One-glance verdict
Within fair range
$253.60 our estimate vs market $314.51
Wall Street consensus: $379.75 (49.7% higher than our fair-value estimate)
24% above our estimate
Fundamentals snapshot
The Home Depot, Inc.
HD · NYQ · Consumer Cyclical · Home Improvement Retail
Current price
$314.51
52-week range
$277.15 - $397.63
Market cap
$313.78B
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.
The Home Depot sells everything you need to fix up your house, from lumber and paint to appliances and lawnmowers, and their main income comes from people buying these things for their homes. This matters because when people are spending money on their homes, it's a good sign for the economy and for the company's profits, which can be seen in things like their operating margin (the percent of each sales dollar left after day-to-day business costs). They also make money from installation and rental services, adding to their overall revenue.
How the company got here
The Home Depot was founded in 1978 by Bernard Marcus, Arthur Blank, Ron Brill, Pat Farrah, and Ken Langone. Marcus and Blank were inspired to create a new kind of home improvement store after being fired from their previous jobs. Their vision was to build superstores that were larger than competitors and offered a vast selection of products. The first two stores opened in Atlanta in 1979, and the company quickly expanded, becoming the youngest company to reach $30 billion in sales. Home Depot went public in 1981 and has since grown to become the largest home improvement retailer in the United States, with a significant international presence.
What it actually does
The Home Depot is a retailer that sells a wide variety of products for home improvement, construction, and maintenance. Think of it as a giant warehouse where you can find everything from lumber and paint to appliances and garden supplies. They cater to both individual homeowners who want to tackle DIY projects and professional contractors who build and renovate homes for a living. In addition to selling products, they also offer services like installation for things like flooring or water heaters, and tool rentals for those who need equipment for a specific job.
Retail Sales
This is the core of The Home Depot's business, where they sell a vast array of home improvement products directly to customers. This includes everything from building materials like lumber and drywall, to paint, flooring, tools, appliances, and lawn and garden supplies. They operate large warehouse-style stores and also have a significant online presence, allowing customers to shop in-store or online for delivery or pickup. This segment serves both do-it-yourself (DIY) homeowners and professional contractors, making it the largest part of the company's revenue.
Installation Services
Beyond just selling products, The Home Depot offers installation services for many of the items they sell. This means if you buy new flooring, a water heater, or even a new furnace, you can often have it professionally installed by a contractor arranged through Home Depot. This service is for customers who prefer to have the work done for them (often called "Do-It-For-Me" or DIFM customers) rather than doing it themselves. It's a way for the company to provide a more complete solution for home improvement projects and capture more of the customer's spending.
Tool and Equipment Rental
For customers who need specialized tools or equipment for a specific project but don't want to buy them, The Home Depot offers a tool and equipment rental service. This is particularly useful for DIYers who might only need a power washer for a weekend or a specific type of saw for a single project. It provides an accessible and cost-effective way for customers to complete their projects without the expense of purchasing the equipment outright. This segment adds another layer of service and convenience for their customer base.
Professional and Specialty Distribution
The Home Depot has expanded its reach beyond the typical retail customer by focusing more on professional contractors and specialty trades. Through acquisitions like HD Supply and SRS Distribution, they now offer maintenance, repair, and operations (MRO) products, as well as specialized supplies for trades like roofing, landscaping, and pool construction. This business-to-business (B2B) segment allows them to serve a different set of customers with bulk orders and specific product needs, making them a more comprehensive supplier for the construction and maintenance industries.
What management is betting on now
The Home Depot's current strategy focuses on creating a seamless, interconnected shopping experience for all customers, whether they shop online or in stores. A major priority is to "win the Pro," meaning they are heavily investing in serving professional contractors and tradespeople with specialized products, services, and distribution networks. They are also committed to innovation, aiming to deliver better products faster by integrating their merchandising and technology efforts. Additionally, sustainability is a growing focus, with goals to use 100% renewable energy in their operations by 2030.
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
Fetching…
Sources
Is it cheap or expensive?
Fair value $253.60 vs current price $314.51
Wall Street consensus is the average analyst price target: $379.75 (49.7% higher than our fair-value estimate).
Our most-likely fair value is $253.60 a share — about 19.4% away from today's price of $314.51, 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)
22.01x
Forward P/E
19.67x
P/B
18.89x
P/S
1.85x
EV/EBITDA
15.23x
PEG ratio
1.63x
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
14.29
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
3.0%
Payout ratio
64.8%
Last ex-div date
2026-09-03