📊 HD Key Takeaways
Is Home Depot, Inc.. (HD) a Good Investment?
Home Depot demonstrates exceptional operational profitability with 23.7% ROE and generates robust free cash flow ($5.2B, 12.4% margin), enabling strong shareholder returns despite leverage. However, declining EPS (-4.6% YoY) alongside revenue growth signals margin compression concerns, while the 3.23x debt-to-equity ratio combined with tight liquidity (1.04x current ratio) creates financial fragility if operations weaken.
Home Depot shows high-quality core fundamentals with strong gross and operating margins, excellent interest coverage, and substantial free cash flow generation. Revenue is still growing, but declining net income and EPS indicate some pressure below the top line, likely from margin, financing, or cost headwinds. Overall, the business remains fundamentally strong, though leverage and slower earnings momentum keep it from the highest rating.
Home Depot, Inc.. Key Strengths (HD)
- Exceptional profitability metrics: 33% gross margin, 11.9% operating margin, 23.7% ROE reflecting operational excellence in a mature retail segment
- Strong free cash flow generation: $5.2B FCF with 12.4% margin provides substantial capital for debt service and shareholder returns
- Solid interest coverage ratio of 10.3x demonstrates ability to service debt obligations comfortably despite elevated leverage
- Strong profitability with 33.3% gross margin, 12.7% operating margin, and 8.6% net margin
- Robust cash generation with $16.32B operating cash flow and $12.65B free cash flow
- Excellent debt servicing capacity with 43.1x interest coverage
HD Stock Risks: Home Depot, Inc.. Investment Risks
- Declining diluted EPS (-4.6% YoY) despite 3.2% revenue growth indicates margin compression and deteriorating profitability per share
- High financial leverage (3.23x debt-to-equity, $44.8B long-term debt) combined with extremely tight liquidity (1.04x current ratio, 0.28x quick ratio) creates vulnerability to operational disruptions
- Low return on assets (3.0%) suggests inefficient asset utilization relative to substantial $107.9B asset base and 33% gross margins
- Net income and diluted EPS declined year over year despite revenue growth, signaling weaker earnings conversion
- High leverage with $49.40B long-term debt and 3.86x debt-to-equity
- Thin liquidity profile with a 0.26x quick ratio and limited cash balance of $1.39B
Key Metrics to Watch
- Net margin trend and EPS trajectory to confirm whether margin compression is temporary or structural
- Free cash flow conversion and operating cash flow stability to ensure debt service capacity remains robust
- Debt-to-equity ratio and liquidity ratios (quick ratio particularly) to monitor financial flexibility
- Operating margin and net income trend
- Free cash flow and long-term debt levels
Home Depot, Inc.. (HD) Financial Metrics & Key Ratios
💡 AI Analyst Insight
Home Depot, Inc.. presents a mixed fundamental picture. Review the detailed metrics above to form your own investment thesis.
HD Profit Margin, ROE & Profitability Analysis
HD vs Consumer Sector: How Home Depot, Inc.. Compares
How Home Depot, Inc.. compares to Consumer sector averages
Sector benchmarks are approximate industry averages. Actual sector performance may vary.
Is Home Depot, Inc.. Stock Overvalued? HD Valuation Analysis 2026
Based on fundamental analysis, Home Depot, Inc.. has mixed fundamental signals relative to the Consumer sector in 2026.
Note: This is a fundamental analysis based on SEC filings. For P/E ratio, price targets, and market-based valuation, consult financial data providers. This is not investment advice.
Home Depot, Inc.. Balance Sheet: HD Debt, Cash & Liquidity
HD Revenue & Earnings Growth: 5-Year Financial Trend
5-Year Trend Summary: Home Depot, Inc..'s revenue has shown modest growth of 9% over the 5-year period. The most recent EPS of $15.11 reflects profitable operations.
