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The Home Depot, Inc. HD

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At $335.61 the market pays 23.5 times earnings for a company whose earnings per share have fallen three years running, from $16.69 to $14.23.

The setup turns on what management did with the money: $23 billion of acquisitions in two years, buybacks cut to zero, and a share count that is rising again.

Key data

ItemValue
Price, 2026-08-21$335.61, 21.4% below the 52-week high of $426.75
Market capitalization / enterprise value$334.6B / $390.4B
FY2025 revenue$164.7B, up 3.2%
FY2025 GAAP diluted EPS$14.23, from $16.69 in FY2022
Operating margin12.7%, from 15.3% in FY2022
Gross margin / inventory turns33.2% / 4.21x
Free cash flow / FCF yield$12.6B / 4.5%
Debt to equity / tangible book per share3.48x / negative $16.87

HD · price with moving averages

Daily · 6MWeekly · 3Y
$264$309$354$399$444 Sep '23Apr '24Nov '24Jun '25Jan '26Sep '26 BID
EMAs82140

Source: market data.

The business

Home Depot sells building materials, tools, appliances, and the rest of what a house consumes, through big-box stores and now through distribution branches. Roughly half of revenue comes from professional contractors and half from homeowners. The company gets paid at the register and on trade accounts, and the engine is inventory velocity: 33.2% gross margin turned 4.21 times a year, which is how a retailer converts thin markup into $12.6 billion of free cash flow.

What changed is where the money goes. Demand still runs on housing turnover, because people renovate when they move and they move when mortgage rates let them, and turnover has been frozen for four years. Management answered by buying the professional channel, spending $17.64 billion on acquisitions in fiscal 2024 and $5.41 billion in fiscal 2025 to add SRS Distribution and GMS. Distribution carries structurally lower margin than the stores, and operating margin has fallen from 15.3% to 12.7%.

Inside the complete One Pager

  1. 01The business
  2. 02Things you might not know
  3. 03Fundamentals
  4. 04Valuation
  5. 05Management
  6. 06Compensation
  7. 07The linchpins
  8. 08Last word

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