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1. Company Snapshot

1.a. 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.

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1.b. Last Insights on HD

The Home Depot's recent performance was negatively impacted by a downbeat earnings report and guidance, causing a sell-off. The company's Q3 results were affected by missed storm-driven demand, consumer uncertainty, and housing-market pressures. The CEO issued cautionary comments on housing demand and cut the profit outlook, citing consumers pulling back on discretionary home-improvement spending. Additionally, institutional investors, such as Alteri Wealth LLC, have reduced their stakes in the company, selling 322 shares during the period. Margin pressure and weak demand have also been cited as concerns.

1.c. Company Highlights

2. The Home Depot's Fiscal 2025 Earnings: A Mixed Bag

The Home Depot reported fiscal 2025 sales of $164.7 billion, a 3.2% increase from the previous year, with comparable sales increasing 0.3% and U.S. comps increasing 0.5%. Adjusted diluted earnings per share were $14.69, compared to $15.24 in the prior period. In the fourth quarter, comp sales increased 0.4% and adjusted diluted earnings per share were $2.72, beating analyst estimates of $2.53. The company's gross margin was approximately 33.3% for the year, with operating expenses increasing approximately 70 basis points to 20.6% of sales.

Publication Date: Feb -25

📋 Highlights
  • Annual Sales Growth:: Fiscal 2025 sales reached $164.7 billion, a 3.2% increase YoY, with U.S. comparable sales rising 0.5% and overall comps up 0.3%.
  • Earnings Decline:: Adjusted diluted EPS fell to $14.69 in 2025 from $15.24 in 2024, with Q4 EPS dropping to $2.72 from $3.13 YoY.
  • Regional Performance:: Northern and Western divisions saw positive comps, Mexico posted local-currency gains, while Canada reported negative comps.
  • 2026 Guidance:: Anticipates 2.5–4.5% sales growth, flat to 2% comp sales, and adjusted EPS growth of flat to 4%, with gross margin expected at 33.1%.
  • Strategic Investments:: $3.7 billion in 2025 capex, $9.2 billion in dividends, and 2.5% of sales allocated to 2026 capex to enhance Pro services and digital tools like AI takeoff for projects.

Regional Performance and Business Highlights

The company's regional performance varied, with the Northern and Western divisions posting positive comps. Mexico reported positive comps in local currency, while Canada reported negative comps. The company is investing in its business to drive core and culture, deliver a frictionless interconnected experience, and win the Pro. The Pro ecosystem is seeing traction, with Pros spending more with the company. As the company noted, "Associates are delivering exceptional service, and merchants are offering tremendous value, as evidenced by record-setting events in the quarter."

Outlook and Guidance

Looking ahead to fiscal 2026, the company expects total sales growth of approximately 2.5% to 4.5%, comparable sales growth of approximately flat to 2%, and adjusted diluted earnings per share to grow approximately flat to 4%. The company's guidance implies a challenging market environment, with consumer uncertainty and pressure on housing. The company's valuation metrics, including a P/E Ratio of 26.97 and P/S Ratio of 2.32, suggest that the market is pricing in a moderate growth outlook.

Operational Highlights and Investments

The company is making significant investments in its digital planning tools, including project management and list builders for its Pros. The company's delivery capabilities have improved, with record levels of delivery reliability from its order management investments. The company is also investing in E-Procurement integration and construction management software integration to further support its B2B business. These investments are expected to drive growth and improve customer experience.

Valuation and Return Metrics

The company's valuation metrics, including a ROE of 130.02% and ROIC of 19.03%, suggest a strong return profile. The company's dividend yield of 2.39% and free cash flow yield of 3.3% provide a reasonable return for investors. Overall, the company's financial performance and guidance suggest a stable outlook, with opportunities for growth in its Pro ecosystem and B2B business.

3. NewsRoom

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The Home Depot, Inc. $HD Shares Sold by Beacon Investment Advisory Services Inc.

