Fundamentals snapshot
HD · NYQ · Consumer Cyclical · Home Improvement Retail
Current price
$309.71
52-week range
$289.10 - $426.75
Market cap
$308.82B
One-glance verdict
Fair-value range $200.38 – $259.52 (cautious → optimistic — tap the ? for the math)
Wall Street consensus: $370.18 (71.3% higher than our fair-value estimate)
Buy below $172.92 for a 20% safety cushion
Balance sheet
Net debt $62.13B. Interest coverage shows how many times profit covers the interest bill.
What stands out
Quick scan of the biggest positives and negatives from the detailed checklist below.
What this company does
The Home Depot is a giant home improvement store where people buy everything from lumber and paint to kitchen appliances and garden supplies. It makes money from both everyday homeowners working on weekend projects and professional contractors who buy materials in bulk for their businesses. The company's success is often tied to the housing market, as more people buy and fix up homes when the economy is strong.
The Home Depot was started in 1978 by Bernie Marcus and Arthur Blank, who wanted to create home-improvement superstores that were bigger than any competitor's. They opened their first two warehouse-style stores in Atlanta, Georgia, in 1979, offering a huge selection of products at low prices. The company grew quickly, and by 1989 it had become the largest home improvement retailer in the United States, ahead of its rival Lowe's. A key part of its success was catering to both do-it-yourself (DIY) homeowners and professional contractors.
The Home Depot is a large retail company that sells a wide variety of products for home improvement, construction, and gardening. You can find everything from building materials like lumber and paint to appliances, tools, and garden supplies in their large, warehouse-like stores. They also offer services like tool and equipment rental and installation for things like flooring, water heaters, and windows. The company serves two main types of customers: everyday homeowners working on their own projects (often called 'do-it-yourself' or DIY customers) and professional contractors, builders, and maintenance workers (known as 'Pro' customers).
This part of the business focuses on everyday consumers who are looking to repair, upgrade, or decorate their own homes. These do-it-yourself (DIY) customers buy things like paint, lighting fixtures, garden supplies, and tools for their personal projects. While professional contractors often spend more per trip, the DIY segment represents a huge and consistent base of customers for the company. This business generates revenue (the total amount of money a company brings in from sales) through the direct sale of these goods in their physical stores and online.
A very large piece of Home Depot's business, making up roughly half of its sales, comes from serving professional customers. This includes general contractors, remodelers, electricians, plumbers, and other tradespeople who need materials and tools for their jobs. To serve these customers, Home Depot offers special services like bulk pricing, dedicated staff, and convenient job site delivery. This segment is important because these customers tend to buy in larger quantities and more frequently than DIY shoppers.
Beyond just selling products, The Home Depot also makes money by offering a range of 'do-it-for-me' services. This includes professional installation of many of the products they sell, such as flooring, kitchen cabinets, windows, and heating/air systems. The company also has a tool and truck rental program, which provides another stream of income. These services are a way for the company to earn more from each customer and to help those who aren't able or willing to do home improvement projects themselves.
The company's leadership is focused on making the shopping experience seamless between its physical stores and its website and app, a strategy known as an omnichannel approach. A major priority is to continue winning over professional (Pro) customers, who are a very valuable and growing part of the market. To do this, they are investing heavily in their supply chain (the network for getting products from the supplier to the customer) by building new distribution centers to get materials directly to job sites faster. They are also expanding their offerings and services specifically for Pros, including through strategic acquisitions (buying other companies) like the recent purchase of SRS Distribution.
Price history
Earnings history
Click any quarter to read the call summary and what the numbers say.
Is it cheap or expensive?
Wall Street consensus is the average analyst price target: $370.18 (71.3% higher than our fair-value estimate).
Buy below $172.92 for a 20% safety cushion. That means buying at least 20% below our fair value, as a buffer in case our estimate turns out too rosy.
Our most-likely fair value is $216.15 a share — about 30.2% below today's price of $309.71, so the stock currently looks expensive (overvalued).
Is it drowning in debt?
Net debt $62.1B. Interest coverage 8.7x.
The Home Depot, Inc.'s profit covers its interest bill about 8.7 times over. which is stronger than most peers shown here.
Total debt $63.73B Interest coverage 8.66x This is the baseline the peer rows are being compared against.
Total debt $42.56B Interest coverage 6.65x -23% vs HD Carries about 1.3x less debt cushion than HD.
Total debt $14.60B Interest coverage 8.16x -6% vs HD Has roughly the same debt cushion as HD.
Total debt $2.01B Interest coverage 23.97x +177% vs HD Carries about 2.8x more debt cushion than HD.
Total debt $5.29B Interest coverage 2.87x -67% vs HD Carries about 3.0x less debt cushion than HD.
What you should know
The numbers
Tap any ? icon to learn what it means.
Valuation
Profitability
Health
Growth
Cash flow
Dividend
Metric explainer
Debt comparison
What you should know