olivLaw · US equity research
The Home Depot, Inc. HD
Retail-Lumber & Other Building Materials Dealers · SIC 5211 · Vertical: Building materials and hardware retail (SIC 52xx)
The Home Depot is the world's largest home improvement retailer, with net sales of $164.7 billion in fiscal 2025. In the second quarter of fiscal 2026, net sales were $47.9 billion and comparable sales rose 1.7%. The company reaffirmed its fiscal 2026 guidance, which could support the outlook if demand for smaller projects holds.
At the close of 04 Nov 2026, The Home Depot, Inc. (HD) stock was 355.44 USD (+6.53% on the day), with market capitalisation 354.6 bn USD, P/E 24.9 on diluted EPS of 14.29 USD over the last 12 months, dividend yield 2.61%, beta 0.65, 52-week range 281.15–391.05 USD. Latest reported quarter (Q2 2027): revenue of 47.9 bn USD (+5.7% YoY), net income of 4.8 bn USD (+4.7% YoY), diluted EPS 4.79 USD.
Data as of · AI analysis dated · Source: SEC filings and closing prices, computed by olivLaw.
Price history
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Technical reading
- RSI (14)
- 74.4
- overbought (≥ 70)
- Bollinger (20, 2)
- 281.77 – 349.70
- above the upper band · %B 1.08 · band width 21.5%
- SMA 50 / 200
- 308.79 / 333.78
- mixed trend
- MACD (12, 26, 9)
- 10.24 / 6.08
- MACD above signal
Indicators describe past prices; on their own they do not predict direction. On our history the RSI ≤ 40 filter added no return (see the signals methodology).
Performance
| Company | S&P 500 | vs S&P 500 | Vertical median | |
|---|---|---|---|---|
| 1 month | +26.4% | −1.1% | +27.5 pp | — |
| 3 months | +0.7% | −0.5% | +1.1 pp | — |
| 6 months | +10.0% | +4.4% | +5.6 pp | — |
| Year to date | +3.3% | +12.3% | −9.0 pp | — |
| 1 year | −7.2% | +13.5% | −20.8 pp | −10.7% |
| 3 years | +20.2% | +76.4% | −56.2 pp | −40.9% |
| 5 years | −3.5% | +63.7% | −67.2 pp | — |
Price returns, dividends excluded.
Quarterly results
Latest quarter: Q2 2027 · 02 Aug 2026
Quarterly margins
Quarterly statements · USD
| Fiscal year | Q3 '25 | Q4 '25 | Q1 '26 | Q2 '26 | Q3 '26 | Q4 '26 | Q1 '27 | Q2 '27 |
|---|---|---|---|---|---|---|---|---|
| Revenue | 40.2 bn | 39.7 bn | 39.9 bn | 45.3 bn | 41.4 bn | 38.2 bn | 41.8 bn | 47.9 bn |
| Cost of revenue | 26.8 bn | 26.7 bn | 26.4 bn | 30.2 bn | 27.5 bn | 25.7 bn | 28.0 bn | 31.7 bn |
| Gross profit | 13.4 bn | 13.0 bn | 13.5 bn | 15.1 bn | 13.8 bn | 12.5 bn | 13.8 bn | 16.1 bn |
| SG&A | 7.2 bn | 7.7 bn | 7.5 bn | 7.8 bn | 7.6 bn | 7.8 bn | 8.0 bn | 8.4 bn |
| Operating income | 5.4 bn | 4.5 bn | 5.1 bn | 6.6 bn | 5.4 bn | 3.8 bn | 5.0 bn | 6.8 bn |
| Depreciation & amortisation | 795.0 m | 864.0 m | 855.0 m | 806.0 m | 826.0 m | 908.0 m | 910.0 m | 852.0 m |
| Interest expense | 625.0 m | 638.0 m | 615.0 m | 575.0 m | 628.0 m | 594.0 m | 611.0 m | 583.0 m |
| Pre-tax income | 4.8 bn | 3.9 bn | 4.5 bn | 6.0 bn | 4.8 bn | 3.3 bn | 4.4 bn | 6.3 bn |
| Income tax | 1.2 bn | 890.0 m | 1.1 bn | 1.5 bn | 1.2 bn | 727.0 m | 1.1 bn | 1.5 bn |
| Net income | 3.6 bn | 3.0 bn | 3.4 bn | 4.6 bn | 3.6 bn | 2.6 bn | 3.3 bn | 4.8 bn |
| Diluted EPS | 3.67 | 3.01 ≈ | 3.45 | 4.58 | 3.62 | 2.58 ≈ | 3.30 | 4.79 |
| Operating cash flow | 4.2 bn ≈ | 4.7 bn | 4.3 bn | 4.6 bn ≈ | 4.0 bn ≈ | 3.3 bn | 6.0 bn | 5.4 bn ≈ |
| Capex | 818.0 m ≈ | 1.1 bn | 806.0 m | 917.0 m ≈ | 898.0 m ≈ | 1.1 bn | 844.0 m | 880.0 m ≈ |
| Dividends paid | 2.2 bn ≈ | 2.2 bn | 2.3 bn | 2.3 bn ≈ | 2.3 bn ≈ | 2.3 bn | 2.3 bn | 2.3 bn ≈ |
| Share repurchases | 0 ≈ | 0 | 0 | 0 ≈ | 0 ≈ | 0 | — | — |
≈ derived quarter (cumulative difference / share-days average)
E/P over time
E/P = trailing-12-month diluted EPS / price at quarter end. E/P is the inverse of P/E and stays defined when earnings are negative.
