NYSE · Consumer Cyclical

The Home Depot, Inc.

HD · Home Improvement Retail

$334.28

▲ 6.8 (2.08%)

Cached · 10 min

Overall Grade

Defensive

Enterprising

Profitability

C⤢

Gross Profit Margin 33.0%

Operating Margin 11.9%

Net Income Margin 7.9%

Fin. Health

D⤢

Years to Pay Off Debt 19.2 yrs

Working Capital vs Long-Term Debt -$43.2B

Working Capital $1.6B

Valuation

F⤢

Margin of Safety 0.0%

Price-to-Book 24.02x

Cash Flow

B⤢

Free Cash Flow $5.2B

CapEx % of Net Income 25.7%

Owner Earnings $5.2B

Profitability

Gross Profit Margin 33.0%

Revenue minus cost of goods sold. Graham's ≥40% threshold identifies businesses with durable pricing power. Note: software and financial companies naturally exceed this; retailers and manufacturers rarely reach it due to their cost structures.

Operating Margin 11.9%

Profit after operating costs before interest and taxes. A consistent ≥15% operating margin signals a business with real competitive advantages. Capital-intensive industries (airlines, auto, commodities) rarely hit this threshold due to their structural cost base — compare within industry for context.

Net Income Margin 7.9%

Bottom-line profit as a percentage of revenue. The ≥20% target reflects Buffett's preference for highly profitable businesses. Financial engineering (buybacks, tax optimisation) can inflate this temporarily — look for consistency across multiple years rather than a single strong result.

Financial Health

Years to Pay Off Debt 19.2 yrs

Total Debt ÷ Net Income. Lower = stronger balance sheet. Important caveat: utilities, telecoms, REITs, and infrastructure companies carry large structural debt by design — their bond-like cash flows service it comfortably at ratios that would alarm Graham. Compare within sector.

Working Capital vs Long-Term Debt -$43.2B

Working Capital minus Long-Term Debt. Negative results are common and expected in capital-return-focused businesses like Apple, Domino's, and McDonald's — where aggressive buybacks and dividends intentionally reduce book equity. This does not indicate financial distress in high-FCF businesses.

Working Capital $1.6B

Current Assets minus Current Liabilities. Negative working capital can be a deliberate efficiency strategy in businesses that collect cash before paying suppliers (retailers, fast food franchises, subscription businesses). Assess alongside free cash flow generation for full context.

Cash Flow

Free Cash Flow $5.2B

Operating cash flow minus capital expenditures. Buffett's most important metric — cash a business actually generates for its owners after maintaining and growing its asset base. Consistently positive FCF is one of the strongest indicators of a durable, well-run business regardless of accounting profits.

CapEx % of Net Income 25.7%

Capital expenditure as a share of net income. Low CapEx signals a capital-light business that doesn't need heavy reinvestment to sustain earnings — Buffett's ideal. High CapEx is structurally necessary in manufacturing, airlines, telecoms, and semiconductors. For these industries, a high reading reflects the business model, not poor management.

Owner Earnings $5.2B

Net Income + Depreciation & Amortisation − Capital Expenditures. Buffett's preferred measure of a company's true annual earning power — what could theoretically be distributed to owners without impairing the business. More reliable than reported EPS because it accounts for the capital cost of maintaining the business.

Defensive — Graham's strict criteria (P/B, P/E, dividends, stability) · Enterprising — Profitability & cash flow focused, accepts higher valuations for quality

About The Home Depot, Inc.

