Home Depot (HD) AI Stock Analysis

• Market Cap: $343.45B
• Dividend Yield: 2.67%
• Average Volume (3M): 5.02M
• Price to Earnings (P/E): 23.5
• Beta (1Y): 0.80
• Revenue Growth: 7.50%
• EPS Growth: -0.38%
• Country: US
• Employees: 470,100
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Home Improvement
• EPS (TTM): 3.74
• Shares Outstanding: 995,511,500
• 10 Day Avg. Volume: 5,851,429
• 30 Day Avg. Volume: 5,022,318
• PEG Ratio: -20.88
• Price to Book (P/B): 61.42
• Price to Sales (P/S): 2.56
• P/FCF Ratio: 24.98
• Enterprise Value/Market Cap: 1.29
• Enterprise Value/Revenue: 2.66
• Enterprise Value/Gross Profit: 7.96
• Enterprise Value/Ebitda: 17.60
• 1Y Price Target: $401.85
• Price Target Upside: 16.48% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 23
• EPS Forecast (FY): 14.5
• Revenue Forecast (FY): $164.67B

• Rating: 66 Neutral
• Price Target: $387.00 ▲(12.17% Upside)

Home Depot's overall stock score reflects a combination of solid financial performance and moderate valuation, tempered by bearish technical indicators and mixed earnings call sentiment. The company's strong market position and strategic initiatives are positive, but high leverage and current market conditions pose risks. Investors should be cautious of technical weakness and monitor financial leverage closely.

Positive Factors

Revenue Growth

Home Depot's revenue growth indicates strong market demand and effective sales strategies, supporting long-term business expansion.

Digital Sales Growth

The significant growth in digital sales underscores Home Depot's successful omnichannel strategy, enhancing customer reach and convenience.

Pro Ecosystem Focus

Home Depot's emphasis on the Pro ecosystem strengthens its position with professional contractors, fostering loyalty and recurring revenue.

Negative Factors

High Leverage

High leverage can limit financial flexibility and increase risk, especially in volatile market conditions, impacting long-term sustainability.

Earnings Per Share Decline

The decline in earnings per share suggests pressure on profitability, which could affect investor confidence and future growth investments.

Inventory Concerns

Rising inventory levels may indicate slower sales or overstocking, potentially leading to increased holding costs and reduced cash flow.

Home Depot Business Overview & Revenue Model

Company Description

The Home Depot, Inc. operates as a home improvement retailer. It operates The Home Depot stores that sell various building materials, home improvement products, lawn and garden products, and décor products, as well as facilities maintenance, repair, and operations products The company also offers installation services for flooring, cabinets and cabinet makeovers, countertops, furnaces and central air systems, and windows. In addition, it provides tool and equipment rental services. The company primarily serves homeowners; and professional renovators/remodelers, general contractors, maintenance professionals, handymen, property managers, building service contractors, and specialty tradesmen, such as electricians, plumbers, and painters. It also sells its products through websites, including homedepot.com; blinds.com, an online site for custom window coverings; and thecompanystore.com, an online site for textiles and décor products. As of December 31, 2021, the company operated 2,317 stores in the United States. The Home Depot, Inc. was incorporated in 1978 and is based in Atlanta, Georgia.

How the Company Makes Money

Home Depot generates revenue primarily through the retail sale of home improvement products and services. Its key revenue streams include sales from in-store purchases, online sales via its e-commerce platform, and installation services. The company benefits from a diverse customer base that includes individual homeowners, professional contractors, and businesses, allowing it to capture a wide market share. Additionally, Home Depot has established significant partnerships with suppliers and manufacturers, ensuring a steady supply of goods at competitive prices. The company's focus on enhancing customer experience through an omnichannel approach, combining physical stores with digital capabilities, further contributes to its earnings by driving sales and increasing customer loyalty.

Home Depot Financial Statement Overview

Summary

Home Depot demonstrates solid financial performance with strong revenue growth and profitability. However, the high leverage and low equity levels pose potential risks. Cash flow generation is robust, but there is a need to monitor free cash flow trends closely. Overall, the company is well-positioned in the home improvement industry, but careful management of financial leverage is crucial.

Income Statement

Home Depot shows strong revenue growth with a TTM increase of 6.88% compared to the previous year. The gross profit margin is stable at around 33%, and the net profit margin is healthy at 8.86% for TTM. EBIT and EBITDA margins are robust, indicating efficient operations. However, the slight decline in net income suggests some pressure on profitability.