Today's P/E sits at the 86 percentile of its own 43-quarter history (min 17.7, median 23.1, max 28.5; quarters with earnings only).
Fiscal years
| Fiscal year | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 | 2026 |
|---|---|---|---|---|---|---|---|---|
| Revenue | 108.2 bn | 110.2 bn | 132.1 bn | 151.2 bn | 157.4 bn | 152.7 bn | 159.5 bn | 164.7 bn |
| Revenue YoY | +7.2% | +1.9% | +19.9% | +14.4% | +4.1% | −3.0% | +4.5% | +3.2% |
| Net income | 11.1 bn | 11.2 bn | 12.9 bn | 16.4 bn | 17.1 bn | 15.1 bn | 14.8 bn | 14.2 bn |
| Net income YoY | +28.9% | +1.1% | +14.4% | +27.7% | +4.1% | −11.5% | −2.2% | −4.4% |
| Diluted EPS | 9.73 | 10.25 | 11.94 | 15.53 | 16.69 | 15.11 | 14.91 | 14.23 |
| Diluted EPS YoY | +33.5% | +5.3% | +16.5% | +30.1% | +7.5% | −9.5% | −1.3% | −4.6% |
| net % | 10.3% | 10.2% | 9.7% | 10.9% | 10.9% | 9.9% | 9.3% | 8.6% |
| Free cash flow | 10.7 bn | 11.0 bn | 16.4 bn | 14.0 bn | 11.5 bn | 17.9 bn | 16.3 bn | 12.6 bn |
Reported results vs expectations
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Balance sheet & financial health
Fiscal year 2026 · 01 Feb 2026
- Cash
- 1.4 bn USD
- Financial debt
- 54.4 bn USD
- Net debt
- 53.0 bn USD
- Equity
- 12.8 bn USD
- Total assets
- 105.1 bn USD
- Debt / equity
- 4.24x
- Current ratio
- 1.06x
- ROE
- 145.5%
- ROA
- 14.1%
- FCF margin
- 7.7%
Financial statements (source on every figure)
Revenue and net income (USD)
Margins
Income statement · USD
| Line | 2021 | 2022 | 2023 | 2024 | 2025 | 2026 | Source (latest year) |
|---|---|---|---|---|---|---|---|
| Revenue | 132.1 bn | 151.2 bn | 157.4 bn | 152.7 bn | 159.5 bn | 164.7 bn | SEC (XBRL)· 18 Mar 2026verified |
| Cost of revenue | 87.3 bn | 100.3 bn | 104.6 bn | 101.7 bn | 106.2 bn | 109.8 bn | SEC (XBRL)· 18 Mar 2026verified |
| Gross profit | 44.9 bn | 50.8 bn | 52.8 bn | 51.0 bn | 53.3 bn | 54.9 bn | SEC (XBRL)· 18 Mar 2026verified |
| SG&A | 24.4 bn | 25.4 bn | 26.3 bn | 26.6 bn | 28.7 bn | 30.7 bn | SEC (XBRL)· 18 Mar 2026verified |
| Operating income | 18.3 bn | 23.0 bn | 24.0 bn | 21.7 bn | 21.5 bn | 20.9 bn | SEC (XBRL)· 18 Mar 2026verified |
| Depreciation & amortisation | 2.5 bn | 2.9 bn | 2.8 bn | 3.1 bn | 3.3 bn | 3.5 bn | SEC (XBRL)· 18 Mar 2026verified |
| EBITDA | 20.8 bn ≈ | 25.9 bn ≈ | 26.8 bn ≈ | 24.8 bn ≈ | 24.9 bn ≈ | 24.4 bn ≈ | SEC (XBRL)· 18 Mar 2026derived |
| Interest expense | 1.3 bn | 1.3 bn | 1.6 bn | 1.9 bn | 2.3 bn | 2.4 bn | SEC (XBRL)· 18 Mar 2026verified |
| Pre-tax income | 17.0 bn | 21.7 bn | 22.5 bn | 19.9 bn | 19.4 bn | 18.6 bn | SEC (XBRL)· 18 Mar 2026verified |
