Home Depot (HD) AI Stock Analysis

• Market Cap: $377.84B
• Dividend Yield: 2.41%
• Average Volume (3M): 3.12M
• Price to Earnings (P/E): 25.8
• Beta (1Y): 0.84
• Revenue Growth: 8.52%
• EPS Growth: -0.97%
• Country: US
• Employees: 470,100
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Home Improvement
• EPS (TTM): 4.68
• Shares Outstanding: 995,386,660
• 10 Day Avg. Volume: 2,781,103
• 30 Day Avg. Volume: 3,116,106
• PEG Ratio: -20.72
• Price to Book (P/B): 60.94
• Price to Sales (P/S): 2.54
• P/FCF Ratio: 24.79
• Enterprise Value/Market Cap: 1.14
• Enterprise Value/Revenue: 2.60
• Enterprise Value/Gross Profit: 7.81
• Enterprise Value/Ebitda: 17.00
• 1Y Price Target: $446.30
• Price Target Upside: 17.57% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 25

• Rating: 75 Outperform
• Price Target: $436.00 ▲(14.86% Upside)

Home Depot's overall stock score is driven by strong financial performance and positive earnings call sentiment. However, technical indicators suggest bearish momentum, and high valuation metrics indicate potential overvaluation. The company's strategic initiatives and dividend yield provide some support, but challenges in larger projects and margin pressures remain.

Positive Factors

Revenue Growth

Consistent revenue growth indicates strong market demand and effective sales strategies, reinforcing Home Depot's position as a leader in the home improvement sector.

Strategic Acquisitions

Strategic acquisitions like SRS enhance Home Depot's market share and operational capabilities, providing a competitive edge and supporting long-term growth.

Pro Customer Engagement

Enhanced Pro customer engagement strengthens Home Depot's relationship with professional contractors, boosting loyalty and sales, and solidifying its market position.

Negative Factors

High Leverage

High leverage can increase financial risk, limiting flexibility and potentially impacting the company's ability to invest in growth opportunities.

Decline in Larger Projects

A decline in larger projects may signal reduced consumer confidence and spending, affecting Home Depot's revenue from high-value transactions.

Margin Pressure

Decreasing operating margins suggest rising costs or pricing pressures, which could impact profitability if not addressed through efficiency improvements.

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 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: Negative
• Last Price: 379.59
• 50DMA: Negative
• 100DMA: Negative
• 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 Negative. The current price of 379.59 is below the 20-day moving average (MA) of 384.84, below the 50-day MA of 400.26, and above the 200-day MA of 378.49, indicating a neutral trend. The MACD of -4.76 indicates Positive momentum. The RSI at 36.60 is Neutral, neither overbought nor oversold. The STOCH value of 21.20 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
HD	―	$377.84B	25.79	193.95%	2.41%	8.52%	-0.97%
DHI	―	$44.44B	12.89	14.48%	1.04%	-6.93%	-19.41%
BBY	―	$17.26B	22.64	26.72%	4.61%	-2.21%	-37.30%
TSCO	―	$28.68B	26.12	45.46%	1.68%	4.26%	0.73%
Sector *	―	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
LOW	―	$133.55B	19.56	―	1.97%	-0.49%	0.83%
FND	―	$6.73B	32.05	9.73%	―	4.88%	0.05%

Home Depot Corporate Events

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.

The most recent analyst rating on (HD) stock is a Buy with a $444.00 price target. To see the full list of analyst forecasts on Home Depot stock, see the HD Stock Forecast page.

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.

The most recent analyst rating on (HD) stock is a Buy with a $444.00 price target. To see the full list of analyst forecasts on Home Depot stock, see the HD Stock Forecast page.

Home Depot’s Earnings Call: Strong Growth Amid Challenges

The latest earnings call from Home Depot reflects a generally positive sentiment, underscored by strong sales growth and strategic acquisitions. The company has demonstrated increased online engagement, although it faces challenges such as declines in larger projects, flat earnings per share (EPS), inventory issues, and margin pressure.

Home Depot Reports Steady Growth in Q2 2025

Home Depot, the world’s largest home improvement retailer, operates in the retail sector with a focus on providing a wide range of home improvement products and services across its extensive network of stores in the U.S., Canada, and Mexico.