The Home Depot, Inc. operates as a home improvement retailer in the United States and internationally. It sells various building materials, home improvement products, lawn and garden products, and décor products, as well as facilities maintenance, repair, and operations products. The company also offers installation services for flooring, water heaters, baths, garage doors, cabinets, cabinet makeovers, countertops, sheds, furnaces and central air systems, windows, and window coverings. In addition, it provides tool and equipment rental services. The company serves consumers, such as do-it-yourself homeowners and do-it-for-me customers; and professional renovators/remodelers, general contractors, homebuilders, maintenance professionals, handymen, property managers, building service contractors and specialty tradespeople, such as electricians, landscapers, insulation installers, plumbers, painters, pool contractors, roofers, and wallboard and ceiling installers. It sells its products through websites and its mobile applications, including homedepot.com; homedepot.ca and homedepot.com.mx; blinds.com, justblinds.com, and americanblinds.com for custom window coverings; constructionresourcesusa.com or design-oriented surfaces, appliances, and architectural specialty products; thecompanystore.com, an online site for textiles and décor products; hdsupply.com for maintenance, repair, and operations products and related services; and srsdistribution.com, heritagelandscapesupplygroup.com, heritagepoolsupplygroup.com, and gms.com for roofing and building materials, landscape, and pool products; and The Home Depot stores. The Home Depot, Inc. was incorporated in 1978 and is headquartered in Atlanta, Georgia.

Market Data

Market Cap $333.3B

Enterprise Value $398.2B

P/E (TTM) 23.72

Dividend Yield 2.12%

Exchange NYSE

Key Margins

Gross Profit 33.0%

Operating Margin 11.9%

Net Margin 7.9%

Company Info

Sector Consumer Cyclical

Industry Home Improvement Retail

Employees 470000

Country United States

Visit website

📖

Full Graham Analysis

Mr. Market is currently offering The Home Depot, Inc. at $334.28.

The business passes only 2 of 6 of Graham's defensive criteria — well below his required standard.

At $334.28, the stock trades at a 940% premium to its Graham Number of $32.14. Graham would consider this price speculative.

There is no margin of safety at the current price. Graham would advise patience and waiting for a better entry point.

Negative NCAV — liabilities exceed current assets. Common in capital-return businesses (buybacks, debt-funded dividends) and capital-intensive industries. Not automatically a warning sign..

Conclusion: By Graham's standards, this stock is speculative at its current price. The intelligent investor would look elsewhere or wait.

Showing Key Metrics

Income Highlights

Metric	Q2 2026	Q4 2025
Gross Profit %	33.0%▼	33.4%
Operating Margin %	11.9%▼	12.9%
Net Income %	7.9%▼	8.7%
Diluted EPS	3.30▼	3.62

Balance Sheet Highlights

Metric	Q2 2026	Q4 2025
Total Assets	$107.9B	$106.3B
Total Debt	$63.2B▼	$65.4B
Working Capital	$1.6B▼	$1.7B
Years to Pay Debt	19.20	18.17

Cash Flow Highlights

Metric	Q2 2026	Q4 2025	Q4 2024
Free Cash Flow	$5.2B▲	$3.1B•	N/A
Owner Earnings	$5.2B	$5.5B	N/A
CapEx % of Net Income	25.7%	24.9%	N/A

Income Statement

	2026	2025
Tax Rate For Calcs	0	0
Normalized EBITDA	6,069,000	6,429,000
Net Income From Continuing Operation Net Minority Interest	3,289,000	3,601,000
Reconciled Depreciation	1,081,000	1,044,000
Reconciled Cost Of Revenue	27,744,000	27,319,000
EBITDA	6,069,000	6,429,000
EBIT	4,988,000	5,385,000
Net Interest Income	-604,000	-596,000
Interest Expense	611,000	628,000
Interest Income	7,000	32,000
Normalized Income	3,289,000	3,601,000
Net Income From Continuing And Discontinued Operation	3,289,000	3,601,000
Total Expenses	36,784,000	35,999,000
Total Operating Income As Reported	4,981,000	5,353,000
Diluted Average Shares	996,000	995,000
Basic Average Shares	994,000	993,000
Diluted EPS	0	0
Basic EPS	0	0
Diluted NI Availto Com Stockholders	3,289,000	3,601,000
Net Income Common Stockholders	3,289,000	3,601,000
Net Income	3,289,000	3,601,000
Net Income Including Noncontrolling Interests	3,289,000	3,601,000
Net Income Continuous Operations	3,289,000	3,601,000
Tax Provision	1,088,000	1,156,000
Pretax Income	4,377,000	4,757,000
Net Non Operating Interest Income Expense	-604,000	-596,000
Interest Expense Non Operating	611,000	628,000
Interest Income Non Operating	7,000	32,000
Operating Income	4,981,000	5,353,000
Operating Expense	8,800,000	8,462,000
Depreciation Amortization Depletion Income Statement	841,000	826,000
Depreciation And Amortization In Income Statement	841,000	826,000
Selling General And Administration	7,959,000	7,636,000
Gross Profit	13,781,000	13,815,000
Cost Of Revenue	27,984,000	27,537,000
Total Revenue	41,765,000	41,352,000
Operating Revenue	41,765,000	41,352,000

