Home Depot (HD) AI Stock Analysis

• Market Cap: $374.44B
• Dividend Yield: 2.44%
• Average Volume (3M): 3.65M
• Price to Earnings (P/E): 25.5
• Beta (1Y): 0.85
• Revenue Growth: 7.33%
• EPS Growth: -1.19%
• Country: US
• Employees: 470,100
• Sector: Consumer Cyclical
• Sector Strength: 71
• Industry: Home Improvement
• EPS (TTM): 3.56
• Shares Outstanding: 994,928,000
• 10 Day Avg. Volume: 3,385,735
• 30 Day Avg. Volume: 3,648,924
• PEG Ratio: -20.49
• Price to Book (P/B): 45.40
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 23.84
• Enterprise Value/Market Cap: 1.13
• Enterprise Value/Revenue: 0.67
• Enterprise Value/Gross Profit: 7.77
• Enterprise Value/Ebitda: 4.18
• 1Y Price Target: $428.12
• Price Target Upside: 14.75% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 24

• Rating: 72 Outperform
• Price Target: $412.00 ▲(10.43%Upside)

Home Depot's strong financial performance and resilient U.S. sales are key strengths, despite high debt levels and valuation concerns. Mixed sentiment from the earnings call, along with moderate technical indicators, balance the overall score.

Positive Factors

Acquisition

The acquisition of GMS adds a new vertical adjacent to SRS’ existing business, expected to be complementary given customer overlap and similar capabilities in wholesale distribution.

Earnings

HD expects the acquisition to be accretive on an adjusted basis in the first full year.

Negative Factors

Margins

The acquisition is expected to be dilutive to Home Depot's margins, although slightly accretive to earnings per share.

Market Performance

Home Depot has underperformed the S&P 500 significantly, which is attributed to the lack of a turn in the US housing market and questions over its Complex Project strategy.

Home Depot Business Overview & Revenue Model

Company Description

The Home Depot, Inc. is a leading American home improvement retailer headquartered in Atlanta, Georgia. It specializes in selling tools, construction products, appliances, and services. The company operates in the retail sector, offering an extensive range of products for home improvement, including building materials, lawn and garden products, and home decor. Home Depot caters to a diverse customer base, including DIY enthusiasts, professional contractors, and commercial customers, providing them with the necessary products and expertise for home improvement projects.

How the Company Makes Money

Home Depot generates revenue primarily through the sale of a wide variety of home improvement products and services. Its key revenue streams include retail sales from its extensive network of brick-and-mortar stores and its growing e-commerce platform. The company benefits from economies of scale by leveraging its large supplier base and efficient distribution network. Additionally, Home Depot offers installation services for appliances and other products, which contribute to its revenue. It also engages in strategic partnerships with suppliers and service providers to enhance its product offerings and customer experience, thereby driving sales growth. The company's earnings are influenced by factors such as housing market trends, consumer spending on home improvement, and seasonal demand fluctuations.

Home Depot Financial Statement Overview

Summary

Home Depot shows strong profitability and revenue growth with an impressive Net Profit Margin of 8.98% and robust cash flow management. However, the high debt-to-equity ratio indicates significant leverage, which could pose risks if market conditions change.

Income Statement

Home Depot demonstrates robust financial health with strong profitability and consistent revenue growth. The Gross Profit Margin for TTM is 33.35%, and the Net Profit Margin is 8.98%, indicating efficient cost management. The Revenue Growth Rate from the previous annual report is 5.57%, showing steady expansion. EBIT and EBITDA margins are 13.24% and 15.65% respectively, reflecting strong core operational performance.

Balance Sheet

The balance sheet reveals a high debt-to-equity ratio due to significant leverage, with the TTM Debt-to-Equity Ratio at 2.89. Despite this, Return on Equity is impressively high at 184.00%, driven by strong net income relative to equity. The Equity Ratio is low at 8.02%, suggesting high reliance on debt financing, which could pose risks if market conditions change.

