The Home Depot, Inc. (HD) Valuation

Valuation

Model-based estimates, not advice. The DCF is the discounted-cash-flow value per share; compare it with the price, not as a target.

DCF fair value

-15.8%

$285.80

vs $339.33 price

Levered DCF

$194.42

After debt service

Piotroski score

6 / 9

Average

Altman Z-score

5.59

Safe zone

Rating

Overall 3 / 5

Ratios by fiscal year

Margins and yields are shares of revenue, equity or price; multiples are ×.

Metric	FY2025	FY2024	FY2023	FY2022	FY2021	FY2020	FY2019	FY2018
P/E	26.5×	27.32×	23.46×	18.77×	23.54×	22.54×	22.17×	18.77×
P/B	29.3×	60.94×	340.37×	205.6×	-228.06×	87.92×	-80.01×	-111.11×
P/S	2.28×	2.54×	2.33×	2.04×	2.56×	2.2×	2.26×	1.93×
EV / EBITDA	17.48×	18.29×	16.08×	13.62×	16.6×	15.62×	15.62×	13.17×
Gross margin	33.3%	33.4%	33.4%	33.5%	33.6%	34.0%	34.1%	34.3%
Operating margin	12.7%	13.5%	14.2%	15.3%	15.2%	13.8%	14.4%	14.4%
Net margin	8.6%	9.3%	9.9%	10.9%	10.9%	9.7%	10.2%	10.3%
Current ratio	1.06×	1.11×	1.35×	1.41×	1.01×	1.23×	1.08×	1.11×
Debt / equity	5.1×	9.38×	50.04×	32.24×	-27.28×	13.16×	-12×	-15.55×
Interest coverage	8.66×	9.27×	11.16×	14.87×	17.1×	13.57×	13.19×	14.78×
Dividend yield	2.4%	2.2%	2.4%	2.4%	1.8%	2.2%	2.4%	2.3%
Payout ratio	64.7%	60.3%	55.4%	45.5%	42.5%	50.1%	53.0%	42.3%

Key metrics by fiscal year

Metric	FY2025	FY2024	FY2023	FY2022	FY2021	FY2020	FY2019	FY2018
Return on equity	110.5%	223.0%	1450.5%	1095.1%	-968.9%	390.0%	-360.8%	-592.2%
Return on invested capital	19.0%	22.3%	29.0%	33.0%	36.7%	27.9%	33.2%	40.0%
Return on assets	13.5%	15.4%	19.8%	22.4%	22.9%	18.2%	21.9%	25.3%
Free cash flow yield	3.4%	4.0%	5.1%	3.6%	3.6%	5.6%	4.4%	5.1%
Earnings yield	3.8%	3.7%	4.3%	5.3%	4.2%	4.4%	4.5%	5.3%
Enterprise value	$439.4B	$465.3B	$403.8B	$368.8B	$430.7B	$325.6B	$284.6B	$236.1B
Net debt / EBITDA	2.54×	2.38×	1.93×	1.76×	1.69×	1.7×	1.94×	1.53×
Cash conversion cycle (days)	60	51	47	55	40	29	41	38