62
WACC9.28%
HD Yearly LT Debt VS Equity VS FCFHD Yearly LT Debt VS Equity VS FCFYearly LT Debt VS Equity VS FCF 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 0 10B 20B 30B 40B

2.3 Liquidity

HD has a Current Ratio of 1.09. This is a normal value and indicates that HD is financially healthy and should not expect problems in meeting its short term obligations.
The Current ratio of HD (1.09) is worse than 67.77% of its industry peers.
HD has a Quick Ratio of 1.09. This is a bad value and indicates that HD is not financially healthy enough and could expect problems in meeting its short term obligations.
HD has a worse Quick ratio (0.28) than 76.86% of its industry peers.
Industry RankSector Rank
Current Ratio 1.09
Quick Ratio 0.28
HD Yearly Current Assets VS Current LiabilitesHD Yearly Current Assets VS Current LiabilitesYearly Current Assets VS Current Liabilites 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 10B 20B 30B

3

3. Growth

3.1 Past

The earnings per share for HD have decreased by -0.40% in the last year.
Measured over the past 5 years, HD shows a small growth in Earnings Per Share. The EPS has been growing by 7.80% on average per year.
The Revenue has been growing slightly by 7.33% in the past year.
The Revenue has been growing slightly by 7.67% on average over the past years.
EPS 1Y (TTM)-0.4%
EPS 3Y-1.31%
EPS 5Y7.8%
EPS Q2Q%-1.93%
Revenue 1Y (TTM)7.33%
Revenue growth 3Y1.81%
Revenue growth 5Y7.67%
Sales Q2Q%9.44%

3.2 Future

HD is expected to show a small growth in Earnings Per Share. In the coming years, the EPS will grow by 6.66% yearly.
The Revenue is expected to grow by 3.93% on average over the next years.
EPS Next Y3.66%
EPS Next 2Y6.15%
EPS Next 3Y6.85%
EPS Next 5Y6.66%
Revenue Next Year3.51%
Revenue Next 2Y3.83%
Revenue Next 3Y3.94%
Revenue Next 5Y3.93%

3.3 Evolution

The EPS growth rate is stable: in the next years the growth will be about the same 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 decreasing.
HD Yearly Revenue VS EstimatesHD Yearly Revenue VS EstimatesYearly Revenue VS Estimates 2014 2016 2018 2020 2022 2024 2026 2028 2030 2032 50B 100B 150B 200B
HD Yearly EPS VS EstimatesHD Yearly EPS VS EstimatesYearly EPS VS Estimates 2014 2016 2018 2020 2022 2024 2026 2028 2030 2032 5 10 15 20

4

4. Valuation

4.1 Price/Earnings Ratio

HD is valuated quite expensively with a Price/Earnings ratio of 25.03.
Based on the Price/Earnings ratio, HD is valued a bit cheaper than 61.16% of the companies in the same industry.
The average S&P500 Price/Earnings ratio is at 27.45. HD is around the same levels.
Based on the Price/Forward Earnings ratio of 22.11, the valuation of HD can be described as rather expensive.
The rest of the industry has a similar Price/Forward Earnings ratio as HD.
HD is valuated at similar levels of the S&P average when we compare the Price/Forward Earnings ratio to 21.90, which is the current average of the S&P500 Index.
Industry RankSector Rank
PE 25.03
Fwd PE 22.11
HD Price Earnings VS Forward Price EarningsHD Price Earnings VS Forward Price Earnings ChartPrice Earnings - Forward Price Earnings PE FPE 10 20 30 40 50

4.2 Price Multiples

HD's Enterprise Value to EBITDA is on the same level as the industry average.
Based on the Price/Free Cash Flow ratio, HD is valued a bit cheaper than 66.94% of the companies in the same industry.
Industry RankSector Rank
P/FCF 24.31
EV/EBITDA 16.49
HD Per share dataHD EPS, Sales, OCF, FCF, BookValue per sharePer Share Data Per Share 0 50 100 150

4.3 Compensation for Growth

The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates HD does not grow enough to justify the current Price/Earnings ratio.
HD has an outstanding profitability rating, which may justify a higher PE ratio.
PEG (NY)6.84
PEG (5Y)3.21
EPS Next 2Y6.15%
EPS Next 3Y6.85%

6

5. Dividend

5.1 Amount

HD has a Yearly Dividend Yield of 2.53%.
HD's Dividend Yield is rather good when compared to the industry average which is at 5.27. HD pays more dividend than 85.12% of the companies in the same industry.
HD's Dividend Yield is comparable with the S&P500 average which is at 2.42.
Industry RankSector Rank
Dividend Yield 2.53%

5.2 History

The dividend of HD is nicely growing with an annual growth rate of 10.50%!
HD has been paying a dividend for at least 10 years, so it has a reliable track record.
HD has not decreased their dividend for at least 10 years, which is a reliable track record.
Dividend Growth(5Y)10.5%
Div Incr Years15
Div Non Decr Years34
HD Yearly Dividends per shareHD Yearly Dividends per shareYearly Dividends per share 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2 4 6 8

5.3 Sustainability

HD pays out 61.38% of its income as dividend. This is not a sustainable payout ratio.
The dividend of HD is growing, but the earnings are growing slower. This means the dividend growth is not sustainable.
DP61.38%
EPS Next 2Y6.15%
EPS Next 3Y6.85%
HD Yearly Income VS Free CF VS DividendHD Yearly Income VS Free CF VS DividendYearly Income VS Free CF VS Dividend 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 5B 10B 15B
HD Dividend Payout.HD Dividend Payout, showing the Payout Ratio.HD Dividend Payout.PayoutRetained Earnings

HOME DEPOT INC

NYSE:HD (7/3/2025, 7:33:25 PM)

