The Home Depot, Inc. HD
Home Depot's revenue growth of 3.24% in FY2025 and improving institutional sentiment (smart money score rising from -0.30 in Q4 2025 to 0.27 as of Q2 2026, with BlackRock's reported 8.18% stake) suggest the business is stabilizing, but three consecutive years of earnings decline — net income falling from $17.1B in FY2022 to $14.2B in FY2025 with operating margin compressing from 15.27% to 12.68% — and a valuation premium of 23.6x earnings versus 18.3x at direct competitor Lowe's argue against adding exposure. The stock trades below both its 50-day ($340.31) and 200-day ($345.81) moving averages with a negative MACD histogram, while $65.35B in total debt against $12.81B in equity constrains financial flexibility.
Hold pending evidence that margin compression has bottomed.
What could go wrong
- Margin compression persists. Operating margin has declined for three straight years from 15.27% (FY2022) to 12.68% (FY2025); if SRS integration costs or competitive pressures continue, the earnings recovery thesis breaks.
- Valuation premium to Lowe's. HD trades at 23.6x earnings versus 18.3x at LOW despite a weaker margin profile, leaving the stock vulnerable to derating if growth disappoints.
- High leverage. Total debt of $65.35B against $12.81B in stockholders' equity limits flexibility for buybacks or incremental investment if conditions deteriorate.
- Soft consumer backdrop. July retail sales data cited in recent news declined 0.6% month-over-month, and a 'frozen' housing market suppresses big-ticket discretionary home improvement demand.
What would change my mind
Where this comes from: derived_metrics FY2025 · fundamentals FY2022 and FY2025 · derived_metrics FY2022 and FY2025 · smart_money time series. Orin's read on HD; not advice.
Twelve months actual closes to 2026-09-23 · actual filings
50-day average 200-day average · volume below
On file
All HD filingsLargest holders · 13F Q2 2026
Money flow| Filer | Position | Of fund |
|---|---|---|
| Vanguard Capital Management | $23.0B | 0.5% of fund |
| State Street | $16.6B | 0.5% of fund |
| Vanguard Portfolio Management | $9.1B | 0.4% of fund |
| Geode Capital Management | $8.9B | 0.5% of fund |
| Morgan Stanley | $8.0B | 0.4% of fund |
| Charles Schwab Investment Management | $7.1B | 1.0% of fund |
180 filers · quarter ended Q2 2026 · positions, not flows
Insiders, last 24 months: 190 Form 4 filings, net −$7.4M. 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 →Where it trades
| Metric | Now | Own median | Sector |
|---|---|---|---|
| P/E | 20.7× | 23.5× | 79.6× |
| EV/EBITDA | 14.9× | 16.6× | — |
| P/S | 1.75× | 2.33× | — |
| P/B | 17.7× | — | — |
Its P/E sits 20th percentile of its own last 5 years (−1.07σ from its own mean).
9.8%
free-cash-flow growth every year for 10 years, discounted at 10%, is what today’s price implies — starting from $12.6B of trailing free cash flow. It is an assumption the market is making, not a forecast Orin is making.
What Wall Street published
$379
$340 – $425 · +28% against today's price
- 37 buy or overweight
- 22 hold
- 4 underweight or sell
The analysts’ consensus and their own ratings, not Orin’s. A target is a twelve-month opinion published by the firm that wrote it.
Against the companies it is compared to
| Company | Market cap | P/E | EV/EBITDA | Gross | Net | ROE |
|---|---|---|---|---|---|---|
| HDThe Home Depot, Inc. | $296B | 20.7× | 14.9× | 33.2% | 8.4% | 103% |
| BKNGBooking Holdings Inc. | $121B | 17.2× | 11.5× | 100.0% | 25.5% | -97% |
| LOWLowe's Companies, Inc. | $107B | 16.2× | 12.0× | 33.1% | 7.3% | -72% |
| MCDMcDonald's Corporation | $169B | 19.3× | 14.8× | 57.4% | 31.7% | -561% |
The median is of the 3 peers listed above and nothing else — check it against the column. This company trades 20.5% above it. The peer set is the vendor’s, so a company can appear here that a person would not have chosen.
What it has traded at
What its sector has traded at
Two scales, drawn separately on purpose: a sector median and one company’s multiple are not the same number and putting them on one axis invites a comparison neither series supports.
Discounted cash flow
| Model | Fair value | Against | Computed |
|---|---|---|---|
| Standard DCF | $293 | $320.96 · −9% | 2026-06-10 |
| Levered DCF | $225 | $320.96 · −30% | 2026-06-10 |
The vendor’s intrinsic-value models. Treat them as a low-growth anchor — for a fast grower the market routinely pays well above a DCF. These were computed against the price in the “against” column, not today’s.
Every estimate on one scale
The vertical rule is the current price. Ranges and point estimates are the backend’s, published as they were calculated; an arrow means the estimate sits beyond this scale, and its number is on the right.