One-glance verdict
Within fair range
$221.60 our estimate vs market $284.46
Wall Street consensus: $377.19 (70.2% higher than our fair-value estimate)
28% above our estimate
Fundamentals snapshot
The Home Depot, Inc.
HD · NYQ · Consumer Cyclical · Home Improvement Retail
Current price
$284.46
52-week range
$277.15 - $397.63
Market cap
$283.85B
Balance sheet
Distressed
8.66x Adequate
Net debt $61.10B. Interest coverage shows how many times profit covers the interest bill.
What stands out
3 Rewards
3 Risks
3 rewards · 3 risks
- Reward Revenue grew 2.7% last year.
- Reward Returns 104.3% on equity, ahead of 80% of its peers.
- Risk Net debt grew 34.4% over 3 years.
- Risk Operating margin compressed from 15.3% to 12.9% over 3 years.
What this company does
The Home Depot, Inc.
Home Depot is a massive home improvement store that sells everything from paint and lumber to appliances and garden supplies. It earns money from both everyday do-it-yourself homeowners and professional contractors who buy materials for their jobs. Because its business relies on people building and fixing up homes, the company's sales are often tied to the overall health of the housing market.
How the company got here
The Home Depot was founded in 1978 by Bernie Marcus and Arthur Blank, who envisioned a superstore for home improvement. They opened the first two stores in Atlanta, Georgia, in 1979, with the idea of offering a vast selection of products at low prices, staffed by knowledgeable employees. The company grew rapidly, becoming the largest home improvement retailer in the U.S. by 1990. Key moments include going public on the stock market in 1981, expanding into Canada in 1994 and Mexico in 2001, and launching its e-commerce (selling things online) website.
What it actually does
The Home Depot is a large retailer that sells products for home construction, improvement, and decoration. You can find everything from lumber and paint to kitchen appliances and garden supplies in their big-box, warehouse-style stores. Beyond just selling products, they also offer services like tool and equipment rentals and installation for things like flooring and water heaters. They serve two main types of customers: do-it-yourself (DIY) homeowners and professional contractors who work in trades like construction and remodeling.
Retail Customers
This is the part of the business most people know, focusing on everyday homeowners who are improving their own homes. These customers, often called 'do-it-yourself' or DIYers, buy things like paint, tools, gardening supplies, and building materials for their personal projects. The company also serves 'do-it-for-me' customers who buy products and then have Home Depot's authorized technicians install them. This segment generates a significant portion of the company's sales through its thousands of physical stores and its website.
Professional Customers
A very important and large part of Home Depot's business is selling to professional contractors, remodelers, and tradespeople. These 'Pro' customers often buy in larger quantities and need specialized services, like dedicated sales staff and bulk pricing. To better serve these customers, Home Depot has acquired companies like HD Supply and SRS Distribution, which specialize in providing maintenance, repair, and operations (MRO) products and construction materials directly to businesses and job sites. This professional segment accounts for a major slice of the company's overall revenue (the total money it brings in).
Online Sales
The company operates a major e-commerce (selling things online) business through its website, homedepot.com, and mobile apps. This allows customers to buy a wider range of products than what might be available in their local store and have them delivered directly to their homes or to a nearby store for pickup. Online sales are a growing part of the business and are tightly connected to the physical stores, creating what's called an omnichannel experience (a seamless shopping journey whether you're online or in-store). For example, Home Depot is the number one online retailer of large appliances in the U.S.
What management is betting on now
Management's current focus is on what they call an 'interconnected retail' experience, making it seamless for customers to shop online, in-store, or a combination of both. A major priority is to 'win the Pro customer' by expanding services and product offerings for professional contractors, which is a very valuable customer group. They are also investing heavily in their supply chain (the network that gets products from suppliers to stores or customers) to make deliveries faster and more efficient. The company is also focused on sustainability (operating in an environmentally friendly way) by working to reduce carbon emissions and investing in renewable energy.
Price history
How the share price has moved
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Earnings history
Last 8 quarters — what happened
Click any quarter to read the call summary and what the numbers say.