| Income tax | 4.1 bn | 5.3 bn | 5.4 bn | 4.8 bn | 4.6 bn | 4.4 bn | SEC (XBRL)· 18 Mar 2026verified |
| Net income | 12.9 bn | 16.4 bn | 17.1 bn | 15.1 bn | 14.8 bn | 14.2 bn | SEC (XBRL)· 18 Mar 2026verified |
| Diluted EPS | 11.94 | 15.53 | 16.69 | 15.11 | 14.91 | 14.23 | SEC (XBRL)· 18 Mar 2026verified |
| Weighted average diluted shares | 1.1 bn | 1.1 bn | 1.0 bn | 1.0 bn | 993.0 m | 995.0 m | SEC (XBRL)· 18 Mar 2026verified |
| Dividend per share | 6.00 | 6.60 | 7.60 | 8.36 | 9.00 | 9.20 | SEC (XBRL)· 18 Mar 2026verified |
≈ computed by olivLaw from the reported lines of the same year: Operating income + Depreciation & amortisation.
Balance sheet · USD
| Line | 2021 | 2022 | 2023 | 2024 | 2025 | 2026 | Source (latest year) |
|---|---|---|---|---|---|---|---|
| Cash | 7.9 bn | 2.3 bn | 2.8 bn | 3.8 bn | 1.7 bn | 1.4 bn | SEC (XBRL)· 18 Mar 2026verified |
| Receivables | 3.0 bn | 3.4 bn | 3.3 bn | 3.3 bn | 4.9 bn | 5.6 bn | SEC (XBRL)· 18 Mar 2026verified |
| Inventories | 16.6 bn | 22.1 bn | 24.9 bn | 21.0 bn | 23.5 bn | 25.8 bn | SEC (XBRL)· 18 Mar 2026verified |
| Current assets | 28.5 bn | 29.1 bn | 32.5 bn | 29.8 bn | 31.7 bn | 34.4 bn | SEC (XBRL)· 18 Mar 2026verified |
| Property, plant & equipment, net | 24.7 bn | 25.2 bn | 25.6 bn | 26.2 bn | 26.7 bn | — | SEC (XBRL)· 21 Mar 2025verified |
| Goodwill | 7.1 bn | 7.4 bn | 7.4 bn | 8.5 bn | 19.5 bn | 22.3 bn | SEC (XBRL)· 18 Mar 2026verified |
| Intangibles (excl. goodwill) | — | 3.5 bn | 3.3 bn | 3.6 bn | 9.0 bn | 10.3 bn | SEC (XBRL)· 18 Mar 2026verified |
| Total assets | 70.6 bn | 71.9 bn | 76.4 bn | 76.5 bn | 96.1 bn | 105.1 bn | SEC (XBRL)· 18 Mar 2026verified |
| Accounts payable | 11.6 bn | 13.5 bn | 11.4 bn | 10.0 bn | 11.9 bn | 11.5 bn | SEC (XBRL)· 18 Mar 2026verified |
| Short-term debt | 1.4 bn | 2.4 bn | 1.2 bn | 0 | 4.6 bn | 5.0 bn | SEC (XBRL)· 18 Mar 2026verified |
| Long-term debt | 34.8 bn | 36.4 bn | 41.2 bn | 42.2 bn | 51.4 bn | 49.4 bn | SEC (XBRL)· 18 Mar 2026verified |
| Current liabilities | 23.2 bn | 28.7 bn | 23.1 bn | 22.0 bn | 28.7 bn | 32.4 bn | SEC (XBRL)· 18 Mar 2026verified |
| Total liabilities | 67.3 bn | 73.6 bn | 74.9 bn | 75.5 bn | 89.5 bn | 92.3 bn | SEC (XBRL)· 18 Mar 2026verified |
| Equity | 3.3 bn † | -1.7 bn † | 1.6 bn † | 1.0 bn † | 6.6 bn † | 12.8 bn † | SEC (XBRL)· 18 Mar 2026verified |
† equity attributable to the parent's shareholders: in these years the issuer no longer reports the total including non-controlling interests.
