The Home Depot, Inc. (HD) Stock Analysis — Fair Value, Risk & Moat Rating
NYQ · Consumer Cyclical · Home Improvement Retail
Is The Home Depot, Inc. a safe investment right now?
The Home Depot, Inc.'s Altman Z-Score of 5.71 places it in the safe zone. Our fair value estimate is $295.57 (Fairly Valued). Moat rating: 3.4/5 stars.
Could The Home Depot, Inc. go bankrupt? Altman Z-Score analysis
Z-Score of 5.71 is above 3.0, indicating the company is financially healthy by this metric.
- Below 1.8 — Distress Zone (high bankruptcy risk)
- 1.8 to 3.0 — Gray Zone (elevated uncertainty)
- Above 3.0 — Safe Zone (financially healthy)
What drives HD's Z-Score?
| Component | Formula | Value | Weight | Contribution |
|---|---|---|---|---|
| A · Working Capital / Total Assets | WC / TA | 0.0187 | 1.2 | 0.02 |
| B · Retained Earnings / Total Assets | RE / TA | 0.8995 | 1.4 | 1.26 |
| C · EBIT / Total Assets | EBIT / TA | 0.2 | 3.3 | 0.66 |
| D · Market Cap / Total Liabilities | MCap / TL | 3.6643 | 0.6 | 2.2 |
| E · Revenue / Total Assets | Rev / TA | 1.567 | 1.0 | 1.57 |
How has HD's financial health changed over time?
| Year | Z-Score | Zone |
|---|---|---|
| 2023 | 7.36 | Safe |
| 2024 | 7.28 | Safe |
| 2025 | 6.01 | Safe |
| 2026 | 5.71 | Safe |
Source: Calculated from HD's latest 10-K filing on SEC EDGAR.
What is The Home Depot, Inc. actually worth?
How we calculated this
| Input | Value | Source |
|---|---|---|
| Predicted EPS (α) | $14.56 | Proprietary blend of reported actuals + analyst consensus, weighted by α |
| Last Year EPS | $14.23 | Annual report (SEC EDGAR) |
| Analyst Consensus EPS (This Year) | $15.05 | 33 analysts consensus |
| Trailing P/E | 23.9x | Current market pricing |
| Fair P/E (β discount) | 20.3x | Trailing PE adjusted by value discount factor β, hard-capped |
| Earnings Trend (γ) | Stable | Directional signal: predicted vs trailing EPS |
Wall Street Reference: Analyst consensus target price is $408.21 (33 analysts). This is shown for reference only and is not used in our valuation model.
Source: Earnings data from SEC EDGAR filings. Market data via Yahoo Finance.
Does The Home Depot, Inc. have a durable competitive advantage?
Moat rating: 3.4/5.
What makes up HD's moat score?
ROIC Stability
ROIC variability over the past decade. Score: 4/5.
Gross Margin Trend
Gross margin trajectory over the past decade. Score: 3/5.
Switching Costs
Estimated customer lock-in based on margin level. Score: 3/5.
How stable is HD's return on invested capital?
| Year | ROIC | Trend |
|---|---|---|
| 2023 | 53.8% | — |
| 2024 | 48.4% | Declining |
| 2025 | 36.2% | Declining |
| 2026 | 30.6% | Declining |
Source: ROIC calculated from SEC EDGAR filings.
Is The Home Depot, Inc.'s dividend safe?
Can The Home Depot, Inc. afford its dividend?
Payout ratio is 64.6%. FCF covers the dividend 1.5x. 40 consecutive years of payments.
The Home Depot, Inc.'s key financial metrics
| Metric | Latest | 1Y Ago | 3Y Ago | Trend |
|---|---|---|---|---|
| Revenue | $164.7B | $159.5B | $157.4B | Stable |
| Net Income | $14.2B | $14.8B | $17.1B | Declining |
| Free Cash Flow | $12.6B | $16.3B | $11.5B | Rising |
| Gross Margin | 33.3% | 33.4% | 33.5% | Stable |
Recent events that affect our HD analysis
HD earnings report scheduled
Upcoming report. Consensus EPS estimate: $3.41. Revenue estimate: $41.54B. Our current Fair Value: $295.57 — a significant beat or miss could shift this estimate.
HD analyst consensus: 61% bullish (22 of 36 analysts)
4 Strong Buy, 18 Buy, 14 Hold, 0 Sell, 0 Strong Sell. Consensus target: $408.21 (20.2% upside). Compare with our independent Fair Value: $295.57.
HD filed annual report (10-K)
Annual filing with full-year financials. Our Altman Z-Score, Moat, and Fair Value models are derived from this data. View on SEC EDGAR →
HD paid $2.3300/share dividend
Dividend Safety Grade: B. Payout ratio: 64.6%.