Balance Sheet

	2026	2025
Treasury Shares Number	806,000	806,000
Ordinary Shares Number	997,000	995,387
Share Issued	1,803,000	1,801,387
Net Debt	51,908,000	54,330,000
Total Debt	63,157,000	65,417,000
Tangible Book Value	-18,849,000	-20,567,000
Invested Capital	67,383,000	68,130,000
Working Capital	1,592,000	1,748,000
Net Tangible Assets	-18,849,000	-20,567,000
Capital Lease Obligations	9,648,000	9,403,000
Common Stock Equity	13,874,000	12,116,000
Total Capitalization	58,702,000	58,459,000
Total Equity Gross Minority Interest	13,874,000	12,116,000
Stockholders Equity	13,874,000	12,116,000
Gains Losses Not Affecting Retained Earnings	-658,000	-820,000
Other Equity Adjustments	-658,000	-820,000
Treasury Stock	95,971,000	95,971,000
Retained Earnings	95,506,000	94,255,000
Additional Paid In Capital	14,907,000	14,562,000
Capital Stock	90,000	90,000
Common Stock	90,000	90,000
Total Liabilities Net Minority Interest	94,030,000	94,158,000
Total Non Current Liabilities Net Minority Interest	58,450,000	59,791,000
Other Non Current Liabilities	2,560,000	2,579,000
Non Current Deferred Liabilities	2,898,000	2,883,000
Non Current Deferred Taxes Liabilities	2,898,000	2,883,000
Long Term Debt And Capital Lease Obligation	52,992,000	54,329,000
Long Term Capital Lease Obligation	8,164,000	7,986,000
Long Term Debt	44,828,000	46,343,000
Current Liabilities	35,580,000	34,367,000
Current Deferred Liabilities	2,682,000	2,543,000
Current Deferred Revenue	2,682,000	2,543,000
Current Debt And Capital Lease Obligation	10,165,000	11,088,000
Current Capital Lease Obligation	1,484,000	1,417,000
Current Debt	8,681,000	9,671,000
Other Current Borrowings	5,178,000	6,471,000
Commercial Paper	3,503,000	3,200,000
Payables And Accrued Expenses	22,733,000	20,736,000
Current Accrued Expenses	6,709,000	6,785,000
Payables	16,024,000	13,951,000
Total Tax Payable	1,651,000	714,000
Income Tax Payable	851,000	46,000
Accounts Payable	14,373,000	13,237,000
Total Assets	107,904,000	106,274,000
Total Non Current Assets	70,732,000	70,159,000
Other Non Current Assets	804,000	752,000
Goodwill And Other Intangible Assets	32,723,000	32,683,000
Other Intangible Assets	10,244,000	10,416,000
Goodwill	22,479,000	22,267,000
Net PPE	37,205,000	36,724,000
Accumulated Depreciation	-32,200,000	-31,300,000
Gross PPE	69,405,000	68,024,000
Leases
Construction In Progress
Other Properties	69,405,000	68,024,000
Machinery Furniture Equipment
Buildings And Improvements
Land And Improvements
Current Assets	37,172,000	36,115,000
Other Current Assets	1,667,000	1,463,000
Inventory	27,280,000	26,203,000
Finished Goods	27,280,000	26,203,000
Receivables	6,624,000	6,765,000
Other Receivables	565,000	569,000
Accounts Receivable	6,059,000	6,196,000
Cash Cash Equivalents And Short Term Investments	1,601,000	1,684,000
Cash And Cash Equivalents	1,601,000	1,684,000