Cash flow · USD
| Line | 2021 | 2022 | 2023 | 2024 | 2025 | 2026 | Source (latest year) |
|---|---|---|---|---|---|---|---|
| Operating cash flow | 18.8 bn | 16.6 bn | 14.6 bn | 21.2 bn | 19.8 bn | 16.3 bn | SEC (XBRL)· 18 Mar 2026verified |
| Capex | 2.5 bn | 2.6 bn | 3.1 bn | 3.2 bn | 3.5 bn | 3.7 bn | SEC (XBRL)· 18 Mar 2026verified |
| Free cash flow | 16.4 bn ≈ | 14.0 bn ≈ | 11.5 bn ≈ | 17.9 bn ≈ | 16.3 bn ≈ | 12.6 bn ≈ | SEC (XBRL)· 18 Mar 2026derived |
| Investing cash flow | -10.2 bn | -3.0 bn | -3.1 bn | -4.7 bn | -21.0 bn | -9.0 bn | SEC (XBRL)· 18 Mar 2026verified |
| Financing cash flow | -3.0 bn | -19.1 bn | -11.0 bn | -15.4 bn | -694.0 m | -7.7 bn | SEC (XBRL)· 18 Mar 2026verified |
| Dividends paid | 6.5 bn | 7.0 bn | 7.8 bn | 8.4 bn | 8.9 bn | 9.2 bn | SEC (XBRL)· 18 Mar 2026verified |
| Share repurchases | 791.0 m | 14.8 bn | 6.7 bn | 8.0 bn | 649.0 m | 0 | SEC (XBRL)· 18 Mar 2026verified |
≈ computed by olivLaw from the reported lines of the same year: Operating cash flow − Capex.
Computed indicators
Growth
Profitability
Returns
Balance sheet
Liquidity
Cash
Efficiency
Market and valuation
1 indicators that do not apply to the sector.
Valuation
olivLaw classification
Score: 49 / 100
A scoring methodology on indicators and valuation, not investment advice.
(margin_of_safety <= -0.25 & agreement in ['high', 'medium'])
Closing price
04 Nov 2026Source: olivLaw, closing series
Market cap: 354.6 bn USD
Key indicators
Coverage and freshness
Score by group
- Valuation40
- Returns56
- Quality92
- Balance sheet45
- Growth6
Estimated value range
The combined range = the median of the valid methods' low, central and high values; it is not a probability interval and does not cover every result. Envelope of all methods: 120.90 – 477.50 USD.
Valuation assumptions are editorial choices, not measured; beta is not measured.
Method ranges (USD per share)
— — Mid · ▏ Price
Valuation methods
- DCF (discounted cash flow)207.26 – 316.45 (Mid 249.80)WACC 9.2% · starting FCFF 16.9 bn USD · terminal value share of EV 73%The WACC × g sensitivity gives the method's bounds; these are not probabilities.Reverse DCF: starting growth implied by the price (fading linearly to terminal growth, everything else fixed): 17.5%
- Peers: EV/EBITDA226.45 – 253.81 (Mid 240.96)4 companies used · median multiple 9.9x · quartiles 9.3x – 10.4xBLDR, FND, LOW, TSCO
- Peers: P/E276.87 – 477.50 (Mid 341.75)5 companies used · median multiple 23.9x · quartiles 19.4x – 33.4xFAST, FND, LOW, SHW, TSCO
- Dividend discount (DDM)120.90 – 162.59 (Mid 138.68)
Classification (SIC) comparables group by industry code, not by economic activity; the direct group is an editorial selection by activity. Members' multiples are on their own trailing twelve months, at their own latest close.
