Home Depot logged a -3.6% change during today's evening session, and is now trading at a price of $338.32 per share.
Home Depot returned gains of 11.8% last year, with its stock price reaching a high of $396.87 and a low of $274.26. Over the same period, the stock underperformed the S&P 500 index by -12.6%. The company's 50-day average price was $337.93. The Home Depot, Inc. operates as a home improvement retailer in the United States and internationally. Based in Atlanta, GA, the Large-Cap Consumer Discretionary company has 465,000 full time employees. Home Depot has offered a 2.5% dividend yield over the last 12 months.
Growing Revenues but Significant Leverage Levels:
| 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | |
|---|---|---|---|---|---|---|
| Revenue (M) | $108,203 | $110,225 | $132,110 | $151,157 | $157,403 | $152,669 |
| Gross Margins | 34% | 34% | 34% | 34% | 34% | 33% |
| Net Margins | 10% | 10% | 10% | 11% | 11% | 10% |
| Net Income (M) | $11,121 | $11,242 | $12,866 | $16,433 | $17,105 | $15,143 |
| Net Interest Expense (M) | $1,051 | $1,201 | $1,347 | $1,347 | $1,617 | $1,943 |
| Depreciation & Amort. (M) | $1,870 | $1,989 | $2,128 | $2,386 | $2,455 | $2,673 |
| Diluted Shares (M) | 1,094 | 1,078 | 1,053 | 1,023 | 9,990 | 992 |
| Earnings Per Share | $9.73 | $10.25 | $11.94 | $15.53 | $16.69 | $15.11 |
| EPS Growth | n/a | 5.34% | 16.49% | 30.07% | 7.47% | -9.47% |
| Avg. Price | $167.05 | $188.11 | $231.67 | $310.74 | $308.79 | $338.32 |
| P/E Ratio | 17.08 | 18.28 | 19.34 | 19.93 | 18.45 | 22.32 |
| Free Cash Flow (M) | $10,723 | $11,009 | $16,376 | $14,005 | $11,496 | $17,946 |
| CAPEX (M) | $2,442 | $2,678 | $2,463 | $2,566 | $3,119 | $3,226 |
| EV / EBITDA | 13.54 | 13.96 | 15.53 | 15.61 | 14.87 | 17.07 |
| Total Debt (M) | $53,404 | $61,501 | $72,534 | $78,344 | $82,529 | $84,803 |
| Net Debt / EBITDA | 2.94 | 2.63 | 3.31 | 2.98 | 3.04 | 3.31 |
| Current Ratio | 1.08 | 1.36 | 1.13 | 1.39 | 1.3 | 1.34 |
Home Depot has growing revenues and increasing reinvestment in the business, generally positive cash flows, and positive EPS growth. Furthermore, Home Depot has similar gross margins to its peers, just enough current assets to cover current liabilities, as shown by its current ratio of 1.34, and significant leverage levels.
Home Depot's Valuation Is in Line With Its Sector Averages:
Home Depot has a trailing twelve month P/E ratio of 22.7, compared to an average of 22.06 for the Consumer Discretionary sector. Based on its EPS guidance of $16.21, the company has a forward P/E ratio of 20.8. The 7.6% compound average growth rate of Home Depot's historical and projected earnings per share yields a PEG ratio of 3.0. This suggests that these shares are overvalued. Furthermore, Home Depot is likely overvalued compared to the book value of its equity, since its P/B ratio of 184.37 is higher than the sector average of 3.18. The company's shares are currently trading 1254.9% below their Graham number. Ultimately, Home Depot's strong cash flows, decent earnings multiple, and healthy debt levels factor towards it being fairly valued, its elevated P/B ratio notwithstanding.
Home Depot Has an Average Rating of Buy:
The 31 analysts following Home Depot have set target prices ranging from $300.0 to $425.0 per share, for an average of $382.01 with a buy rating. The company is trading -11.4% away from its average target price, indicating that there is an analyst consensus of some upside potential.
Home Depot has a very low short interest because 0.9% of the company's shares are sold short. Institutions own 72.7% of the company's shares, and the insider ownership rate stands at 0.06%, suggesting a small amount of insider investors. The largest shareholder is Vanguard Group Inc, whose 9% stake in the company is worth $31,788,308,019.
