The Home Depot, Inc.
Orin's own judgment of how firmly the evidence points one way — not the chance the price goes up.
Home Depot's revenue growth is accelerating — Q2 FY2026 posted 5.7% YoY growth to $47.86B with positive EPS surprises in three of the last four quarters — but three consecutive years of full-year earnings decline (EPS from $16.69 in FY2022 to $14.23 in FY2025) and operating margin compression from 15.3% to 12.7% over the same span signal the profitability trough is not yet clearly behind the company.
The stock trades at a 21.6x P/E below the peer median of 24.8x, yet its 14.5x EV/EBITDA is 36% above the peer median, reflecting $65.35B in total debt against just $12.81B in equity. With insiders exclusively selling (zero acquisitions, net -$33.2M over 24 months) and persistent housing-market headwinds from elevated rates, the call remains hold pending evidence of margin stabilization.
What could go wrong
- Margin compression persists. Operating margin has compressed from 15.3% in FY2022 to 12.7% in FY2025; if SRS/GMS integration costs continue to weigh, margins may not recover.
- High leverage limits flexibility. Total debt of $65.35B against stockholders' equity of $12.81B as of FY2025 constrains buyback and investment capacity, and EV/EBITDA at 14.5x is 36% above the peer median of 10.7x.
- Housing macro headwinds. September CPI inflation at 3.7% and the prospect of further Fed rate hikes in 2026 could continue to depress housing turnover and big-ticket discretionary spending.
- Insider selling with no buys. Over the trailing 24 months, insiders recorded zero acquisitions and net dispositions of 86,453 shares worth $33.2M, including recent sales by the CFO and EVPs in September 2026.
What would change my mind
Where this comes from: results, quarter to 2 Aug · FY22 and FY25 fundamentals · peer comparison, 16 Oct · FY25 fundamentals. Orin's read on HD; not advice.
How has the share price moved?
Down 17.3% over twelve months, from $385.27 on 27 Oct 2025 to $318.50 at the Tue 27 Oct 2026 close. Its highest close in that time was $391.05 on 13 Feb 2026; the last close is 18.6% below it.
- Green line: the closing price each trading day.
- Grey line: the average closing price over the last 50 trading days.
- Dashed amber line: the same over the last 200 trading days — a slower, smoother line.
- Bars along the bottom: shares traded each day — green when it closed higher than the day before, rose when lower (the most, 12.8M, on 19 Dec 2025).
- Flags: the company's filings, on the day they were made (a 10-Q is the quarterly report and a 10-K the annual report; an 8-K reports a major event).
On file
All HD filingsLargest holders · 13F Q2 2026
Money flow| Filer | Position | Of fund |
|---|---|---|
| BlackRock | $28.8B | 0.4% |
| Vanguard Capital Management | $23.0B | 0.5% |
| State Street | $16.6B | 0.5% |
| Vanguard Portfolio Management | $9.1B | 0.4% |
| Geode Capital Management | $8.9B | 0.5% |
| Morgan Stanley | $8.0B | 0.4% |
| Charles Schwab Investment Management | $7.1B | 1.0% |
| FMR | $6.4B | 0.3% |
| Capital Research Global Investors | $5.9B | 0.8% |
| Bank of America | $5.8B | 0.4% |
183 of the 815 filers we track · quarter ended Q2 2026 · positions, not flows
Insiders, last 24 months: 190 Form 4 filings; open-market trades net −$33.2M. Of the 50 on hand, 0 were open-market purchases and 4 sales — the rest are grants, option exercises and tax withholding.
Ask Orin about HD
Orin answers questions about HD from its filings, transcripts and numbers — with the source behind every claim. Your own desk starts with 3 free days, card required.
Start 3 free days →How is it priced, against its own past and its sector?
Priced at 22.2× its last 12 months of profit (Tue 27 Oct close) — higher than in 1 of its last 5 fiscal years (middle 23.5×); the typical Consumer Cyclical company on the NYSE is at 20.4×.
| Measure | Now | Its usual | Sector |
|---|---|---|---|
| P/E | 22.2×below usual | 23.5× | 20.4× |
| P/S | 1.88×below usual | 2.33× | — |
| EV/EBITDA | 14.8×below usual | 16.6× | — |
| P/B | 19.1× | — | — |
- P/B: no usual level — it ran from 29.3× to 340× over its last 5 fiscal years, so a middle value says little.