HD beat EPS estimates by 7.8%
Reported EPS: $2.72 vs estimate $2.52. Earnings strength supports our Fair Value of $295.57 (12.9% below current price).
HD filed 8-K (material event)
8-K filings disclose material events — acquisitions, leadership changes, or guidance revisions that may affect valuation. View on SEC EDGAR →
HD paid $2.3000/share dividend
Dividend Safety Grade: B. Payout ratio: 64.6%.
HD filed quarterly report (10-Q)
Quarterly update with interim financials. May signal changes to earnings trajectory and balance sheet health. View on SEC EDGAR →
HD filed 8-K (material event)
8-K filings disclose material events — acquisitions, leadership changes, or guidance revisions that may affect valuation. View on SEC EDGAR →
HD missed EPS estimates by 2.5%
Reported EPS: $3.74 vs estimate $3.83. Our Fair Value of $295.57 may face downward pressure if the trend continues.
HD filed 8-K (material event)
8-K filings disclose material events — acquisitions, leadership changes, or guidance revisions that may affect valuation. View on SEC EDGAR →
HD filed 8-K (material event)
8-K filings disclose material events — acquisitions, leadership changes, or guidance revisions that may affect valuation. View on SEC EDGAR →
HD filed 8-K (material event)
8-K filings disclose material events — acquisitions, leadership changes, or guidance revisions that may affect valuation. View on SEC EDGAR →
HD filed 8-K (material event)
8-K filings disclose material events — acquisitions, leadership changes, or guidance revisions that may affect valuation. View on SEC EDGAR →
HD paid $2.3000/share dividend
Dividend Safety Grade: B. Payout ratio: 64.6%.
HD filed quarterly report (10-Q)
Quarterly update with interim financials. May signal changes to earnings trajectory and balance sheet health. View on SEC EDGAR →
HD missed EPS estimates by 0.3%
Reported EPS: $4.68 vs estimate $4.69. Our Fair Value of $295.57 may face downward pressure if the trend continues.
HD filed 8-K (material event)
8-K filings disclose material events — acquisitions, leadership changes, or guidance revisions that may affect valuation. View on SEC EDGAR →
HD paid $2.3000/share dividend
Dividend Safety Grade: B. Payout ratio: 64.6%.
HD filed 8-K (material event)
8-K filings disclose material events — acquisitions, leadership changes, or guidance revisions that may affect valuation. View on SEC EDGAR →
HD filed quarterly report (10-Q)
Quarterly update with interim financials. May signal changes to earnings trajectory and balance sheet health. View on SEC EDGAR →
HD missed EPS estimates by 0.8%
Reported EPS: $3.56 vs estimate $3.59. Our Fair Value of $295.57 may face downward pressure if the trend continues.
HD filed 8-K (material event)
8-K filings disclose material events — acquisitions, leadership changes, or guidance revisions that may affect valuation. View on SEC EDGAR →
HD filed 8-K (material event)
8-K filings disclose material events — acquisitions, leadership changes, or guidance revisions that may affect valuation. View on SEC EDGAR →
HD filed annual report (10-K)
Annual filing with full-year financials. Our Altman Z-Score, Moat, and Fair Value models are derived from this data. View on SEC EDGAR →
HD paid $2.3000/share dividend
Dividend Safety Grade: B. Payout ratio: 64.6%.
HD missed EPS estimates by 0.8%
Reported EPS: $3.02 vs estimate $3.04. Our Fair Value of $295.57 may face downward pressure if the trend continues.
HD filed 8-K (material event)
8-K filings disclose material events — acquisitions, leadership changes, or guidance revisions that may affect valuation. View on SEC EDGAR →
Common questions about The Home Depot, Inc.
What is The Home Depot, Inc. stock price today?
The Home Depot, Inc. (HD) stock price is $339.50 as of the latest market close, traded on the NYSE exchange.
What does The Home Depot, Inc. do?
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.
What is The Home Depot, Inc. market cap?
The Home Depot, Inc. has a market capitalization of $338.15B, classifying it as a mega-cap stock in the Consumer Cyclical sector.
What sector and industry is HD in?
The Home Depot, Inc. operates in the Consumer Cyclical sector, specifically within the Home Improvement Retail industry. It trades on the NYSE under the ticker symbol HD.
Is HD stock overvalued or undervalued?
Based on our valuation model, The Home Depot, Inc. trades 14.9% above our fair value estimate — potentially overvalued.
- FairValueLabs Fair Value: $295.57
- Current Price: $339.50
- Valuation Zone: Fairly Valued
What is HD stock forecast and analyst target price?
Based on 33 Wall Street analysts, the consensus price target for The Home Depot, Inc. is $408.21, implying upside of 20.2% from the current price.
