The Home Depot, Inc. (HD) Stock Analysis
Score ACompounder · Grade A · Bearish
$301.72
$391.53
+29.8%
10/10
A
Compounder
Investment Thesis
Good opportunity: Solid company with good risk/reward at 6.9:1.
For New Investors
Quantitative score: high
For Current Holders
Quantitative score: neutral
Buy if
- Price drops 15-20% (improves asymmetry)
- Bull scenario catalysts materialize
- Market-wide correction creates opportunity
Sell if
- Bear scenario triggers occur
- Quality metrics deteriorate (ROIC declining)
- Better alternatives emerge
Valuation
Fair Value estimate: $391.53 (+29.8%). Significantly undervalued.
PEG-Based EPS
$378.12
FCF DCF Model
$392.24
EV/EBITDA
$392.24
Blended Fair Value
$391.53
Confidence
High
Methods
PEG-Based EPS, FCF 2-Stage DCF, EV/EBITDA
Quality Analysis
100/120 points
Investable
ROE (3Y Avg)
594.6%
ROIC-WACC Spread
14.8%
D/E Ratio
5.1x
Current Ratio
1.1x
Interest Coverage
9x
FCF Positive Years
3/3
Quality Flags
- Leverage: D/E 5.1x (0/15 pts)
Market Sentiment
Wall Street Consensus
$412.50
+36.7% Upside
33 analysts
Range: $320.00 — $454.00
Rating: Buy
Our model aligns with Wall Street consensus.
Trend & Technical
Price ($301.45) is 17.2% below SMA 200 ($363.88). Bearish trend. Caution on entry.
Tech Score 29/100 — Very weak technicals. Multiple bearish signals active.
Risk & Reward
Asymmetry Ratio
6.86:1
Expected Return
+34.1%
Bull Upside
+68.6%
Bear Downside
-10.0%
Excellent asymmetry: 6.86:1 ratio. Upside significantly outweighs downside.
Verdict: Very Favorable
Scenario Analysis
Bear
Base
Bull
Buy Zone & Action Plan
See exact entry zones, stop-loss levels, and a personalized action plan.
AI Executive Summary
Get a detailed AI-written breakdown of the investment thesis, risks, and catalysts.
Technical Analysis
RSI, MACD, moving averages, trend signals, and momentum indicators.
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Frequently Asked Questions
What is the fair value of HD?
Based on our multi-method conviction analysis, the estimated fair value of The Home Depot, Inc. (HD) is $391.53. This is calculated by blending PEG-Based EPS, FCF 2-Stage DCF, EV/EBITDA and applying a quality premium of 0% based on the company's fundamentals. The confidence level of this estimate is high.
Is HD a buy, sell, or hold?
HD currently has a BUY rating with a conviction score of 10/10. Good opportunity: Solid company with good risk/reward at 6.9:1. Quantitative score: high.
Is HD a high-quality stock?
The Home Depot, Inc. has a quality grade of A (100/120 points), rated as Investable. Key metrics include ROE of 594.6%, ROIC-WACC spread of 14.8%, and D/E ratio of 5.1x.
What type of stock is HD?
HD is classified as a "compounder" in our framework. High dividend: 3.1%, Mature growth: 2.5%, High debt: D/E 5.1x, Cyclical sector: Consumer Cyclical, Large cap: $300.5B
What do Wall Street analysts say about HD?
33 Wall Street analysts have a consensus price target of $412.50 for HD, representing +36.7% upside. Targets range from $320.00 to $454.00. The consensus recommendation is "Buy". Our model aligns with Wall Street consensus.
What are the risks of investing in HD?
The risk/reward asymmetry ratio for HD is 6.86:1, rated as Very Favorable. Excellent asymmetry: 6.86:1 ratio. Upside significantly outweighs downside. The expected return is +34.1%, with bull case upside of +68.6% and bear case downside of -10.0%.
What is the current trend for HD?
HD is in a bearish trend. Price ($301.45) is 17.2% below SMA 200 ($363.88). Bearish trend. Caution on entry. The technical score is 29/100.
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Last updated: May 19, 2026 · Framework version 3.7
This analysis is for informational purposes only and should not be considered financial advice. Always do your own research before making investment decisions.