Home Depot Valuation

HD Stock  USD 344.21  1.48  0.43%   
At this time, the firm appears to be fairly valued. Home Depot retains a regular Real Value of $337.71 per share. The prevalent price of the firm is $344.21. Our model calculates the value of Home Depot from evaluating the firm fundamentals such as Return On Asset of 0.17, return on equity of 0.14, and Current Valuation of 385.71 B as well as inspecting its technical indicators and probability of bankruptcy. In general, most investors encourage purchasing undervalued assets and exiting overvalued assets since, at some point, asset prices and their ongoing real values will come together. Key fundamental drivers impacting Home Depot's valuation include:
Price Book
318.5062
Enterprise Value
385.7 B
Enterprise Value Ebitda
15.171
Price Sales
2.2256
Forward PE
21.9298
Fairly Valued
Today
344.21
Please note that Home Depot's price fluctuation is very steady at this time. Calculation of the real value of Home Depot is based on 3 months time horizon. Increasing Home Depot's time horizon generally increases the accuracy of value calculation and significantly improves the predictive power of the methodology used.
Our valuation method for Home Depot is useful when determining the fair value of the Home stock, which is usually determined by what a typical buyer is willing to pay for full or partial control of Home Depot. Since Home Depot is currently traded on the exchange, buyers and sellers on that exchange determine the market value of Home Stock. However, Home Depot's intrinsic value may or may not be the same as its current market price, in which case there is an opportunity to profit from the mispricing, assuming the market price will eventually merge with its intrinsic value.
Historical Market  344.21 Real  337.71 Target  321.54 Hype  344.15 Naive  339.96
The real value of Home Stock, also known as its intrinsic value, is the underlying worth of Home Depot Company, which is reflected in its stock price. It is based on Home Depot's financial performance, assets, liabilities, growth prospects, management team, or industry conditions. The intrinsic value of Home Depot's stock can be calculated using various methods such as discounted cash flow analysis, price-to-earnings ratio, or price-to-book ratio. That value may differ from its current market price, which is determined by supply and demand factors such as investor sentiment, market trends, news, and other external factors that may influence Home Depot's stock price. It is important to note that the real value of any stock may change over time based on changes in the company's performance.
336.43
Downside
337.71
Real Value
378.63
Upside
Estimating the potential upside or downside of Home Depot helps investors to forecast how Home stock's addition to their portfolios will impact the overall performance. We also use other valuation drivers to help us estimate the true value of Home Depot more accurately as focusing exclusively on Home Depot's fundamentals will not take into account other important factors:
Earnings
Estimates (0)
LowProjectedHigh
4.464.594.70
Details
Hype
Prediction
LowEstimatedHigh
342.87344.15345.43
Details
Potential
Annual Dividend
LowForecastedHigh
5.335.445.55
Details
34 Analysts
Consensus
LowTarget PriceHigh
292.60321.54356.91
Details
Traditionally analysts and sophisticated investors use multiple methods for valuing a cash-flow-generating entity or its stock. For example, some money managers use Home Depot's intrinsic value based on its ongoing forecasts of Home Depot's financial statements. In contrast, other private, professional wealth advisors use a multiplier approach by looking to relative value analysis against Home Depot's closest peers. When choosing an evaluation method for Home Depot, ensure it is appropriate for the firm given its current financial situation and market classification. If more than one evaluation category is relevant, we suggest using both methods to arrive at a better estimate.

Home Depot Investments

(4.49 Billion)

Home Valuation Trend

Knowing Home Depot's actual value is paramount for traders to make sound investment determinations. Home Depot's real value is not only important for the investor to make better decisions but also for a more accurate overall view of Home Depot's financial worth over time since having this information enables investors and analysts to forecast the earnings more efficiently. Using both Home Depot's enterprise value as well as its market capitalization is the best way to gauging the value of the company and is usually enough for investors to make market timing descisions.

Home Market Cap

Home Depot is one of the top stocks in market capitalization category among related companies. Market capitalization of Consumer Discretionary industry is currently estimated at about 487.61 Billion. Home Depot totals roughly 338.93 Billion in market capitalization claiming about 70% of stocks in Consumer Discretionary industry.
Capitalization  Total debt  Valuation  Workforce  Revenue

Home Depot Valuation Ratios as Compared to Competition

Comparative valuation techniques use various fundamental indicators to help in determining Home Depot's current stock value. Our valuation model uses many indicators to compare Home Depot value to that of its competitors to determine the firm's financial worth. You can analyze the relationship between different fundamental ratios across Home Depot competition to find correlations between indicators driving Home Depot's intrinsic value. More Info.
Home Depot is rated # 3 in price to earning category among related companies. It is rated # 2 in price to book category among related companies fabricating about  16.19  of Price To Book per Price To Earning. As of May 17, 2024, Price To Book Ratio is expected to decline to 87.92. Comparative valuation analysis is a catch-all model that can be used if you cannot value Home Depot by discounting back its dividends or cash flows. This model doesn't attempt to find an intrinsic value for Home Depot's Stock. Still, instead, it compares the stock's price multiples to a benchmark or nearest competition to determine if the stock is relatively undervalued or overvalued. The reason why the comparable model can be used in almost all circumstances is due to the vast number of multiples that can be utilized, such as the price-to-earnings (P/E), price-to-book (P/B), price-to-sales (P/S), price-to-cash flow (P/CF), and many others. The P/E ratio is the most commonly used of these ratios because it focuses on the Home Depot's earnings, one of the primary drivers of an investment's value.