Assumptions (illustrative, editorial)
- Risk-free rate
- 4.3%
- Equity risk premium
- 5.0%
- Beta (default)
- 1.00
- Cost of equity
- 9.3%
- Terminal growth
- 2.5%
Factor scorecard
Unattractive profile · Score 49/100
| Factor | Value | Score | Weight used |
|---|---|---|---|
| ROIC · Quality | 95.3% | 100 (vs peers) | 10% |
| Net margin · Quality | 8.4% | 70 (vs peers) | 6% |
| FCF conversion · Quality | 106.1% | 100 (on a fixed band) | 6% |
| Revenue CAGR 3Y · Growth | 1.5% | 13 (on a fixed band) | 8% |
| EPS CAGR 3Y · Growth | -5.2% | 0 (on a fixed band) | 8% |
| Net debt / EBITDA · Balance sheet | 0.1x | 20 (vs peers) | 10% |
| Interest coverage · Balance sheet | 8.7x | 100 (on a fixed band) | 6% |
| Current ratio · Balance sheet | 1.1x | 23 (on a fixed band) | 4% |
| P/E (TTM) · Valuation | 24.9x | 50 (vs peers) | 10% |
| EV/EBITDA · Valuation | 14.6x | 20 (vs peers) | 10% |
| FCF yield · Valuation | 4.3% | 53 (on a fixed band) | 8% |
| Shareholder yield (distributions) · Returns | 2.6% | 37 (on a fixed band) | 6% |
| Payout ratio (FCF) · Returns | 61.1% | 84 (on a fixed band) | 4% |
Score groups
- Balance sheet45/100 · 3/3 factors with a value
- Growth6/100 · 2/2 factors with a value
- Quality92/100 · 3/3 factors with a value
- Returns56/100 · 2/2 factors with a value
- Valuation40/100 · 3/3 factors with a value
Memo
The Home Depot, Inc. (HD). Latest full fiscal year: 2026; data up to 2026-08-02.
Figures computed from the financial statements: revenue 164.7 bn USD in 2026; YoY growth 3.2%; net margin 8.4%; ROE 104.3%; net debt/EBITDA 0.1x.
The estimated value range is 216.86–285.13 USD per share (median of 4 methods, agreement: medium); assumptions are illustrative. Against the central value of 245.38 USD, the price of 355.44 USD leaves a potential of -31.0% (value / price − 1) and a margin of safety of -44.9% (1 − price / value). The range is the median of the methods' low, central and high values, not a probability interval.
olivLaw score 49/100, methodological classification: unattractive profile (score, margin of safety and method agreement together; not a judgement of the right price). Not investment advice.
Text generated deterministically from the figures shown; no language model. Not investment advice.
What supports the thesis
- ROIC: 95.3%
- Net margin: 8.4%
- FCF conversion: 106.1%
- Interest coverage: 8.7x
- Payout ratio (FCF): 61.1%
What contradicts it
- Revenue CAGR 3Y: 1.5%
- EPS CAGR 3Y: -5.2%
- Net debt / EBITDA: 0.1x
- Current ratio: 1.1x
- EV/EBITDA: 14.6x
- The price is above the estimated value range
Versus the vertical median
Building materials and hardware retail (SIC 52xx) · same major group (2-digit SIC) · compared with 10 companies
The size band was not applied: too few companies would have remained; the vertical includes much smaller or larger companies.
Multiples and returns vs the median
Price rebased to 100 (monthly, 5 years)
Companies in the vertical
| Market cap | P/E | ROE | Net margin | Revenue YoY | 1A / 3A | |
|---|---|---|---|---|---|---|
| HDThe Home Depot, Inc. | 354.6 bn | 24.9 | 104.3% | 8.4% | +3.2% | −7% / +20% |
| LOWLowes Companies Inc | 128.7 bn | 19.4 | — | 7.3% | +3.1% | −5% / +15% |
| SHWThe Sherwin-Williams Company | 87.8 bn | 33.4 | 63.7% | 10.7% | +2.1% | +6% / +30% |
| FASTFastenal Co | 61.0 bn | 43.1 | 35.3% | 15.6% | +8.7% | +32% / +77% |
| TSCOTractor Supply Co | 19.1 bn | 10.3 | 73.4% | 11.9% | +4.3% | −33% / −10% |
| BLDRBuilders Firstsource, Inc. | 7.5 bn | 185.9 | 1.0% | 0.3% | −7.4% | −38% / −48% |
| FNDFloor & Decor Holdings, Inc. | 5.6 bn | 23.9 | 9.9% | 5.1% | +5.1% | −16% / −42% |
| GRWGGrowgeneration Corp. | 89.6 m | — | -17.1% | -10.1% | −14.4% | −2% / −43% |
| JCTCJewett-Cameron Trading Company Ltd. | 10.1 m | — | -43.7% | -20.9% | −12.4% | +17% / −41% |
| IPWiPower Inc. | 1.9 m | — | -66.0% | -58.2% | −68.4% | −100% / −100% |
| ZKHZKH Group Limited | — | — | -4.6% | -1.6% | +2.6% | −59% / unavailable |
1- and 3-year price returns: for HD from daily closes (the same as the performance table), for the other companies from month-end closes.