HD Revenue Growth, EPS Growth & YoY Performance
HD Quarterly Earnings & Performance
| Quarter | Revenue | Net Income | EPS |
|---|---|---|---|
| Q1 2026 | $39.9B | $3.3B | $3.30 |
| Q3 2025 | $40.2B | $3.6B | $3.62 |
| Q2 2025 | $43.2B | $4.6B | $4.58 |
| Q1 2025 | $36.4B | $3.4B | $3.45 |
| Q3 2024 | $37.7B | $3.6B | $3.67 |
| Q2 2024 | $42.9B | $4.6B | $4.60 |
| Q1 2024 | $36.4B | $3.6B | $3.63 |
| Q3 2023 | $37.7B | $3.8B | $3.81 |
Data sourced from SEC EDGAR 10-Q quarterly filings. Figures may represent quarterly or cumulative values.
Home Depot, Inc.. Dividends, Buybacks & Capital Allocation
HD SEC Filings: Latest 10-K & 10-Q Analysis
Access official SEC EDGAR filings for Home Depot, Inc.. (CIK: 0000354950)
📋 Recent SEC Filings
❓ Frequently Asked Questions about HD
What is the AI rating for HD?
Home Depot, Inc.. (HD) has a Combined AI Grade of A from Claude (A) and ChatGPT (A) with 76% combined confidence, based on fundamental analysis of SEC EDGAR filings.
What are HD's key strengths?
Claude: Exceptional profitability metrics: 33% gross margin, 11.9% operating margin, 23.7% ROE reflecting operational excellence in a mature retail segment. Strong free cash flow generation: $5.2B FCF with 12.4% margin provides substantial capital for debt service and shareholder returns. ChatGPT: Strong profitability with 33.3% gross margin, 12.7% operating margin, and 8.6% net margin. Robust cash generation with $16.32B operating cash flow and $12.65B free cash flow.
What are the risks of investing in HD?
Claude: Declining diluted EPS (-4.6% YoY) despite 3.2% revenue growth indicates margin compression and deteriorating profitability per share. High financial leverage (3.23x debt-to-equity, $44.8B long-term debt) combined with extremely tight liquidity (1.04x current ratio, 0.28x quick ratio) creates vulnerability to operational disruptions. ChatGPT: Net income and diluted EPS declined year over year despite revenue growth, signaling weaker earnings conversion. High leverage with $49.40B long-term debt and 3.86x debt-to-equity.
What is HD's revenue and growth?
Home Depot, Inc.. reported revenue of $41.8B.
Does HD pay dividends?
Home Depot, Inc.. pays dividends, with $2,320.0M distributed to shareholders in the trailing twelve months.
Where can I find HD SEC filings?
Official SEC filings for Home Depot, Inc.. (CIK: 0000354950) including 10-K, 10-Q, and 8-K reports are available on SEC EDGAR.
What is HD's EPS?
Home Depot, Inc.. has a diluted EPS of $3.30.
How is the AI analysis conducted?
Two independent AI systems — Claude (Anthropic) and ChatGPT (OpenAI) — analyze SEC EDGAR filings including 10-K annual reports and 10-Q quarterly reports. Each AI evaluates financial health, profitability ratios, balance sheet strength, and growth metrics. The combined grade reflects both perspectives for balanced insights.
What is HD's fundamental grade?
Based on our AI fundamental analysis in June 2026, Home Depot, Inc.. has a A grade with 76% confidence. The AI analysis suggests favorable fundamentals based on SEC filings. This is not investment advice.
Is HD stock overvalued or undervalued?
Valuation metrics for HD: ROE of 23.7% (sector avg: 18%), net margin of 7.9% (sector avg: 8%). Higher ROE suggests strong returns relative to peers.
What is HD's AI grade for 2026?
Our dual AI analysis gives Home Depot, Inc.. a combined A grade for 2026. Revenue is data pending, with profitability at or below sector average. Always conduct your own research.
What is HD's free cash flow?
Home Depot, Inc..'s operating cash flow is $6.0B, with capital expenditures of $844.0M. FCF margin is 12.4%.
How does HD compare to other Consumer stocks?
Vs Consumer sector averages: Net margin 7.9% (avg: 8%), ROE 23.7% (avg: 18%), current ratio 1.04 (avg: 1.5).
Is Home Depot, Inc.. carrying too much debt?
HD has a debt-to-equity ratio of 3.23x, which is above the Consumer sector average of 0.8x. However, the current ratio of 1.04 suggests adequate short-term liquidity.