The Home Depot, Inc.
The Home Depot, Inc. Fundamental Analysis
The Home Depot, Inc. (HDI.DE) shows weak financial fundamentals with a PE ratio of 20.97, profit margin of 8.60%, and ROE of 1.30%. The company generates $165.2B in annual revenue with moderate year-over-year growth of 4.48%.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 51.2/100 based on profitability, valuation, growth, and balance sheet metrics. The C grade reflects average fundamentals, with notable risks in certain areas.
Fundamental Health Score
We analyze HDI.DE's fundamental strength across five key dimensions:
Efficiency Score
ExcellentHDI.DE demonstrates superior asset utilization.
Valuation Score
ExcellentHDI.DE trades at attractive valuation levels.
Growth Score
WeakHDI.DE faces weak or negative growth trends.
Financial Health Score
ModerateHDI.DE shows balanced financial health with some risks.
Profitability Score
ModerateHDI.DE maintains healthy but balanced margins.
Key Financial Metrics
Is HDI.DE Expensive or Cheap?
P/E Ratio
HDI.DE trades at 20.97 times earnings. This indicates a fair valuation.
PEG Ratio
When adjusting for growth, HDI.DE's PEG of -4.03 indicates potential undervaluation.
Price to Book
The market values The Home Depot, Inc. at 23.15 times its book value. This suggests the stock is fully valued or overvalued on an asset basis.
EV/EBITDA
Enterprise value stands at 9.16 times EBITDA. This is generally considered low.
How Well Does HDI.DE Make Money?
Net Profit Margin
For every $100 in sales, The Home Depot, Inc. keeps $8.60 as profit after all expenses.
Operating Margin
Core operations generate 12.68 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $1.30 in profit for every $100 of shareholder equity.
ROA
The Home Depot, Inc. generates $13.46 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
The Home Depot, Inc. generates limited operating cash flow of $16.38B, signaling weaker underlying cash strength.
Free Cash Flow
The Home Depot, Inc. produces free cash flow of $12.69B, offering steady but limited capital for shareholder returns and expansion.
FCF Per Share
Each share generates $12.74 in free cash annually.
FCF Yield
HDI.DE converts 4.25% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
20.97
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
-4.03
vs 25 benchmark
P/B Ratio
Price to book value ratio
23.15
vs 25 benchmark
P/S Ratio
Price to sales ratio
1.81
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
5.74
vs 25 benchmark
Current Ratio
Current assets to current liabilities
1.06
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
1.30
vs 25 benchmark
ROA
Return on assets percentage
0.13
vs 25 benchmark
ROCE
Return on capital employed
0.29
vs 25 benchmark
How HDI.DE Stacks Against Its Sector Peers
| Metric | HDI.DE Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 20.97 | 23.70 | Better (Cheaper) |
| ROE | 130.01% | 1185.00% | Weak |
| Net Margin | 8.60% | 2506.00% | Weak |
| Debt/Equity | 5.74 | 0.77 | Weak (High Leverage) |
| Current Ratio | 1.06 | 2.86 | Neutral |
| ROA | 13.46% | -8132.00% (disorted) | Strong |
HDI.DE outperforms its industry in 2 out of 6 key metrics, particularly excelling in ROA, but lagging in ROE.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews The Home Depot, Inc.'s 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
59.77%
Industry Style: Cyclical, Growth, Discretionary
High GrowthEPS CAGR
45.40%
Industry Style: Cyclical, Growth, Discretionary
High GrowthFCF CAGR
59.38%
Industry Style: Cyclical, Growth, Discretionary
High Growth