olivLaw engine forecast
The world engine ran after the company's latest material disclosure. Probabilities are of TOUCHING a level within the horizon (not closing there) and sit next to the random walk (p_rw), the no-information benchmark.
The engine has no published run for this company yet.
Valuation scenarios (editable assumptions)
Illustrative scenarios
Illustrative: not forecasts and without probabilities. Each case is one coherent set of assumptions, computed on today's figures.
Estimated price (USD)
| Estimated price | Bear | Base | Bull |
|---|---|---|---|
| 1 years | 203.43 Total return -41% · Per year -41% | 360.18 Total return 4% · Per year 4% | 543.25 Total return 56% · Per year 56% |
| 3 years | 185.78 Total return -42% · Per year -17% | 371.20 Total return 12% · Per year 4% | 616.38 Total return 84% · Per year 22% |
| 5 years | 169.65 Total return -43% · Per year -11% | 382.56 Total return 21% · Per year 4% | 699.36 Total return 115% · Per year 17% |
- Exit P/E± 92.80
- Net margin± 64.96
- Annual revenue growth± 54.89
- Annual dilution± 5.46
AI analysis
AI-generatedAI-generated analysis (Claude) from cited public sources; it may contain errors. Not investment advice. As of 27 Oct 2026 · Model: claude-haiku-5-5.
In brief
The Home Depot is the world's largest home improvement retailer, with net sales of $164.7 billion in fiscal 2025 1. In the second quarter of fiscal 2026, net sales were $47.9 billion and comparable sales rose 1.7% 23. The company reaffirmed its fiscal 2026 guidance, which could support the outlook if demand for smaller projects holds 3.
SWOT
Strengths
Weaknesses
- Selling, general and administrative expenses have at times grown faster than comparable sales, compressing operating margins 12.
- The store base is ageing and requires continuing investment to support the customer experience 1.
- Comparable sales have been affected by fewer customer transactions, even as average ticket has risen 12.
Opportunities
- Integrating GMS and expanding SRS could strengthen the company's position as a multi-category distributor for professionals 12.
- Growth in online sales and faster delivery could attract customers who shop across channels 12.
- Resuming share repurchases and reducing debt could reshape capital allocation if conditions allow 1.
Risks
- Brand and reputationmedium
Negative incidents, adverse publicity or supplier actions could erode customer and partner trust 1.
- Intense competitionhigh
Competitive pressures could affect prices, margins and market share if the company does not respond quickly 1.
- Changing customer behaviourmedium
If customers shift further toward online orders with direct fulfilment, store traffic could fall and reduce cross-selling 1.
- Execution of interconnected initiativesmedium
Investments in stores, technology and the supply chain might not deliver the anticipated benefits or might be delayed 1.
- Trade policy and costshigh
Tariffs and input costs could be reimposed, and the uncertainty around them could affect results and cash flows 12.
Investment thesis
What would need to be true (bull case)
- If demand for maintenance and repair projects strengthens and growth from SRS and GMS continues, the company could outpace the market 12.
- Tariff refunds and cost control could support margins if energy and fuel pressures ease 23.
- Brand strength, scale and the distribution network could consolidate market share, especially if the interconnected experience improves customer loyalty 1.
What would break the thesis
- If consumer uncertainty and housing affordability pressure persist, demand for large projects could stay weak and limit comparable sales growth 12.
- If fuel, energy and input costs rise faster than they can be offset, gross margin could come under pressure 23.
- If return on invested capital keeps declining because of higher capital and debt, shareholder returns could be affected 12.
