Home Depot's average rating is Buy from 21 analysts. Do analysts base this consensus on technical analyses? We know that typical technical analysis utilizes price momentum, patterns, and trends looking at historical prices. It aims to identify signals based on Home Depot market sentiment investors' perception of the future value of Home Depot. Let us look at a few aspects of Home Depot technical analysis.
Using predictive
technical analysis, we can analyze different prices and returns patterns and
diagnose historical swings to determine the real value of Home Depot. In general, sophisticated investors focus on analyzing Home Depot stock price patterns and their correlations with different microeconomic environment and drivers. They apply predictive analytics to build Home Depot's daily price indicators and compare them against related drivers such as
momentum indicators and various other types of predictive indicators. Using this methodology combined with a more conventional
technical analysis and
fundamental analysis, we attempt to find the most accurate representation of
Home Depot's intrinsic value. In addition to deriving basic predictive indicators for Home Depot, many experienced traders also check how macroeconomic factors affect Home Depot price patterns. Please read more on our
technical analysis page or use our predictive modules below to complement your research.
Sophisticated investors, who have witnessed
many market ups and downs, anticipate that the market will even out over time. This tendency of Home Depot's price to converge to an average value over time is called mean reversion. However, historically, high market prices usually discourage investors that believe in mean reversion to invest, while low prices are viewed as an opportunity to buy.
Please note, it is not enough to conduct a financial or market analysis of a single entity such as Home Depot. Your research has to be compared to or analyzed against Home Depot's peers to derive any actionable benefits. When done correctly, Home Depot's competitive analysis will give you plenty of quantitative and qualitative data to validate your investment decisions or develop an entirely new strategy toward taking a position in Home Depot.
How important is Home Depot's Liquidity
Home Depot
financial leverage refers to using borrowed capital as a funding source to finance Home Depot ongoing operations. It is usually used to expand the firm's asset base and generate returns on borrowed capital. Home Depot financial leverage is typically calculated by taking the company's all interest-bearing debt and dividing it by total capital. So the higher the debt-to-capital ratio (i.e., financial leverage), the riskier the company. Financial leverage can amplify the potential profits to Home Depot's owners, but it also increases the potential losses and risk of financial distress, including bankruptcy, if the firm cannot cover its debt costs. The degree of Home Depot's financial leverage can be measured in several ways, including by ratios such as the debt-to-equity ratio (total debt / total equity), equity multiplier (total assets / total equity), or the debt ratio (total debt / total assets). Please check the
breakdown between Home Depot's total debt and its cash.
Home Depot Gross Profit
Home Depot Gross Profit growth is one of the most critical measures in evaluating the company. The Gross Profit growth rate is calculated simply by comparing Home Depot previous period's values with its current period's values. Each time period you're measuring should be of equal lengths the increase or decrease, in a company's Gross Profit between two periods. Here we show Home Depot Gross Profit growth over the last 10 years. Please check Home Depot's
gross profit and other
fundamental indicators for more details.
Is Home Depot valued correctly by the market?
The entity has a beta of 1.158. Let's try to break down what Home Depot's beta means in this case. Home Depot returns are very sensitive to returns on the market. As the market goes up or down, Home Depot is expected to follow. The beta indicator helps investors understand whether Home Depot moves in the same direction as the rest of the market, and how volatile (i.e., risky) it is compared to the market (i.e., selected benchmark). In other words, if Home Depot deviates very little from the market, it does not add much risk to the portfolio, but it also doesn't increase the expected returns. The firm generated the yearly revenue of 147.7
B. Reported Net Income was 15.94
B with gross profit of 44.85
B.
Over 3 percent surge for Home Depot. What does it mean for shareholders?
Latest skewness is at -1.03. Home Depot exhibits very low volatility with skewness of -1.03 and kurtosis of 2.43. However, we advise investors to further study Home Depot technical indicators to make sure all market info is available and is reliable. Understanding different market volatility trends often help investors to time the market. Properly using volatility indicators enable traders to measure Home Depot's stock risk against market volatility during both bullying and bearish trends. The higher level of volatility that comes with bear markets can directly impact Home Depot's stock price while adding stress to investors as they watch their shares' value plummet. This usually forces investors to rebalance their portfolios by buying different stocks as prices fall.
Home Depot Implied Volatility
Home Depot's implied volatility exposes the market's sentiment of Home Depot stock's possible movements over time. However, it does not forecast the overall direction of its price. In a nutshell, if Home Depot's implied volatility is high, the market thinks the stock has potential for high price swings in either direction. On the other hand, the low implied volatility suggests that Home Depot stock will not fluctuate a lot when Home Depot's options are near their expiration.
Our Final Take On Home Depot
Although some firms in the home improvement retail industry are either recovering or due for a correction, Home Depot may not be as strong as the others in terms of longer-term growth potentials. While some shareholders may not share our view, we believe it may be a good time to increase your existing holdings in Home Depot. Please use our equity advice module to run different scenarios to ensure your current risk level and investment horizon are fully reflective of your current investing preferences in regards to Home Depot.
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Raphi Shpitalnik is a Junior Member of Macroaxis Editorial Board. Raphael is a young entrepreneur who joined Macroaxis on a part-time basis at the beginning of the pandemic and eventually acquired a real taste for investing and fintech. He likes to analyze different equity instruments across a wide range of industries, focusing primarily on consumer products, sports, fintech, cannabis, and AI.
View Profile This story should be regarded as informational only and should not be considered a solicitation to sell or buy any financial products. Macroaxis does not express any opinion as to the present or future value of any investments referred to in this post. This post may not be reproduced without the consent of Macroaxis LLC. Macroaxis LLC and Raphi Shpitalnik do not own shares of Home Depot. Please refer to our
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