09:44

Source: defenseworld.net

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Empirical Financial Services LLC d.b.a. Empirical Wealth Management Raises Stake in The Home Depot, Inc. $HD

08:33

Source: defenseworld.net

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Compagnie Lombard Odier SCmA Grows Position in The Home Depot, Inc. $HD

08:33

Source: defenseworld.net

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Home Depot Recruits Ford Tech Leader to Scale Agentic AI

02:47

Source: pymnts.com

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Home Depot (HD) Stock Sinks As Market Gains: Here's Why

Apr -02

Source: zacks.com

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Brookstone Capital Management Raises Stock Position in The Home Depot, Inc. $HD

Apr -01

Source: defenseworld.net

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The Home Depot designa a Franziska Bell como vicepresidenta ejecutiva y directora de Tecnología

Apr -01

Source: prnewswire.com

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April Dogs Of The Dow: One To Buy

Mar -31

Source: seekingalpha.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (3.54%)

6. Segments

U.S., Canada, and Mexico

Expected Growth: 3.5%

The Home Depot's growth in the U.S., Canada, and Mexico is driven by a 3.5% increase in same-store sales, fueled by a strong housing market, improving consumer confidence, and investments in e-commerce and technology. Additionally, strategic expansions and acquisitions in Canada and Mexico contribute to growth, while a focus on customer service and supply chain optimization enhances overall performance.

Other

Expected Growth: 4.5%

The Home Depot's 'Other' segment growth of 4.5% is driven by increased demand for emerging categories like smart home products and augmented reality experiences. Additionally, the company's expansion into new markets and strategic investments in e-commerce and digital transformation have contributed to this growth.

7. Detailed Products

Lumber

A wide selection of lumber products, including dimensional lumber, plywood, and oriented strand board (OSB)

Building Materials

A variety of building materials, including drywall, roofing, and insulation

Kitchen and Bath

A wide range of kitchen and bath fixtures, including cabinets, countertops, and appliances

Paint and Decorating

A variety of paint, stains, and decorating supplies

Electrical

A wide selection of electrical supplies, including lighting, outlets, and switches

Plumbing

A variety of plumbing supplies, including pipes, fittings, and fixtures

Hardware

A wide range of hardware supplies, including tools, fasteners, and building materials

Lawn and Garden

A variety of lawn and garden supplies, including plants, gardening tools, and outdoor decor

Appliances

A wide selection of appliances, including refrigerators, ovens, and dishwashers

Home Services

A range of home services, including installation, repair, and maintenance

8. The Home Depot, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes is low for The Home Depot, Inc. because the company's products are highly specialized and there are limited alternatives available to customers.

Bargaining Power Of Customers

The bargaining power of customers is medium for The Home Depot, Inc. because while customers have some flexibility to shop around, the company's strong brand and wide product offerings limit their bargaining power.

Bargaining Power Of Suppliers

The bargaining power of suppliers is low for The Home Depot, Inc. because the company is a large and important customer for many suppliers, giving it significant negotiating power.

Threat Of New Entrants

The threat of new entrants is low for The Home Depot, Inc. because the company has significant barriers to entry, including high startup costs and the need for a large distribution network.

Intensity Of Rivalry

The intensity of rivalry is high for The Home Depot, Inc. because the company operates in a highly competitive industry with several large and established competitors.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 97.58%
Debt Cost 4.89%
Equity Weight 2.42%
Equity Cost 9.01%
WACC 4.99%
Leverage 4038.41%

11. Quality Control: The Home Depot, Inc. passed 5 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
PulteGroup

A-Score: 5.8/10

Value: 6.0

Growth: 8.8

Quality: 7.7

Yield: 2.0

Momentum: 4.0

Volatility: 6.3

1-Year Total Return ->

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Stock-Card
Booking

A-Score: 5.8/10

Value: 3.6

Growth: 8.7

Quality: 8.0

Yield: 1.0

Momentum: 5.0

Volatility: 8.3

1-Year Total Return ->

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Stock-Card
Lowe's

A-Score: 5.7/10

Value: 5.7

Growth: 6.7

Quality: 5.2

Yield: 4.0

Momentum: 4.0

Volatility: 9.0

1-Year Total Return ->

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Haverty Furniture

A-Score: 5.6/10

Value: 5.8

Growth: 3.4

Quality: 4.6

Yield: 9.0

Momentum: 5.0

Volatility: 6.0

1-Year Total Return ->

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Stock-Card
Home Depot

A-Score: 5.4/10

Value: 2.6

Growth: 6.0

Quality: 5.5

Yield: 6.0

Momentum: 3.0

Volatility: 9.3

1-Year Total Return ->

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Stock-Card
Lennar

A-Score: 4.8/10

Value: 6.8

Growth: 4.3

Quality: 5.9

Yield: 3.0

Momentum: 2.5

Volatility: 6.3

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

321.63$

Current Price

321.63$

Potential

-0.00%

Expected Cash-Flows