What to watch
- Delivery of fiscal 2026 guidance for total sales and comparable salesQ3 2026
- Gross margin trend and the effect of IEEPA tariff refundsQ3 2026
- GMS and SRS contribution to net salesQ3 2026
Products, market & competition
AI-generatedAI-generated analysis (Claude) from cited public sources; it may contain errors. Not investment advice. As of 27 Oct 2026 · Model: claude-haiku-5-5.
The business
The company operated 2,359 stores across the U.S., Canada and Mexico at the end of fiscal 2025 and offers home improvement products, building materials, lawn and garden, décor and MRO products in stores and online 1. Online sales represented 15.9% of net sales in fiscal 2025 1. The strategy centres on DIY customers, DIFM customers and professional Pros, with capital expenditures of $3.7 billion in fiscal 2025 supporting growth and the interconnected experience 1.
The company expanded its professional segment through the SRS acquisition in fiscal 2024 and the GMS acquisition completed on September 4, 2025, which added specialty products such as drywall, ceilings and steel framing 1. Segment reporting is aggregated, so SRS and GMS are treated as non-reportable operating segments 1. Operating cash flow of $16.3 billion in fiscal 2025 funded dividends, debt repayment and investment 1.
Segments
Primary segment (U.S., Canada, Mexico)
The primary segment aggregates the U.S., Canada and Mexico operations, including Home Depot stores, websites and distribution network, as well as MRO products supplied through HD Supply 1. Comparable sales in this segment in fiscal 2025 were supported by storage and organization, electrical and bath departments 1.
SRS (including GMS)
SRS distributes roofing, landscape and pool products and, after the GMS acquisition, interior building products such as wallboard and ceilings, with over 1,340 locations in the U.S. and Canada at the end of the second quarter of fiscal 2026 23. GMS contributed $1.4 billion of incremental net sales in the second quarter of fiscal 2026 2.
Market context
The company describes its industry as highly competitive and highly fragmented, with rivals including hardware stores, electrical and plumbing supply houses, lumber yards and online retailers 1. Customer behaviour is influenced by consumer uncertainty and housing affordability pressure, and customers have favoured smaller repair and maintenance projects 2.
The macroeconomic environment remains uncertain, and a persisting high interest rate environment was cited as pressure on broader home improvement demand in fiscal 2025 1. Tariffs and trade policy, including the Supreme Court decision on IEEPA tariffs, affected costs, and the company began receiving tariff refunds 2.
Trends
- Smaller repair and maintenance projectsmixed
Customers continued to engage in smaller projects, which supported comparable sales, although broader home improvement demand remains under pressure 12. If this pattern persists, it could support transaction levels in the near term.
- IEEPA tariff refundstailwind
Following the Supreme Court decision, the company received IEEPA refunds, mainly recognised as a reduction of cost of goods sold, which helped gross margin in the second quarter of fiscal 2026 23. These refunds could partly offset unplanned fuel and energy costs 3.
- Fuel, energy and input costsheadwind
Higher fuel, energy and other product input costs pressured gross margin in the second quarter of fiscal 2026 23. If these costs persist, they could limit operating efficiency.
- Interest rates and housing creditmixed
A high interest rate environment was cited as pressure on home improvement demand 1. If rates fall, larger projects could benefit, although the sources do not quantify this effect 1.
Competitive position
The company competes on customer experience, price, quality, product availability and delivery options, both in stores and online 1. Online competition and AI tools reduce barriers to entry and increase price transparency 1.
For professionals, competition centres on dedicated sales support, credit terms, project planning tools and reliable deliveries, where specialty distributors play an important role 1. The GMS acquisition extended SRS's position in this niche 2.
- Lowe's CompaniesLOW
Home improvement retailer that is part of the direct competition in the big-box and home improvement retail category 1.
- Specialty building materials distributors
Lumber yards and electrical, plumbing and building materials distributors compete for professional customers 1.
- Online and marketplace retailers
Exclusively online retailers and reseller marketplaces intensify competition through price transparency and comparison shopping 1.
- Paint, design and warehouse club retailers
Specialty paint stores, design showrooms and warehouse clubs compete in certain product categories 1.
Links, dependencies and risks
Who the company is tied to, from its own SEC filings (customers, suppliers, production, partners, competitors, countries, regulation), from the 5 %+ holders' statements (13D/13G) and from what other companies say about it. Click a node for its evidence; on a listed company the graph moves to it.