FY2025 Q3
$3.42B
FY2025 Q4
$3.57B
FY2026 Q1
$3.52B
FY2026 Q2
$3.73B
FY2026 Q3
$3.11B
FY2026 Q4
$2.29B
FY2027 Q1
$5.19B
FY2027 Q2
$4.51B
Revenue
$47.86B
Net income
$4.77B
Diluted EPS
4.79
Operating cash flow
$5.39B
Free cash flow
$4.51B
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Sources
Revenue
$41.77B
Net income
$3.29B
Diluted EPS
3.30
Operating cash flow
$6.03B
Free cash flow
$5.19B
Fetching…
Sources
Revenue
$38.20B
Net income
$2.57B
Diluted EPS
2.58
Operating cash flow
$3.35B
Free cash flow
$2.29B
Fetching…
Sources
Revenue
$41.35B
Net income
$3.60B
Diluted EPS
3.62
Operating cash flow
$4.01B
Free cash flow
$3.11B
Fetching…
Sources
Revenue
$45.28B
Net income
$4.55B
Diluted EPS
4.58
Operating cash flow
$4.64B
Free cash flow
$3.73B
Fetching…
Sources
Revenue
$39.86B
Net income
$3.43B
Diluted EPS
3.45
Operating cash flow
$4.33B
Free cash flow
$3.52B
Fetching…
Sources
Revenue
$39.70B
Net income
$3.00B
Diluted EPS
3.01
Operating cash flow
$4.67B
Free cash flow
$3.57B
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Sources
Revenue
$40.22B
Net income
$3.65B
Diluted EPS
3.67
Operating cash flow
$4.23B
Free cash flow
$3.42B
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Sources
Is it cheap or expensive?
Fair value $221.60 vs current price $284.46
Wall Street consensus is the average analyst price target: $377.19 (70.2% higher than our fair-value estimate).
Our most-likely fair value is $221.60 a share — about 22.1% away from today's price of $284.46, so the stock currently looks fairly priced.
Is it drowning in debt?
Distressed
Net debt $61.1B. Interest coverage 8.7x.
Net debt
$61.10B
Interest coverage
8.66x
The Home Depot, Inc.'s profit covers its interest bill about 8.7 times over. which is stronger than most peers shown here.
Distressed
Worse cushion
Baseline
Better cushion
HD
BASELINE
The Home Depot, Inc.
Total debt $63.19B Interest coverage 8.66x This is the baseline the peer rows are being compared against.
Total debt $42.03B Interest coverage 6.65x -23% vs HD Carries about 1.3x less debt cushion than HD.
Total debt $15.03B Interest coverage 8.16x -6% vs HD Has roughly the same debt cushion as HD.
Total debt $6.54B Interest coverage 21.22x +145% vs HD Carries about 2.5x more debt cushion than HD.
Total debt $2.01B Interest coverage 23.97x +177% vs HD Carries about 2.8x more debt cushion than HD.
Total debt $5.24B Interest coverage 2.87x -67% vs HD Carries about 3.0x less debt cushion than HD.
What you should know
The case for and against HD
3 Rewards
3 Risks
Rewards
-
Revenue grew 2.7% last year.
-
Returns 104.3% on equity, ahead of 80% of its peers.
-
Free cash flow was positive in 10/10 years.
Risks
-
Net debt grew 34.4% over 3 years.
-
Operating margin compressed from 15.3% to 12.9% over 3 years.
-
Insider ownership is only 0.1% (peer median: 1.3%).
The numbers
All the key metrics, grouped by purpose
Tap any ? icon to learn what it means.
Valuation
How expensive the stock looks
P/E (TTM)
19.92x
Forward P/E
17.75x
P/B
17.09x
P/S
1.68x
EV/EBITDA
13.91x
PEG ratio
2.40x
Profitability
How much profit each dollar creates
Gross margin
32.8%
Operating margin
12.9%
Net margin
8.4%
ROE
104.3%
ROA
12.1%
Health
Liquidity and balance-sheet strength
Debt / equity
3.80x
Current ratio
1.08x
Quick ratio
0.26x
Total debt
$63.19B
Total cash
$2.08B
Growth
How the business has been compounding
Revenue TTM
$169.18B
Revenue 5Y CAGR
2.2%
EPS TTM
14.28
EPS 5Y CAGR
-5.2%
Cash flow
How much cash the business throws off
Operating CF TTM
$18.78B
Free CF TTM
$12.65B
FCF margin
7.5%
Dividend
Shareholder payout
Yield
3.3%
Payout ratio
64.8%
Last ex-div date
2026-09-03