Home Depot's Earnings Breakdown by Geography

Please note that valuation analysis is one of the essential comprehensive assessments in business. It evaluates Home Depot's worth, which you can determine by considering its current assets, liabilities and future cash flows. The investors' valuation analysis is an important metric that will give you a perspective on different companies. It helps you know the worth of the potential investment in Home Depot and how it compares across the competition.

About Home Depot Valuation

The stock valuation mechanism determines the current worth of Home Depot on a weekly basis. We use both absolute as well as relative valuation methodologies to arrive at the intrinsic value of Home Depot. In general, an absolute valuation paradigm, as applied to this company, attempts to find the value of Home Depot based exclusively on its fundamental and basic technical indicators. By analyzing Home Depot's financials, quarterly and monthly indicators, and its related drivers such as dividends, operating cash flow, and various types of growth rates, we attempt to find the most accurate representation of Home Depot's intrinsic value. In some cases, mostly for established, large-cap companies, we also incorporate more traditional valuation methods such as dividend discount, discounted cash flow, or asset-based models. As compared to an absolute model, our relative valuation model uses a comparative analysis of Home Depot. We calculate exposure to Home Depot's market risk, different technical and fundamental indicators, relevant financial multiples and ratios, and then comparing them to Home Depot's related companies.
Last ReportedProjected for Next Year
Gross Profit48.3 B50.7 B
Pretax Profit Margin 0.13  0.13 
Operating Profit Margin 0.14  0.14 
Net Profit Margin 0.1  0.1 
Gross Profit Margin 0.32  0.34 

Home Depot Quarterly Retained Earnings

83.66 Billion

8 Steps to conduct Home Depot's Valuation Analysis

Company's valuation is the process of determining the worth of any company in monetary terms. It estimates Home Depot's potential worth based on factors such as financial performance, market conditions, growth prospects, and overall economic environment. The result of company valuation is a single number representing a Company's current market value. This value can be used as a benchmark for various financial transactions such as mergers and acquisitions, initial public offerings (IPOs), or private equity investments. To conduct Home Depot's valuation analysis, follow these 8 steps:
  • Gather financial information: Obtain Home Depot's financial statements, including balance sheets, income statements, and cash flow statements.
  • Determine Home Depot's revenue streams: Identify Home Depot's primary sources of revenue, including products or services offered, target markets, and pricing strategies.
  • Analyze market data: Research Home Depot's industry and market trends, including the size of the market, growth rate, and competition.
  • Establish Home Depot's growth potential: Evaluate Home Depot's management, business model, and growth potential.
  • Determine Home Depot's financial performance: Analyze its financial statements to assess its historical performance and future potential.
  • Choose a valuation method: Consider the Company's specific circumstances and choose an appropriate valuation method, such as the discounted cash flow (DCF) or comparable analysis method.
  • Calculate the value: Apply the chosen valuation method to the financial information and market data to calculate Home Depot's estimated value.
  • Review and adjust: Review the results and make necessary adjustments, considering any relevant factors that may have been missed or overlooked.
Note: This is a general outline, and different approaches and methods may be used depending on the type and size of the company being valued. We also recomment to seek professional assistance to ensure accuracy.
Home Depot's stock price is the clearest measure of market expectations about its performance. Without stock valuation, investors cannot independently discern whether Home Depot's value is low or high relative to the company's performance and growth projections. Determining the market value of Home Depot can be done in different ways, such as multiplying its stock price by its outstanding shares.
A single share of Home Depot represents a small ownership stake in the entity. As a stockholder of Home, your percentage of company ownership is determined by dividing the number of shares you own by the total number of shares outstanding and then multiplying that amount by 100. Owning stock in a company generally confers both corporate voting rights and income from any dividends paid to the stock owner.

Home Depot Dividends Analysis For Valuation

At present, Home Depot's Dividend Paid And Capex Coverage Ratio is projected to slightly decrease based on the last few years of reporting. . At present, Home Depot's Retained Earnings Total Equity is projected to increase significantly based on the last few years of reporting. The current year's Earnings Yield is expected to grow to 0.04, whereas Price Earnings Ratio is forecasted to decline to 22.54.
Last ReportedProjected for Next Year
Dividends Paid8.4 B8.8 B
Dividend Yield 0.02  0.02 
Dividend Payout Ratio 0.55  0.50 
Dividend Paid And Capex Coverage Ratio 4.11  4.72 
There are various types of dividends Home Depot can pay to its shareholders, and the actual value of the dividend is determined on a per-share basis. It is to be paid equally to all of Home shareholders on a specific date, known as the payable date. The cash dividend is the most common type of dividend payment - it is the payment of actual cash from Home Depot directly to its shareholders. There are other types of dividends that companies can issue, such as stock dividends or asset dividends. When Home pays a dividend, it has no impact on its enterprise value. It does, however, lowers the Equity Value of Home Depot by the value of the dividends paid out.