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News & filings
In the press
- Cramer: What must happen for Home Depot to keep its 25% monthlong rally goingCNBC — Top News · 04 Nov 2026 · EN
- A new analyst call on Home Depot reflects our feeling on what to do with the stockCNBC — Top News · 06 Oct 2026 · EN
- AWS needs to embrace its place as the Home Depot of AI infrastructureThe Register · 28 Sept 2026 · EN
- Home Depot (HD) is Positioned to benefit from Housing Market RecoveryYahoo Finance — News · 23 Sept 2026 · EN
- His Bet On Home Depot Made Ken Langone A Billionaire. Now He Sees Eli Lilly Stock Hitting $2,000Yahoo Finance — News · 22 Sept 2026 · EN
- Home Depot CFO issues chilling alarm over ‘frozen’ US housing market — crucial metric plunges to historic lowYahoo Finance — News · 22 Sept 2026 · EN
- Home Depot Sees Broad Strength as Pro Sales, Delivery and AI Drive Share GainsYahoo Finance — News · 15 Sept 2026 · EN
- Home Depot vs. Lowe’s: One Payout Will Weather the Storm — Here’s WhichYahoo Finance — News · 14 Sept 2026 · EN
- Here's How Many Shares of Home Depot You'd Need for $10,000 in Yearly DividendsYahoo Finance — News · 13 Sept 2026 · EN
- Home Depot vs. Walmart: Which Consumer Stock Is a Better Buy in 2026?Yahoo Finance — News · 12 Sept 2026 · EN
- A Rare Quant Signal Just Flashed for Contrarian Options Traders in Home Depot StockYahoo Finance — News · 10 Sept 2026 · EN
- Retailers are Handling Tariff Refunds in Very Different Ways: Walmart and Home DepotYahoo Finance — News · 06 Sept 2026 · EN
- Mortgage Rates Just Hit a 1-Year High. Here’s What That Means for Lowe’s and Home Depot Investors.Yahoo Finance — News · 03 Sept 2026 · EN
- Home Depot Bear Put Spread Could Return 181% in 45 DaysYahoo Finance — News · 02 Sept 2026 · EN
- Americans Stop Moving as Mortgage Lock-In Persists: Home Depot Sees 'No Sign' of Housing TurnaroundYahoo Finance — News · 01 Sept 2026 · EN
- How Is Home Depot’s Stock Performance Compared to Other Consumer Discretionary StocksYahoo Finance — News · 29 Aug 2026 · EN
- The Home Depot (HD) Posts Record Sales Growth Amid CEO LeaveYahoo Finance — News · 28 Aug 2026 · EN
- Walmart (WMT) and Home Depot (HD) Results Show US Consumers Cut Back but Still Find Room for SplurgesYahoo Finance — News · 28 Aug 2026 · EN
- If You'd Invested $1,000 in Home Depot 15 Years Ago, Here's How Much You'd Have TodayYahoo Finance — News · 25 Aug 2026 · EN
- Home Depot (HD) Beat Q2 Estimates. What Did the $685M Tariff Refund Change?Yahoo Finance — News · 25 Aug 2026 · EN
SEC filings
- Quarterly report25 Aug 2026
- Current report21 Aug 2026Departure or appointment of officers
- Current report18 Aug 2026Results of operations · Financial statements and exhibits
- Current report12 Aug 2026Departure or appointment of officers · Regulation FD disclosure · Financial statements and exhibits
- Quarterly report27 May 2026
- Current report26 May 2026Amendments to articles or bylaws · Shareholder vote · Financial statements and exhibits
- Current report19 May 2026Results of operations · Financial statements and exhibits
- Proxy statement07 Apr 2026
- Annual report18 Mar 2026
- Current report24 Feb 2026Results of operations · Financial statements and exhibits
Sources
- [1] Form 10-K, fiscal year ended 2026-02-01 · SEC / The Home Depot, Inc. · 18 Mar 2026
- [2] Form 10-Q, quarter ended 2026-08-02 · SEC / The Home Depot, Inc. · 25 Aug 2026
- [3] Form 8-K, results release (exhibit 99.1) · SEC / The Home Depot, Inc. · 18 Aug 2026
Figures computed by olivLaw from SEC filings and closing prices; the qualitative analysis is AI-generated from cited sources. Not investment advice.