Cash Flow

Cash flow analysis highlights solid operational cash generation, with an Operating Cash Flow to Net Income Ratio of 1.27, indicating effective cash conversion from earnings. Free Cash Flow remained strong with a slight decline in growth rate due to increased capital expenditures. The Free Cash Flow to Net Income Ratio is 1.04, underscoring efficient capital management.

Breakdown	Mar 2025	Mar 2024	Mar 2023	Mar 2022	Mar 2021
Income Statement
Total Revenue	159.51B	152.67B	157.40B	151.16B	132.11B
Gross Profit	53.31B	50.96B	52.78B	50.83B	44.85B
EBITDA	25.43B	25.11B	27.07B	25.95B	20.84B
Net Income	14.81B	15.14B	17.11B	16.43B	12.87B
Balance Sheet
Total Assets	96.12B	76.53B	76.44B	71.88B	70.58B
Cash, Cash Equivalents and Short-Term Investments	1.66B	3.76B	2.76B	2.34B	7.89B
Total Debt	62.29B	52.24B	50.36B	46.27B	43.42B
Total Liabilities	89.48B	75.49B	74.88B	73.57B	67.28B
Stockholders Equity	6.64B	1.04B	1.56B	-1.70B	3.30B
Cash Flow
Free Cash Flow	16.32B	17.95B	11.50B	14.01B	16.38B
Operating Cash Flow	19.81B	21.17B	14.62B	16.57B	18.84B
Investing Cash Flow	-21.03B	-4.73B	-3.14B	-2.97B	-10.17B
Financing Cash Flow	-694.00M	-15.44B	-10.99B	-19.12B	-2.98B

Home Depot Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 373.09
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HD, the sentiment is Positive. The current price of 373.09 is above the 20-day moving average (MA) of 367.71, above the 50-day MA of 365.88, and below the 200-day MA of 381.18, indicating a neutral trend. The MACD of 1.53 indicates Negative momentum. The RSI at 57.77 is Neutral, neither overbought nor oversold. The STOCH value of 82.64 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for HD.

Home Depot Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
DG	77 Outperform	$24.04B	20.83	15.69%	2.19%	4.77%	-23.73%
TJX	75 Outperform	$140.97B	29.79	60.36%	1.23%	3.79%	5.23%
TSCO	73 Outperform	$31.61B	29.65	45.34%	1.52%	2.96%	-2.02%
HD	72 Outperform	$374.44B	25.53	299.52%	2.44%	7.33%	-1.19%
FND	67 Neutral	$8.47B	41.65	9.74%	―	2.96%	-9.49%
Sector *	63 Neutral	$17.10B	10.79	-8.01%	2.94%	1.62%	-25.73%
LOW	63 Neutral	$128.12B	18.94	-51.07%	2.06%	-2.52%	-2.98%

Home Depot Corporate Events

Home Depot’s 2025 Annual Shareholders Meeting Outcomes

The Home Depot, Inc. held its 2025 Annual Meeting of Shareholders on May 22, 2025, where several key decisions were made. The meeting resulted in the election of board members, the ratification of KPMG LLP as the independent auditor, and the approval of executive compensation. However, shareholder proposals regarding an independent chair of the Board, biodiversity impact assessment, and packaging policies for plastics were not approved.

The most recent analyst rating on (HD) stock is a Hold with a $340.00 price target. To see the full list of analyst forecasts on Home Depot stock, see the HD Stock Forecast page.

Home Depot Secures New $7 Billion Credit Facilities

On May 6, 2025, Home Depot terminated its $2.0 billion 364-day revolving credit facility with JPMorgan Chase Bank, which was initially established to support its commercial paper program and the acquisition of SRS Distribution, Inc. Simultaneously, the company entered into two new revolving credit facility agreements totaling $7.0 billion to support its commercial paper program and general corporate purposes, indicating a strategic shift in its financial management.