- "Its usual" is the middle of its own last 5 fiscal years.
P/E: the share price divided by one year of profit per share — roughly how many years of today's profit the price pays for. A company that loses money has no P/E.
P/S: the company's total market value divided by one year of revenue. Used when there is no profit to measure.
EV/EBITDA: the price of the whole company (its shares plus its debt, minus its cash) divided by one year of operating profit before interest, tax and write-downs.
P/B: the share price divided by the book value per share — what the company owns minus what it owes, as its accounts record it. When book value is tiny, P/B swings wildly and says little.
What do the analysts who cover it publish?
The analysts' average 12-month price target is $379 (from $322 to $425) — 19% above the Tue 27 Oct close price. That is their published opinion, not Orin's.
$379
$322 – $425 · +19% against the last close
- 19 buy or overweight
- 7 hold
- 0 underweight or sell
Price target: the share price an analyst publishes for about 12 months ahead. It is the opinion of the firm that wrote it; the average is across the firms that cover the company.
Overweight / underweight: analysts' rating words: overweight means the firm expects the stock to do better than the others it covers, underweight worse. Their words, not Orin's.
How is it priced next to the companies it is compared to?
Priced at 22.2× its last 12 months of profit; the middle P/E of the 3 companies it is compared to that made a profit is 25.6×.
| Company | Market value | P/E | EV/EBITDA | Gross margin | Net margin | ROE |
|---|---|---|---|---|---|---|
| HDThe Home Depot, Inc. | $318B | 22.2× | 14.8× | 33.2% | 8.4% | 103% |
| LOWLowe's Companies, Inc. | $111B | 16.7× | 11.7× | 33.1% | 7.3% | n/m |
| SITESiteOne Landscape Supply, Inc. | $4B | 28.2× | 11.5× | 35.1% | 3.4% | 10% |
| URIUnited Rentals, Inc. | $72B | 25.6× | 11.3× | 38.5% | 16.3% | 31% |
- LOW: return on equity is not meaningful (n/m) — book value is below zero.
- The list of companies is the data vendor's choice, so it can include a company a person would not have picked.
Market value: the share price times the number of shares — what the whole company is priced at.
P/E: the share price divided by one year of profit per share — roughly how many years of today's profit the price pays for. A company that loses money has no P/E.
EV/EBITDA: the price of the whole company (its shares plus its debt, minus its cash) divided by one year of operating profit before interest, tax and write-downs.
Gross margin: the share of each $1 of sales left after the direct cost of making what was sold.
Net margin: the share of each $1 of sales kept as profit after every cost. Below zero, the company lost money.
ROE: return on equity: one year of profit as a share of the shareholders' money in the business (its book value).
Is it priced high or low compared with its own past?
Priced at 22.2× its last 12 months of profit (Tue 27 Oct close). It has no full fiscal year on file since its history starts, so there is nothing of its own to compare with.
- Now22.2×
P/E: the share price divided by one year of profit per share — roughly how many years of today's profit the price pays for. A company that loses money has no P/E.
Fiscal year (FY): the company's own 12-month accounting year, which need not match the calendar year.
How has its sector been priced?
Consumer Cyclical companies on the NYSE were priced at a typical 20.4× their yearly profit (Tue 27 Oct close).
- Now20.4×
- Each year is the middle of that calendar year's daily sector P/E; "Now" is the Tue 27 Oct close figure, the same one in the table above.
Sector P/E: the middle P/E of the companies in the same sector on the same stock exchange, as the data vendor works it out each day.
What does a cash-flow model say a share is worth?
A standard cash-flow model puts it at $281 a share — 12% below the $318.92 price it was computed against (27 Oct).
| Model | Value a share | Against the price then |
|---|---|---|
| Standard | $281 | 12% below $318.92 |
| Levered | $191 | 40% below $318.92 |
Discounted cash flow: a model's estimate of what the company is worth today, from the cash it is forecast to make in future years. Small changes in the forecast move it a lot, and it says little about a company that loses money.
Standard / levered: two versions of the cash-flow model: the standard one counts the cash before the company pays its lenders, the levered one after.