Home Depot Growth Indicators

Growth stocks usually refer to those companies expected to grow sales and earnings faster than the market average. Growth stocks typically don't pay dividends, often look expensive, and usually trading at a high P/E ratio. Nevertheless, such valuations could be relatively cheap if the company continues to grow, which will drive the share price up. However, since most investors are paying a high price for a growth stock, based on expectations, if those expectations are not fully realized, growth stocks can see dramatic declines. Note, investing in growth stocks can be very risky. If the company such as Home Depot does not do well, investors take a loss on the stock when it is time to sell. Also, because growth stocks typically do not pay dividends, the only opportunity an investor has to make money on their investment is when they eventually sell their shares.
Common Stock Shares OutstandingB
Quarterly Earnings Growth Y O Y-0.05
Forward Price Earnings21.9298

Home Depot Current Valuation Indicators

Valuation refers to the process of determining the present value of Home Depot and all of its assets. It can be calculated using a number of techniques. As many analysts who try to value Home we look at many different elements of the entity such as Home's management, its prospective future earnings, the current market value of the company's assets, as well as its capital structure formation. Home Depot's valuation analysis is also a process of estimating the intrinsic value of all assets and outstanding equities. There are different methodologies and models we use to develop the final Home Depot's valuation. The techniques such as discounted cash flow and fundamental indicators such as book value per share or market capitalization are well known and widely used across most financial advisers and money managers.
Valuations are an essential part of business, for companies themselves, but also for investors. For companies, such as Home Depot, valuations can help measure their progress and success and can help them track their performance in the market compared to others. In addition, investors can use Home Depot's valuations to help determine the worth of potential investments. They can do this by using data and information made public by a company. Regardless of who the valuation is for, it essentially describes Home Depot's worth.
When determining whether Home Depot is a strong investment it is important to analyze Home Depot's competitive position within its industry, examining market share, product or service uniqueness, and competitive advantages. Beyond financials and market position, potential investors should also consider broader economic conditions, industry trends, and any regulatory or geopolitical factors that may impact Home Depot's future performance. For an informed investment choice regarding Home Stock, refer to the following important reports:
Check out Risk vs Return Analysis to better understand how to build diversified portfolios, which includes a position in Home Depot. Also, note that the market value of any company could be tightly coupled with the direction of predictive economic indicators such as signals in unemployment.
For information on how to trade Home Stock refer to our How to Trade Home Stock guide.
Note that the Home Depot information on this page should be used as a complementary analysis to other Home Depot's statistical models used to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.

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When running Home Depot's price analysis, check to measure Home Depot's market volatility, profitability, liquidity, solvency, efficiency, growth potential, financial leverage, and other vital indicators. We have many different tools that can be utilized to determine how healthy Home Depot is operating at the current time. Most of Home Depot's value examination focuses on studying past and present price action to predict the probability of Home Depot's future price movements. You can analyze the entity against its peers and the financial market as a whole to determine factors that move Home Depot's price. Additionally, you may evaluate how the addition of Home Depot to your portfolios can decrease your overall portfolio volatility.
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Is Home Depot's industry expected to grow? Or is there an opportunity to expand the business' product line in the future? Factors like these will boost the valuation of Home Depot. If investors know Home will grow in the future, the company's valuation will be higher. The financial industry is built on trying to define current growth potential and future valuation accurately. All the valuation information about Home Depot listed above have to be considered, but the key to understanding future value is determining which factors weigh more heavily than others.
Quarterly Earnings Growth
(0.05)
Dividend Share
6.43
Earnings Share
14.91
Revenue Per Share
152.785
Quarterly Revenue Growth
(0.02)
The market value of Home Depot is measured differently than its book value, which is the value of Home that is recorded on the company's balance sheet. Investors also form their own opinion of Home Depot's value that differs from its market value or its book value, called intrinsic value, which is Home Depot's true underlying value. Investors use various methods to calculate intrinsic value and buy a stock when its market value falls below its intrinsic value. Because Home Depot's market value can be influenced by many factors that don't directly affect Home Depot's underlying business (such as a pandemic or basic market pessimism), market value can vary widely from intrinsic value.
Please note, there is a significant difference between Home Depot's value and its price as these two are different measures arrived at by different means. Investors typically determine if Home Depot is a good investment by looking at such factors as earnings, sales, fundamental and technical indicators, competition as well as analyst projections. However, Home Depot's price is the amount at which it trades on the open market and represents the number that a seller and buyer find agreeable to each party.