Start here if you're new
what it is
Home Depot sells home repair and building supplies to DIY shoppers and professional contractors.
how it gets paid
Last year Home Depot made $159.5B in revenue. DIY home improvement merchandise was the main engine at $69.4B, or 44% of sales.
why it's growing
Revenue grew 4.5% last year. The latest quarter adjusted EPS ~$2.58 mattered because it showed Home Depot can still squeeze profit out of sluggish top-line growth.
what just happened
Home Depot beat quarter EPS by $0.13, while quarter revenue was ~$38.2B (flat vs tough comps— not annual sales).
At a glance
A++ balance sheet — fortress balance sheet — as safe as it gets
90/100 earnings predictability — you can trust these numbers
26.1x trailing p/e — priced about right
2.6% dividend yield — cash in your pocket every quarter
30.5% return on capital — every dollar works hard here
xvary composite: 77/100 — average
What they do
Home Depot sells home repair and building supplies to DIY shoppers and professional contractors.
You get 2,359 stores and 35,000 items in one stop. That beats a 20-minute run to five stores. Leaving means losing the truck, the aisle, and the contractor relationship at the same time. It also has 470,000 employees, which is a lot of people to keep your leaky sink from becoming a weekend.
How they make money
$159.5B
annual revenue · their business grew +4.5% last year
DIY home improvement merchandise
$69.4B
+2.5%
Pro contractor sales
$47.9B
+7.0%
Lumber and building materials
$20.7B
+1.5%
Installation and services
$12.8B
+6.0%
SRS Distribution
$8.7B
+20.0%
The products that matter
home improvement retail sales
Retail Sales
$159.5B revenue base
it's the whole machine: $159.5B in annual sales with a 10.4% net margin. simple business model, enormous scale.
entire revenue base
digital ordering channel
Online Sales
10% of sales
online is 10% of sales, which tells you this is still a physical retail story first. digital matters, but the orange box still does the heavy lifting.
10% of sales
Key numbers
$159.5B
annual revenue
That is bigger than the GDP of some countries and smaller than the pile of cash people think a hardware store should make.
16.0%
operating margin
You keep 16 cents of operating profit for every sales dollar after the store bill gets paid.
30.5%
return on capital
That means each dollar tied up in the business has been turning into 30.5 cents of profit.
2.6%
dividend yield
You get paid 2.6% a year to wait, which is more than most savings accounts and less than most people want.
Financial health
A++
strength
- balance sheet grade A++ — the absolute highest — fortress balance sheet
- risk rank 1 — safer than 95% of stocks
- price stability 90 / 100
- long-term debt $48.3B (12% of capital)
- net profit margin 10.4% — keeps 10 cents of every dollar in revenue
- return on equity 223% — $2.23 profit for every $1 investors have put in
A++ with balance sheet grade and risk rank standing out. your money faces less risk here than at most public companies.
Total return vs. market
You invested $10,000 in HD 3 years ago → it's now worth $13,660.
The index would have given you $14,540.
source: institutional data · total return
What just happened
beat estimates
Home Depot beat quarter EPS by $0.13, while quarter revenue held ~$38.2B.
Adjusted EPS ~$2.58 vs ~$2.45 expected. Quarter revenue ~$38.2B; gross margin ~33.5%. Full-year revenue on this page remains ~$159.5B.
$38.2B
quarter revenue
$2.58
adj. quarter EPS
33.5%
gross margin
the number that mattered
The $2.58 EPS print mattered because it showed Home Depot can still squeeze profit out of flat demand.
source: company earnings report, 2026
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What could go wrong
the #1 risk is home-improvement demand slowing while the stock still carries a premium multiple.
med
category slowdown
Home Depot is tied to repair, renovation, and housing activity. With one giant revenue stream worth $159.5B, a soft consumer or weaker housing turnover shows up fast.
Impact: when a one-segment retailer slows, there is nowhere else to hide inside the model.
med
estimate slippage
The current FY2026 EPS estimate is $15.00. FY2025 came in at $14.23. That is progress, but not a huge cushion.
Impact: if $15.00 starts drifting back toward $14.23, the market stops paying up for "steady" and starts asking why the stock deserves 26.1x earnings.
med
ownership fatigue
Institutions showed 1,546 buyers versus 1,741 sellers in 4Q2025. That is not a panic signal, but it does tell you big money has been trimming, not pressing.
Impact: in a stock that already lagged the market by $880 on a $10,000 investment over three years, muted sponsorship matters.
A miss is not fatal to the business. It is more likely fatal to the premium. If earnings stall near $14.23 while the stock still trades around 26x trailing earnings, downside comes from multiple compression more than balance-sheet stress.
source: institutional data · regulatory filings · risk analysis
Pay attention to
earnings
the next guidepost is whether $15.00 still holds
The FY2026 EPS estimate is $15.00. If management and analysts keep walking that number down, the valuation math changes with it.
trend
revenue growth on a giant base
$159.5B growing 4.5% sounds modest until you remember the denominator. The question is whether growth re-accelerates or settles into something slower.
metric
online stays support, not the whole story
Digital is 10% of sales. If that mix rises, it helps convenience. If it stays flat, the store base remains the center of gravity.
risk
institutional selling vs. renewed conviction
1,546 buyers versus 1,741 sellers is not dramatic, but it is a tell. You want to see sponsorship stabilize if the upside case is going to feel real.
Analyst rankings
short-term outlook
below average
Momentum score 4. In human-speak, analysts do not expect HD to be a short-term winner from here.
risk profile
safest 5%
Stability score 1 means this ranks among the market's lower-risk names. Safe does not mean cheap.
chart momentum
below average
Technical score 4 says the tape has been weaker than you would expect from a classic defensive compounder.
earnings predictability
90 / 100
The business is unusually consistent. You usually know roughly what quarter you are going to get.
source: institutional data
Institutional activity
1,546 buyers vs. 1,741 sellers in 4q2025. total institutional holdings: 0.7B shares.
source: institutional data
Price targets
3-5 year target range
$320
$581
$371
current price
$451
target midpoint · +22% from current · 3-5yr high: $495 (+35% · 10% ann'l return)
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