US · NYSE · HD
Home Depot (HD) stock analysis: valuation and financials
Consumer Discretionary · RETAIL: Building Materials
$291.22 +0.2% Price as of Oct 12, 2026
World-class scale and 33% gross margin, but growth has stalled and ROIC halved to 24.4%; base case implies -6% upside at 20.4x earnings — fair, not cheap.
- Market cap
- $289.9B
- P/E
- 20.4x
- EV/Sales
- 2.0x
- FCF yield
- 5.2%
- 52-week range
- $281.15 – $391.90
- Next earnings
- Nov 17, 2026
Research as of Oct 13, 2026
Business quality scorecard
- Growth14
- Profitability47
- Cash flow79
- Balance sheet43
- Capital allocation61
- Valuation64
0–100, computed from reported financials; higher is better, and a higher valuation score means cheaper.
How it makes money
DIY homeowners, DIFM customers and Pro contractors pay for home improvement products, installation services and tool rental through 2,359 stores, digital channels and SRS/GMS branches; the single aggregated Primary segment is the profit engine, at 92.3% of revenue and 98.5% of profit with a 13.5% operating margin.
Financials by year
| FY2022Feb 2021–Jan 2022 | FY2023Feb 2022–Jan 2023 | FY2024Feb 2023–Jan 2024 | FY2025Feb 2024–Jan 2025 | FY2026Feb 2025–Jan 2026 | |
|---|---|---|---|---|---|
| Revenue | $151.2B | $157.4B | $152.7B | $159.5B | $164.7B |
| Revenue growth | +14.4% | +4.1% | -3.0% | +4.5% | +3.2% |
| Gross margin | 33.6% | 33.5% | 33.4% | 33.4% | 33.3% |
| Operating margin | 15.2% | 15.3% | 14.2% | 13.5% | 12.7% |
| Net income | $16.4B | $17.1B | $15.1B | $14.8B | $14.2B |
| Free cash flow | $14.0B | $11.5B | $17.9B | $16.3B | $12.6B |
| FCF margin | 9.3% | 7.3% | 11.8% | 10.2% | 7.7% |
Amounts in USD · What is free cash flow?
Margins FY2026 gross margin 33.3% vs 33.4% FY2025; operating margin fell to 12.7% from 13.5% on SG&A deleverage (18.6% of sales). TTM gross 33.2%, operating 12.4%. Q2 FY2027 gross rebounded to 33.7% on IEEPA tariff refunds.
- Cash flow HealthyCash conversion 1.30x: TTM operating cash flow $18.8B against net income $14.2B; FY2026 operating cash flow of $16.3B exceeded $14.2B of net income.
- Debt ManageableNet debt $46.1B, net debt/EBITDA 1.87x and interest coverage 8.70x, but debt/equity is 2.90x with TTM equity of only $16.6B against $22.9B of goodwill.
Balance sheet Leverage · Moderate
- Cash & short-term investments
- $2.1B
- Total debt
- $48.2B
- Net debt
- $46.1B
- Net debt / EBITDA
- 1.9x
- Interest coverage
- 8.7x
- Current ratio
- 1.1x
As of Aug 2, 2026 · Amounts in USD · How to read a balance sheet
Management and track record
- Management AdequateCapital allocation favors shareholders: five-year dividends of $41.2B and buybacks of $30.1B versus $25.0B of acquisitions; diluted shares shrink about 1.0% a year.
- Credibility MediumFY2026 (ended 2026-02-01) landed at or above guidance: revenue +3.2% vs about 3.0%, gross margin 33.3% vs 33.2%, operating margin 12.7% vs 12.6%, EPS -4.6% vs guided -6.0%.
Of 10 guided figures checked: 4 beat, 4 in range, 2 missed.
Valuation range
Implied value per share · Price when researched: $291.22
Each scenario assumes five years of revenue growth, an FCF margin and an exit multiple, discounted to today. The assumptions and sensitivities are in the full report.
The full report also covers
- Revenue, growth and outlook of each segment
- Moat and main competitors
- Key risks
- Capital allocation: where the free cash flow went
- What management promised, and what they delivered
- Scenario assumptions and sensitivities
- A source for every claim
- Ask AI about this company
The full report is for members.