Balance Sheet

The balance sheet reflects a high debt-to-equity ratio of 5.75 in TTM, indicating significant leverage. Return on equity is strong at 188.48%, driven by high net income relative to equity, but this is partly due to low equity levels. The equity ratio is low, suggesting potential financial risk if market conditions change.

Cash Flow

Operating cash flow remains strong, though there is a slight decline in free cash flow growth. The free cash flow to net income ratio is healthy at 79.62%, indicating good cash generation relative to profits. The operating cash flow to net income ratio is moderate, suggesting room for improvement in cash flow efficiency.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	166.19B	159.51B	152.67B	157.40B	151.16B	132.11B
Gross Profit	55.43B	53.31B	50.96B	52.78B	50.83B	44.85B
EBITDA	25.08B	25.43B	25.11B	27.07B	25.95B	20.84B
Net Income	14.58B	14.81B	15.14B	17.11B	16.43B	12.87B
Balance Sheet
Total Assets	106.27B	96.12B	76.53B	76.44B	71.88B	70.58B
Cash, Cash Equivalents and Short-Term Investments	1.68B	1.66B	3.76B	2.76B	2.34B	7.89B
Total Debt	58.95B	62.29B	52.24B	50.36B	46.27B	43.42B
Total Liabilities	94.16B	89.48B	75.49B	74.88B	73.57B	67.28B
Stockholders Equity	12.12B	6.64B	1.04B	1.56B	-1.70B	3.30B
Cash Flow
Free Cash Flow	13.93B	16.32B	17.95B	11.50B	14.01B	16.38B
Operating Cash Flow	17.65B	19.81B	21.17B	14.62B	16.57B	18.84B
Investing Cash Flow	-8.88B	-21.03B	-4.73B	-3.14B	-2.97B	-10.17B
Financing Cash Flow	-8.56B	-694.00M	-15.44B	-10.99B	-19.12B	-2.98B

Home Depot Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 345.00
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HD, the sentiment is Negative. The current price of 345 is below the 20-day moving average (MA) of 351.51, below the 50-day MA of 364.00, and below the 200-day MA of 369.40, indicating a bearish trend. The MACD of -2.65 indicates Negative momentum. The RSI at 41.14 is Neutral, neither overbought nor oversold. The STOCH value of 40.63 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for HD.

Home Depot Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
TSCO	73 Outperform	$27.16B	24.81	45.46%	1.79%	4.26%	0.73%
COST	72 Outperform	$379.78B	45.83	30.32%	0.59%	8.34%	9.58%
LOW	69 Neutral	$134.88B	19.93	―	1.95%	0.64%	0.58%
HD	66 Neutral	$343.45B	23.52	162.91%	2.67%	7.50%	-0.38%
FND	63 Neutral	$6.71B	31.13	9.69%	―	6.04%	10.26%
BBY	62 Neutral	$15.05B	23.71	22.49%	5.29%	-0.95%	-48.28%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%

Home Depot Corporate Events

Home Depot Updates By-Laws for Shareholder Meetings

On November 20, 2025, Home Depot‘s Board of Directors approved amendments to the company’s by-laws, aligning the advance notice window for director nominations and business proposals, clarifying nomination limits, and updating informational requirements. These changes also include procedural updates for shareholder meetings and align with recent Delaware law changes, impacting how shareholder proposals and nominations are submitted for future meetings.

Home Depot Earnings Call Disrupted by Outage

On November 18, 2025, Home Depot held an earnings conference call to discuss its financial results for the fiscal quarter ended November 2, 2025. However, a third-party service provider outage prevented some listeners from accessing the call via the company’s investor relations website. A replay and transcript will be made available on the website to ensure stakeholders can access the information.

Home Depot Completes $2 Billion Notes Offering

On September 15, 2025, Home Depot completed a public offering of $2 billion in notes with varying maturity dates and interest rates. This financial move is part of the company’s strategy to manage its capital structure and potentially fund future growth initiatives, impacting its financial operations and stakeholder interests.

Home Depot Announces $2 Billion Notes Offering

On September 8, 2025, Home Depot entered into an Underwriting Agreement with several financial institutions for a public offering of $2 billion in aggregate principal amount of notes, with varying maturity dates in 2028, 2030, and 2035. This strategic financial move, expected to close on September 15, 2025, is aimed at enhancing the company’s capital structure and may impact its market positioning and stakeholder interests.