Home Depot (HD) AI Stock Analysis

• Market Cap: $404.44B
• Dividend Yield: 2.22%
• Average Volume (3M): 3.42M
• Price to Earnings (P/E): 27.6
• Beta (1Y): 0.87
• Revenue Growth: 8.52%
• EPS Growth: -0.97%
• Country: US
• Employees: 470,100
• Sector: Consumer Cyclical
• Sector Strength: 80
• Industry: Home Improvement
• EPS (TTM): 4.68
• Shares Outstanding: 995,386,660
• 10 Day Avg. Volume: 3,428,750
• 30 Day Avg. Volume: 3,419,047
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 1.06
• Enterprise Value/Revenue: 2.60
• Enterprise Value/Gross Profit: 7.81
• Enterprise Value/Ebitda: 17.00
• 1Y Price Target: $445.73
• Price Target Upside: 8.27% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 25

• Rating: 75 Outperform
• Price Target: $458.00 ▲(11.25% Upside)

Home Depot's overall stock score is driven by strong financial performance and positive earnings call sentiment, highlighting robust sales growth and strategic initiatives. However, high leverage, valuation concerns, and technical indicators suggesting overbought conditions temper the score.

Positive Factors

Acquisitions and Expansion

The recent acquisitions of SRS and GMS allow Home Depot to better serve the larger Pro market, expanding its footprint across the US and Canada.

Financial Performance

Net sales increased 4.9% y/y to $45.3bn with comparable sales up +1.0% y/y.

Market Positioning

Home Depot is expected to see continued market share gains as it accelerates growth with complex professional customers.

Negative Factors

Competition

Analyst prefers LOW over HD in the near term due to LOW's more cyclical nature and current valuation gap.

Home Sales Turnover

Without existing home sales turnover, maintaining above a 3% comp in 2026 remains uncertain and may need lower long-dated rates.

Investment and Margins

HD is currently in an investment cycle, focusing on complex Pro assets which could weigh on margins and returns.

Home Depot Business Overview & Revenue Model

Company Description

Home Depot, Inc. is a leading home improvement retailer based in the United States, operating a vast network of stores that cater to both professional contractors and do-it-yourself (DIY) customers. The company offers a broad range of products in various sectors, including building materials, home improvement products, lawn and garden supplies, and home décor. With thousands of stores across North America, Home Depot also provides services such as installation, tool rental, and home improvement advice, solidifying its position as a one-stop shop for home improvement needs.

How the Company Makes Money

Home Depot generates revenue primarily through the sale of home improvement products and services. Its main revenue streams include sales of building materials, appliances, tools, and lawn and garden products, which are complemented by services such as installation, repair, and tool rental. The company also benefits from a substantial online presence, allowing for e-commerce sales that contribute significantly to its overall revenue. Additionally, partnerships with various suppliers and manufacturers enable Home Depot to offer exclusive products and promotions, enhancing its product offerings and driving sales. Seasonal sales events and promotions also play a crucial role in boosting revenue during peak shopping periods. Overall, the combination of retail sales, services, and e-commerce creates a diverse revenue model that supports Home Depot's earnings.

Home Depot Financial Statement Overview

Summary

Home Depot exhibits strong revenue growth and profitability, supported by a solid income statement. However, high leverage on the balance sheet and declining free cash flow growth present potential risks. The company should focus on improving operational efficiency and managing debt levels to sustain its financial health.

Income Statement

Home Depot's income statement reflects strong revenue growth and solid profitability. The TTM data shows a slight increase in revenue growth rate at 1.29%, indicating stability in sales. Gross profit margin remains robust at approximately 33.34%, and the net profit margin is healthy at 8.98%. However, the EBIT and EBITDA margins have slightly decreased compared to previous periods, suggesting some pressure on operational efficiency.

Balance Sheet

The balance sheet reveals a high debt-to-equity ratio of 7.70, indicating significant leverage, which could pose a risk if not managed carefully. Return on equity is modest at 2.36%, reflecting moderate profitability relative to shareholder equity. The equity ratio is low, suggesting a high reliance on debt financing. Despite these concerns, the company maintains a strong asset base.

Cash Flow

Cash flow analysis shows a decline in free cash flow growth, down by 6.35% in the TTM period, which could impact future investments. The operating cash flow to net income ratio is 0.59, indicating adequate cash generation relative to net income. The free cash flow to net income ratio is strong at 0.82, demonstrating efficient conversion of profits into cash.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	165.05B	159.51B	152.67B	157.40B	151.16B	132.11B
Gross Profit	55.04B	53.31B	50.96B	52.78B	50.83B	44.85B
EBITDA	25.29B	25.43B	25.11B	27.07B	25.95B	20.84B
Net Income	14.63B	14.81B	15.14B	17.11B	16.43B	12.87B
Balance Sheet
Total Assets	100.05B	96.12B	76.53B	76.44B	71.88B	70.58B
Cash, Cash Equivalents and Short-Term Investments	2.80B	1.66B	3.76B	2.76B	2.34B	7.89B
Total Debt	61.32B	62.29B	52.24B	50.36B	46.27B	43.42B
Total Liabilities	89.38B	89.48B	75.49B	74.88B	73.57B	67.28B
Stockholders Equity	10.66B	6.64B	1.04B	1.56B	-1.70B	3.30B
Cash Flow
Free Cash Flow	14.23B	16.32B	17.95B	11.50B	14.01B	16.38B
Operating Cash Flow	17.87B	19.81B	21.17B	14.62B	16.57B	18.84B
Investing Cash Flow	-3.83B	-21.03B	-4.73B	-3.14B	-2.97B	-10.17B
Financing Cash Flow	-12.79B	-694.00M	-15.44B	-10.99B	-19.12B	-2.98B

Home Depot Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 411.69
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

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 411.69 is above the 20-day moving average (MA) of 400.01, above the 50-day MA of 380.99, and above the 200-day MA of 378.55, indicating a bullish trend. The MACD of 8.04 indicates Positive momentum. The RSI at 66.44 is Neutral, neither overbought nor oversold. The STOCH value of 58.63 is Neutral, 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
TSCO	80 Outperform	$32.60B	30.26	45.34%	1.50%	2.96%	-2.02%
DHI	78 Outperform	$50.76B	13.65	16.27%	0.91%	-7.31%	-16.37%
HD	75 Outperform	$404.44B	27.60	193.95%	2.22%	8.52%	-0.97%
BBY	70 Outperform	$15.74B	18.20	30.21%	4.91%	-3.23%	-28.11%
LOW	69 Neutral	$145.11B	21.26	-51.07%	1.76%	-0.49%	0.83%
FND	68 Neutral	$8.51B	40.27	9.73%	―	4.88%	0.05%
Sector *	61 Neutral	$17.96B	13.14	-5.29%	3.00%	1.25%	-13.95%

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.