Home Depot (HD)
Consumer · NYSE · US
Fundamentals
Valuation and ratings
Home Depot trades at $348.02, which is 24% below the $430.00 our discounted cash flow model puts on the business. On that measure alone it screens as undervalued, though a DCF is an argument rather than a measurement, and the market is frequently right about why something is cheap.
Our moat model scores it 78 out of 100, which is a wide moat. A moat is a structural reason competitors cannot take the profits away, and it matters more to a long holding period than any single quarter's numbers do.
It changes hands at 24.4 times earnings. Be careful reading that in isolation: for a cyclical business a low P/E arrives at the top of the cycle, when profits are peaking and about to fall, which is exactly when the shares look cheapest and are not.
About Home Depot
The Home Depot, Inc. operates as a home improvement retailer in the United States and internationally. It sells 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, water heaters, baths, garage doors, cabinets, cabinet makeovers, countertops, sheds, furnaces and central air systems, windows, and window coverings. In addition, it provides tool and equipment rental services. The company serves consumers, such as do-it-yourself homeowners and do-it-for-me customers; and professional renovators/remodelers, general contractors, homebuilders, maintenance professionals, handymen, property managers, building service contractors and specialty tradespeople, such as electricians, landscapers, insulation installers, plumbers, painters, pool contractors, roofers, and wallboard and ceiling installers. It sells its products through websites and its mobile applications, including homedepot.com; homedepot.ca and homedepot.com.mx; blinds.com, justblinds.com, and americanblinds.com for custom window coverings; constructionresourcesusa.com or design-oriented surfaces, appliances, and architectural specialty products; thecompanystore.com, an online site for textiles and décor products; hdsupply.com for maintenance, repair, and operations products and related services; and srsdistribution.com, heritagelandscapesupplygroup.com, heritagepoolsupplygroup.com, and gms.com for roofing and building materials, landscape, and pool products; and The Home Depot stores. The Home Depot, Inc. was incorporated in 1978 and is headquartered in Atlanta, Georgia.
HD passes 6 of our 30 screens today
Each screen prints the exact criteria it used, and the circumstances in which it is wrong.
Smart money ownership
24 of the funds we track reported a position in their latest SEC 13F filing. Largest first:
- Capital Research Global, Capital Research Global Investors$4.93B · 0.8% of book
- Ken Fisher, Fisher Asset Management, LLC$3.39B · 1.1% of book
- D. E. Shaw, D. E. Shaw & Co., Inc.$1.24B · 0.7% of book
- Parnassus Investments, PARNASSUS INVESTMENTS, LLC$645.67M · 1.9% of book
- Thomas Gayner, MARKEL GROUP INC.$605.16M · 2.7% of book
A word of warning on reading these figures: a 13F reports the market value of a holding, so a fund that traded nothing at all still appears to have sold when the price fell. We found 102 companies where the standard reading gives the opposite answer. Only the share count is honest.
Common questions
Is Home Depot (HD) undervalued?
Against our discounted cash flow estimate of $430.00, HD at $348.02 is 24% below fair value. That is one model's answer, not a recommendation, and most of a DCF's output sits in a terminal value nobody can forecast.
Which funds own HD?
24 of the institutions we track reported a position in HD in their most recent SEC 13F filing. A 13F is filed up to 45 days after quarter end, so it tells you what a fund held then, not what it holds now.
What is HD's P/E ratio?
HD trades at 24.4 times earnings. A low P/E is not automatically cheap: on a cyclical company it is usually a warning that earnings are at a peak.
The full research page for HD, with financial statements, ownership detail, peer comparison and alerts, is free inside the app.
Data from company filings, exchange quotes and SEC EDGAR 13F disclosures. Quotes are delayed. Metrics we do not have are left out rather than estimated. Educational information, not financial advice.