Cash Flow

	2026	2025	2024
Free Cash Flow	5,188,000	3,112,000
Repayment Of Debt	-2,386,000	-2,205,000
Issuance Of Debt	69,000	4,919,000
Issuance Of Capital Stock	33,000	22,000
Capital Expenditure	-844,000	-898,000
Interest Paid Supplemental Data	638,000	646,000
Income Tax Paid Supplemental Data	180,000	898,000
End Cash Position	1,601,000	1,684,000
Beginning Cash Position	1,389,000	2,804,000
Effect Of Exchange Rate Changes	2,000	-3,000
Changes In Cash	210,000	-1,117,000
Financing Cash Flow	-4,713,000	746,000
Cash Flow From Continuing Financing Activities	-4,713,000	746,000
Net Other Financing Charges	-109,000	-17,000
Cash Dividends Paid	-2,320,000	-2,289,000
Common Stock Dividend Paid	-2,320,000	-2,289,000
Net Common Stock Issuance	33,000	22,000
Common Stock Issuance	33,000	22,000
Net Issuance Payments Of Debt	-2,317,000	3,030,000
Net Short Term Debt Issuance	-961,000	3,200,000
Short Term Debt Payments	-961,000
Short Term Debt Issuance			-1,183,000
Net Long Term Debt Issuance	-1,356,000	-170,000
Long Term Debt Payments	-1,425,000	-2,205,000
Long Term Debt Issuance	69,000	2,035,000
Investing Cash Flow	-1,109,000	-5,873,000
Cash Flow From Continuing Investing Activities	-1,109,000	-5,873,000
Net Other Investing Changes	21,000	40,000
Net Business Purchase And Sale	-286,000	-5,015,000
Purchase Of Business	-286,000	-5,015,000
Capital Expenditure Reported	-844,000	-898,000
Operating Cash Flow	6,032,000	4,010,000
Cash Flow From Continuing Operating Activities	6,032,000	4,010,000
Change In Working Capital	1,402,000	-884,000
Change In Other Working Capital	171,000	-75,000
Change In Other Current Assets	-76,000	439,000
Change In Payables And Accrued Expense	3,771,000	-460,000
Change In Payable	3,771,000	-460,000
Change In Account Payable	3,036,000	-474,000
Change In Tax Payable	735,000	14,000
Change In Income Tax Payable	735,000	14,000
Change In Inventory	-1,435,000	-769,000
Change In Receivables	-1,029,000	-19,000
Other Non Cash Items	82,000	129,000
Stock Based Compensation	178,000	120,000
Depreciation Amortization Depletion	1,081,000	1,044,000
Depreciation And Amortization	1,081,000	1,044,000
Amortization Cash Flow	171,000	158,000
Amortization Of Intangibles	171,000	158,000
Depreciation	910,000	886,000
Net Income From Continuing Operations	3,289,000	3,601,000

📊 Quarterly mode — Graham Fair Value & 7 Criteria require annual data. Switch to Annual for full analysis.

Quarter vs Same Quarter Last Year

YoY strips seasonality

Revenue Growth (YoY)

Prior year: $39.9B ▲ $41.8B +4.8%

Revenue growth vs same quarter last year strips seasonality. Consistent double-digit growth is a Buffett hallmark.

Gross Margin

Prior year: 33.8% ▲ 33.0% -0.8pp

Buffett: consistent gross margin above 40% signals durable pricing power and competitive moat.

