HD

Home Depot

Fundamental data last updated:April 13, 2026

company profile

SECTOR

Consumer Cyclical

industry

Home Improvement Retail

Exchange

NYSE

County of HQ

United States

Next Earnings Date

05/19/26

Business Summary

HD operates a large-scale home improvement retail platform that monetizes both professional contractors and DIY consumers through product breadth, supply chain scale, and vendor leverage. The business generates cash by turning inventory efficiently across a nationwide store footprint while extracting margin from private-label mix and purchasing power. Its moat is rooted in scale advantages, entrenched supplier relationships, and logistical infrastructure that smaller competitors cannot replicate economically. High ROIC indicates the company converts invested capital into cash at attractive rates, reinforcing a self-funded growth and dividend engine that strengthens its competitive positioning over time.

VALUATION

P/E

23.7

Market Cap ($M USD)

$335,999

Forward P/E

20.7

PEG

2.2

PRICE TO SALES

2

PRICE TO BOOK

26.3

EV / EBITDA

15.9

5-Year Average P/E

DIVIDEND

Yield

2.70%

Annual Payout

$9.32

Payout Ratio

64.50%

Consecutive Years of Dividend Growth

10+

5-Year Dividend Growth Rate

7.10%

Financial Health & Profitability

Earnings Per Share

$14.26

Next Year EPS Growth Estimate

$16.31

Next Year Revenue Growth Estimate

4.10%

Return on Equity (ROE)

110.50%

Operating Margin

12.70%

Debt-to-Equity

5.1

Piotroski F-Score

4

Altman Z-Score

5.7

Return on Invested Capital (ROIC)

21.60%%

Current Ratio

1.1

Quick Ratio

Gainseekers Quantitative Analysis

Summary

At 23.7x earnings and 20.7x forward earnings, HD is not statistically cheap, but it is not priced like a broken retailer either. A PEG of 2.2 signals that growth expectations are modest relative to valuation, yet the Altman Z-Score of 5.7 indicates very low bankruptcy risk and strong balance sheet stability despite leverage. The market is assigning a premium multiple to a business generating 21.60% ROIC, which implies durable capital efficiency. However, the disconnect between EPS of 15.9 and EPS next year estimate of 14.26 suggests near-term earnings compression, meaning the valuation relies more on resilience than acceleration. This is a high-quality operator priced for durability, not explosive growth, and the safety profile is materially stronger than the leverage ratio alone would suggest.

AI Exposure / Tech Reliance

As a Home Improvement Retail operator within Consumer Cyclical, HD sits in a segment that can leverage AI primarily through supply chain optimization, inventory forecasting, and pricing analytics. Retailers that deploy data-driven merchandising and fulfillment tech can defend operating performance even in slower sales environments. The company’s ability to modernize logistics and store productivity will determine whether its 110.50% operating margin remains structurally advantaged or normalizes under competitive pressure.

The Bull Case

A GARP investor buys this because 21.60% ROIC is elite relative to most large-cap retailers, and capital efficiency ultimately compounds shareholder value. The Altman Z-Score of 5.7 signals financial durability, while a Current Ratio of 1.1 shows adequate liquidity without excessive idle capital. Despite a Piotroski F-Score of 4 being merely average, the company still delivers 4.10% return on equity and supports a 5.1 TTM yield with a 10+ five-year dividend growth profile, making it attractive to institutions seeking total return stability. With institutional ownership at 407.53%, this is clearly a heavily owned, institutionally validated compounder rather than a speculative play. The 20.7 forward P/E against a dominant industry position makes it a quality-at-a-reasonable-price setup rather than deep value.

The Bear Case

The capital structure is the biggest red flag: Debt/Equity at 12.70% is elevated and leaves limited room for macro shocks, especially in a cyclical sector. A PEG of 2.2 indicates investors are paying a premium relative to expected growth, and EPS is projected to fall from 15.9 to 14.26 next year, confirming deceleration. Short interest at 7.10% of float shows a meaningful minority betting against the stock, likely focused on margin sustainability and cyclical housing demand risk. With a Price/Book of 26.3, the equity cushion relative to valuation is thin, and any compression in operating performance could quickly re-rate the multiple downward. This is not a turnaround—it is a mature operator priced tightly, leaving little margin of safety if growth stalls.

Market Sentiment & Smart Money

Short Interest %

1.00%

Analyst Consensus

1.78

Average Analyst Price Target

$407.53

Institutional Ownership %

74.40%

1-Year Beta

0.79

Insider Buying % (6 Mo)

0.10%%

Distance to 52-Week High

79.10%%

Distance to 52-Week Low

107.00%%