After market: 371.68 0 (0%)

371.68

-0.17 (-0.05%)

Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupConsumer Discretionary Distribution & Retail
GICS IndustrySpecialty Retail
Earnings (Last)05-20 2025-05-20/bmo
Earnings (Next)08-19 2025-08-19/bmo
Inst Owners74.51%
Inst Owner Change3.99%
Ins Owners0.04%
Ins Owner Change1.06%
Market Cap369.42B
Analysts78.8
Price Target423.84 (14.03%)
Short Float %0.88%
Short Ratio2.58
Dividend
Industry RankSector Rank
Dividend Yield 2.53%
Yearly Dividend8.99
Dividend Growth(5Y)10.5%
DP61.38%
Div Incr Years15
Div Non Decr Years34
Ex-Date06-05 2025-06-05 (2.3)
Surprises & Revisions
EPS beat(2)0
Avg EPS beat(2)-3.21%
Min EPS beat(2)-3.87%
Max EPS beat(2)-2.55%
EPS beat(4)0
Avg EPS beat(4)-2.29%
Min EPS beat(4)-3.87%
Max EPS beat(4)-0.62%
EPS beat(8)1
Avg EPS beat(8)-1.55%
EPS beat(12)1
Avg EPS beat(12)-1.48%
EPS beat(16)3
Avg EPS beat(16)-0.05%
Revenue beat(2)0
Avg Revenue beat(2)-1.56%
Min Revenue beat(2)-1.56%
Max Revenue beat(2)-1.55%
Revenue beat(4)0
Avg Revenue beat(4)-1.62%
Min Revenue beat(4)-2.66%
Max Revenue beat(4)-0.7%
Revenue beat(8)0
Avg Revenue beat(8)-2.06%
Revenue beat(12)0
Avg Revenue beat(12)-2.32%
Revenue beat(16)2
Avg Revenue beat(16)-1.6%
PT rev (1m)-1.7%
PT rev (3m)-4.22%
EPS NQ rev (1m)0.1%
EPS NQ rev (3m)0.12%
EPS NY rev (1m)0.19%
EPS NY rev (3m)-3.52%
Revenue NQ rev (1m)-0.01%
Revenue NQ rev (3m)0.04%
Revenue NY rev (1m)0.18%
Revenue NY rev (3m)0.08%
Valuation
Industry RankSector Rank
PE 25.03
Fwd PE 22.11
P/S 2.27
P/FCF 24.31
P/OCF 19.82
P/B 46.44
P/tB N/A
EV/EBITDA 16.49
EPS(TTM)14.85
EY4%
EPS(NY)16.81
Fwd EY4.52%
FCF(TTM)15.29
FCFY4.11%
OCF(TTM)18.75
OCFY5.05%
SpS163.95
BVpS8
TBVpS-20.63
PEG (NY)6.84
PEG (5Y)3.21
Profitability
Industry RankSector Rank
ROA 14.76%
ROE 184.02%
ROCE 31.94%
ROIC 24.31%
ROICexc 24.81%
ROICexgc 43.5%
OM 13.24%
PM (TTM) 8.98%
GM 33.34%
FCFM 9.32%
ROA(3y)19.19%
ROA(5y)19.73%
ROE(3y)922.84%
ROE(5y)N/A
ROIC(3y)29.6%
ROIC(5y)32.3%
ROICexc(3y)31.18%
ROICexc(5y)34.99%
ROICexgc(3y)44.07%
ROICexgc(5y)47.45%
ROCE(3y)38.92%
ROCE(5y)42.7%
ROICexcg growth 3Y-8.8%
ROICexcg growth 5Y1.22%
ROICexc growth 3Y-16.36%
ROICexc growth 5Y-8.21%
OM growth 3Y-4.34%
OM growth 5Y-1.25%
PM growth 3Y-5.13%
PM growth 5Y-1.87%
GM growth 3Y-0.21%
GM growth 5Y-0.39%
F-Score4
Asset Turnover1.64
Health
Industry RankSector Rank
Debt/Equity 5.96
Debt/FCF 3.44
Debt/EBITDA 1.86
Cap/Depr 87.9%
Cap/Sales 2.11%
Interest Coverage 250
Cash Conversion 73.1%
Profit Quality 103.79%
Current Ratio 1.09
Quick Ratio 0.28
Altman-Z 6.11
F-Score4
WACC9.28%
ROIC/WACC2.62
Cap/Depr(3y)98.95%
Cap/Depr(5y)96.86%
Cap/Sales(3y)2.09%
Cap/Sales(5y)1.97%
Profit Quality(3y)98.66%
Profit Quality(5y)101.7%
High Growth Momentum
Growth
EPS 1Y (TTM)-0.4%
EPS 3Y-1.31%
EPS 5Y7.8%
EPS Q2Q%-1.93%
EPS Next Y3.66%
EPS Next 2Y6.15%
EPS Next 3Y6.85%
EPS Next 5Y6.66%
Revenue 1Y (TTM)7.33%
Revenue growth 3Y1.81%
Revenue growth 5Y7.67%
Sales Q2Q%9.44%
Revenue Next Year3.51%
Revenue Next 2Y3.83%
Revenue Next 3Y3.94%
Revenue Next 5Y3.93%
EBIT growth 1Y1.71%
EBIT growth 3Y-2.61%
EBIT growth 5Y6.32%
EBIT Next Year16.25%
EBIT Next 3Y9.45%
EBIT Next 5Y6.28%
FCF growth 1Y15.81%
FCF growth 3Y5.24%
FCF growth 5Y8.2%
OCF growth 1Y13.37%
OCF growth 3Y6.13%
OCF growth 5Y7.68%