Operating Margin

Prior year: 12.5% ▼ 11.9% -0.6pp

Graham: operating margin reflects true business economics before financing. Trend matters as much as level.

Net Margin

Prior year: 8.6% ▼ 7.9% -0.7pp

Net margin can be distorted by one-time items, tax timing, or interest costs — compare to operating margin for signal quality.

Quarterly Health Checks

3 Graham/Buffett criteria that are valid and reliable on quarterly data

✅ Adequate Size

Graham required scale for resilience. Quarterly revenue × 4 gives an annualised proxy.

$41.8B/qtr (≈$167.1B ann.)

vs > $1.5B annualised revenue

❌ Financial Condition

Current assets vs current liabilities — a real-time liquidity snapshot. Valid and reliable on quarterly data.

1.04x current ratio

vs ≥ 2.0x

✅ Free Cash Flow

Buffett's most important single metric. A positive FCF quarter means the business generated real cash for owners after maintaining its asset base.

$5.2B

vs Positive

Operating Cash Flow

$6.0B

Latest quarter · Buffett's cash reality check

ROIC

5.4%

Based on latest annual operating income

Return on Invested Capital — Buffett's preferred measure for asset-light businesses. ROIC > 15% consistently signals a durable competitive advantage (moat). More meaningful than P/B for software, pharma, and consumer brand companies where most value is intangible and off-balance-sheet.

Market Cap / Net Assets

24.0x

Net Assets: $13.9B

Peers & Industry

No auto-detected peers for Home Improvement Retail. You can manually compare HD against any stock using the Compare tool.

"The management of a business is its most important single factor — more important than market position, patents, or financial structure."

— Benjamin Graham

Capital Allocation & Alignment

Insider Ownership

0.07%

Low — management has little skin in the game

Return on Equity (ROE)

23.7%

Excellent — management generates strong returns on equity

Return on Assets (ROA)

3.0%

Fair — average asset utilization

Debt Trend YoY

-3.4% YoY

Debt is declining — management is deleveraging

Leadership Team

Edward Decker

Chairman, President & CEO

Age 62

Pay: $4,208,959

0.128% of net income

Richard McPhail

Executive VP & CFO

Age 54

Pay: $1,970,303

0.060% of net income

Ann-Marie Campbell

Senior Executive Vice President

Age 59

Pay: $2,384,292

0.072% of net income

Jordan Broggi

Executive VP of Customer Experience & President of Online

Age 41

Pay: $1,482,008

0.045% of net income

William Bastek

Executive Vice President of Merchandising

Age 58

Pay: $1,593,452

0.048% of net income

Top Institutional Holders

Institution	% Owned	Shares
Blackrock Inc.	7.89%	78,661,037
Vanguard Capital Management LLC	6.49%	64,687,996
State Street Corporation	4.68%	46,675,858
Vanguard Portfolio Management LLC	2.54%	25,277,177
Geode Capital Management, LLC	2.50%	24,937,966
Morgan Stanley	2.24%	22,369,334
Charles Schwab Investment Management, Inc.	1.71%	17,085,966
Bank of America Corporation	1.64%	16,314,357

⚠️ Very high debt-to-equity — leverage risk

Risk Analysis

Beta (Market Risk)

0.97

Low volatility — more stable than the market

Short Interest

1.3% of float

Low short interest — market is not heavily bearish

Debt-to-Equity

4.59x

High leverage — significant financial risk

Current Ratio

1.04x

Adequate liquidity

52-Week Price Range

Low: $289.10 Current: $334.28 High: $426.75

Currently at 33% of 52-week range

The Home Depot, Inc.

Metric Explanations

Full Graham Analysis

Income Highlights

Balance Sheet Highlights

Cash Flow Highlights

Quarter vs Same Quarter Last Year

Quarterly Health Checks

Operating Cash Flow

ROIC

Market Cap / Net Assets

Peers & Industry

Capital Allocation & Alignment

Leadership Team

Top Institutional Holders

Risk Analysis