Home Depot (HD) AI Stock Analysis

• Market Cap: $393.99B
• Dividend Yield: 2.27%
• Average Volume (3M): 2.97M
• Price to Earnings (P/E): 26.9
• Beta (1Y): 0.85
• Revenue Growth: 7.33%
• EPS Growth: -1.19%
• Country: US
• Employees: 470,100
• Sector: Consumer Cyclical
• Sector Strength: 75
• Industry: Home Improvement
• EPS (TTM): 3.56
• Shares Outstanding: 994,928,000
• 10 Day Avg. Volume: 2,807,700
• 30 Day Avg. Volume: 2,967,527
• PEG Ratio: N/A
• Price to Book (P/B): 0.00
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 0.00
• Enterprise Value/Market Cap: 1.07
• Enterprise Value/Revenue: 2.59
• Enterprise Value/Gross Profit: 7.77
• Enterprise Value/Ebitda: 16.47
• 1Y Price Target: $429.53
• Price Target Upside: 7.30% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 25

• Rating: 74 Outperform
• Price Target: $418.00 ▲(4.42% Upside)

Home Depot maintains a strong financial position with solid profitability, although high leverage poses some risks. The company's technical indicators and valuation suggest a stable but cautious outlook, while mixed earnings call results highlight both strategic strengths and operational challenges.

Positive Factors

Acquisition Strategy

The acquisition of GMS is expected to enable faster top-line growth for Home Depot when the housing market turns.

Competitive Position

HD is viewed as the best positioned home improvement retailer to gain share regardless of the demand environment due to its large scale.

Financial Performance

HD expects the transaction to be accretive to adj. EPS in the first year after close, excluding synergies.

Negative Factors

Demand Uncertainty

Uncertainty and deferral of large projects are common themes from HD’s conversations with Pro customers, indicating potential challenges in demand.

Financial Constraints

A potential acquisition deal would delay the resumption of share buybacks by another year to FY2028.

Market Challenges

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

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 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: 400.32
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• 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 400.32 is above the 20-day moving average (MA) of 380.26, above the 50-day MA of 370.24, and above the 200-day MA of 379.73, indicating a bullish trend. The MACD of 8.29 indicates Negative momentum. The RSI at 68.26 is Neutral, neither overbought nor oversold. The STOCH value of 91.75 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
TSCO	79 Outperform	$31.63B	29.36	45.34%	1.51%	2.96%	-2.02%
DG	77 Outperform	$25.35B	21.97	15.69%	2.06%	4.77%	-23.73%
TJX	76 Outperform	$148.32B	31.35	60.36%	1.20%	3.79%	5.23%
HD	74 Outperform	$393.99B	26.87	299.52%	2.27%	7.33%	-1.19%
FND	71 Outperform	$8.87B	42.26	9.73%	―	4.88%	0.05%
LOW	63 Neutral	$137.23B	20.28	-51.07%	1.84%	-2.52%	-2.98%
Sector *	61 Neutral	$17.24B	11.48	-5.97%	3.08%	1.37%	-15.54%

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.