- Analyst High Target: $454.00
- Analyst Low Target: $335.00
Note: Analyst targets are shown for reference and are not used in our valuation model.
Is The Home Depot, Inc. revenue and earnings growing?
Here are the analyst consensus growth estimates for The Home Depot, Inc.:
- Revenue growth (current year est.): 4.0%
- EPS growth (current year est.): 2.5%
- Revenue growth (next year est.): 4.1%
- EPS growth (next year est.): 8.3%
What are The Home Depot, Inc.'s key financial metrics?
| Metric | Latest | Trend |
|---|---|---|
| Revenue | $164.7B | Stable |
| Net Income | $14.2B | Declining |
| Free Cash Flow | $12.6B | Rising |
| Gross Margin | 33.3% | Stable |
What is HD's P/E ratio?
The price-to-earnings ratio measures how much investors pay per dollar of earnings:
- Trailing P/E (last 12 months): 23.9x
- Forward P/E (next 12 months est.): 20.8x
- FairValueLabs Fair P/E: 20.3x
How volatile is HD stock?
The Home Depot, Inc. has a beta of 1.08, meaning it is roughly in line with overall market volatility. A beta above 1.0 indicates higher price swings relative to the S&P 500, while below 1.0 suggests more stability.
How much cash and debt does The Home Depot, Inc. have?
The Home Depot, Inc.'s balance sheet shows:
- Total Cash: $1.39B
- Total Debt: $65.91B
- Net Cash Position: $-64.52B
A positive net cash position means the company holds more cash than debt, reducing financial risk.
What is The Home Depot, Inc.'s free cash flow?
The Home Depot, Inc. generated $8.62B in trailing twelve-month free cash flow (from $16.33B in operating cash flow). Free cash flow represents the cash available for dividends, buybacks, and debt reduction after all capital expenditures.
Does The Home Depot, Inc. pay a dividend, and is it safe?
Yes, The Home Depot, Inc. pays a regular dividend. Here are the key metrics:
- Dividend Yield: 2.7%
- Payout Ratio: 64.6%
- Consecutive Years Paid: 40
- 5-Year Dividend Growth: -18.8%
- FairValueLabs Safety Grade: B
Is The Home Depot, Inc. at risk of going bankrupt?
The Home Depot, Inc.'s Altman Z-Score is 5.71, placing it in the safe zone (above 3.0) — bankruptcy risk is low. The Z-Score uses five balance sheet ratios to predict bankruptcy probability within two years.
Does The Home Depot, Inc. have a durable competitive advantage?
The Home Depot, Inc. scores 3.4/5 stars (Narrow moat) in our moat analysis:
- ROIC Stability: 4/5
- Gross Margin Trend: 3/5
- Switching Costs: 3/5
A score above 3.5 suggests meaningful pricing power and a defensible market position.
What is HD's return on equity (ROE)?
The Home Depot, Inc.'s return on equity is 145.5%. ROE measures how efficiently a company generates profits from shareholder equity. An ROE above 15% is generally considered strong, while below 10% may signal inefficiency.
How do I buy HD stock?
HD shares can be purchased through any brokerage account that provides access to the NYSE. Common steps:
- Open an account with a broker (e.g., Fidelity, Schwab, Interactive Brokers)
- Search for ticker symbol HD
- Place a market or limit order for your desired number of shares
This is not investment advice. Always do your own research before buying any stock.
Is HD a value stock or speculative?
FairValueLabs classifies The Home Depot, Inc. as Value Investment. It exhibits consistent profitability, reasonable valuation, and financial stability — characteristics of a traditional value investment.
Who is the CEO of The Home Depot, Inc.?
The current CEO of The Home Depot, Inc. is Mr. Edward P. Decker.
What is HD's earnings per share (EPS)?
Earnings per share measures the company's profit allocated to each outstanding share:
- Trailing EPS (last 12 months): $14.23
- Forward EPS (next 12 months est.): $16.30
- Analyst consensus EPS (this year): $15.05
- Analyst consensus EPS (next year): $16.30
Other Consumer Cyclical companies analyzed by FairValueLabs
FairValueLabs Disclaimer
All valuations, scores, ratings, and classifications on this page are produced by the FairValueLabs internal valuation system. They do not represent actual market value, guaranteed outcomes, or professional investment advice. These are analytical estimates for educational and research purposes only.
This is not financial advice. All data is sourced from SEC EDGAR public filings. Always consult a qualified financial advisor before making investment decisions.
Last updated: Apr 22, 2026. Data sources: SEC EDGAR (financial statements), Yahoo Finance (market data, analyst consensus). Data may not reflect the most recent quarter.
HD analysis methodology: How we calculate fair value, Z-Scores, and moat ratings