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The Home Depot, Inc. (HD) stock analysis

Home Depot rebounds about 10% in a month but stays below its 200-day average ahead of Nov 17 earnings

Home Depot closed at 318.50 on Oct 27, 2026, up 9.87% over one month but down 17.63% over one year. The forward P/E of 19.99 is above the sector median of 16.38, while revenue growth and next-year EPS growth rank in the bottom quarter of peers. Earnings on Nov 17 come with options pricing a 5.28% implied move.

  • Price: 318.50
  • Market Cap (USD): $316.59B
  • P/E: 22.25×
  • Fwd P/E: 19.99×
  • Div Yield: 2.92%
  • 1Y Return: -17.63%
  • Next Earnings: Nov 17, 2026
  • Mean Target: 365.73
  • Rating: Buy

Bull case

  • Latest-quarter revenue growth was 5.71% year over year, and the last reported EPS of 4.92 beat consensus by 4.02%, the third straight beat.
  • Return on invested capital is 21.54% (65th percentile of US Consumer Discretionary), with free cash flow of $15.10B and a free cash flow yield of 4.77%.
  • Analysts' mean target of 365.73 is 14.83% above the price, and the consensus label is Buy across 21 analysts.

Bear case

  • Price is 4.95% below the 200-day average of 335.08, the 50-day average sits 7.72% below the 200-day average, and the death cross dates to Dec 4, 2025.
  • Debt to equity is 3.77×, in the 94th percentile of the sector, and the quick ratio is 0.31×; the payout ratio is 65.01%.
  • Annual EPS has slipped from 16.69 in fiscal 2022 to 14.23 in fiscal 2025, and next year's EPS growth of 6.23% sits in the 16th percentile of peers.

What to watch

  • Q3 earnings on Nov 17, 2026 before market open; consensus EPS is 3.83 and options imply a 5.28% move.
  • 200-day average at 335.08 and 50-day average at 309.21 as trend reference levels.
  • 20-day high of 327.92 (Oct 22) and 52-week low of 277.15; the 52-week high is 397.63.
  • Short interest, which rose to 12.2M shares (1.23% of float) on Oct 15, 2026.

General

Home Depot sells building materials and home improvement products and is a Dow Jones member with a $316.59B market cap. The stock has recovered in October but remains well below its 52-week high. Valuation is above sector medians while growth ranks low, and analysts lean positive.

Business

The company sells building materials, home improvement products, lawn and garden and décor products, plus installation services and tool rental. It operates in the U.S., Canada and Mexico. The U.S. accounted for 92.40% of fiscal 2025 revenue. Appliances (8.93%) and Power (8.40%) were the largest product lines.

Recent performance

TTM revenue is $169.18B with an operating margin of 12.43%, down 0.66% over a year. Q2 FY2026 revenue was 47.86B against 45.28B a year earlier. Earnings of 4.92 per share on Aug 18, 2026 beat consensus of 4.73, and the stock moved 1.90% that day.

Valuation and analysts

The forward P/E of 19.99 (based on next fiscal year consensus EPS) compares with the industry median of 13.82 and the sector median of 16.38. The dividend yield is 2.92%. Analysts' mean target is 365.73. Stifel cut its target to 322 from 346 on Oct 26, 2026.

Market signals

The one-year return is -17.63% and the relative strength rating is 34. Short interest is low at 1.23% of float, in the 5th percentile of the sector. Insiders made 4 sales and no purchases in the last 90 days.

Long-term investor

Returns on capital are strong and the dividend has grown for 16 years, but growth has been modest and EPS is below its fiscal 2022 level. Leverage is high and the valuation is above peers.

Growth durability

Revenue grew 4.51% a year over five years and 1.52% over three. EPS fell at a 5.18% three-year rate. Fiscal 2025 revenue was 164.68B versus 157.40B in fiscal 2022, while EPS was 14.23 versus 16.69. Quarterly revenue has risen for 2 straight quarters.

Margins and returns

ROIC is 21.54% against a sector median of 15.37%. ROE is 104.30%, inflated by thin equity of 16.62B. Gross margin is 33.21% and operating margin is 12.43%, both near sector medians. Operating margin fell 0.66% over one year.

Balance sheet and cash returns

Total debt is 62.57B and net debt to EBITDA is 2.37×, with interest coverage of 8.70×. Dividends of 9.15B were paid in fiscal 2025 and no shares were repurchased, versus 7.95B in fiscal 2023. The dividend per share is 9.29 and the payout ratio is 65.01%.

Valuation and ownership

Forward P/E is 19.99 (67th percentile) and EV/EBITDA is 14.80×. Consensus EPS is 15.00 for this fiscal year and 15.93 for next. Institutional ownership is 77.46%, up 4.03% over three months. Insiders sold and did not buy in the last 90 days.

Swing trader

The stock is bouncing sharply off its 277.15 low, above its 20- and 50-day averages but still below the 200-day. Momentum indicators are positive, though volume has faded in the latest sessions and earnings fall within three weeks.

Trend and momentum

Price of 318.50 is 5.95% above the 20-day average (300.61) and 3.00% above the 50-day (309.21), but 4.95% below the 200-day (335.08). RSI is 61.03, MACD is 4.63 above its signal of 1.06, and ADX is 31.14, indicating a defined trend.

Recent sessions

The stock rose from 285.77 on Oct 7 to a 327.73 close on Oct 22 on 5.5M shares, then eased to 319.83, 319.38 and 318.50. Volume on Oct 27 was 3.5M, 0.67× the average. The 8-day average is 315.35.

Levels and volatility

The 20-day high is 327.92 and the Bollinger upper band is 330.23. The 20-day and 52-week low is 277.15. ATR is 7.05, or 2.21% of price. The 52-week high is 397.63. Relative strength rating is 34.

Catalysts and flow

Earnings are on Nov 17, 2026 before market open. No ex-dividend date falls before then in the facts. Short interest was 12.2M shares on Oct 15, up 6.25%. Stifel cut its target on Oct 26; there were no upgrades or downgrades in 30 days.

Options

Implied volatility is elevated relative to its own history and above realized volatility, with the term structure inverted ahead of earnings. Liquidity is good, though activity is currently below average.

Volatility level

30-day implied volatility is 33.33%, with a 52-week rank of 73 and percentile of 88, within a 20.20% to 38.09% range. It is up 5.1 points over 20 days. The 30-day IV is 1.20× the 30-day realized volatility of 27.69%, a premium of 4.8 points.

Term structure and skew

Term structure is in backwardation: 30-day IV is 33.33%, 60-day 30.71% and 90-day 29.57%, a slope of -3.8 points, consistent with the earnings event in the front month. The 25-delta skew is -3.7 points.

Earnings and expected moves

The implied earnings move is 5.28%, versus a four-quarter average actual move of 3.11% and an eight-quarter maximum of 6.57%. The ratio of implied to average is 2.22×. Average IV crush is 14.61%. The 30-day expected move is 9.55%.

Premium yields and liquidity

For the Nov 27 expiry (31 days), the 30-delta put at 305.00 pays 5.99, an annualized cash-secured yield of 23.12%. The 30-delta call at 335.00 pays 6.05, an annualized yield of 22.37%. The liquidity score is 90; volume is 0.59× its 20-day average.

Analysis written October 28, 2026 from Qanvo data as of October 27, 2026. AI-generated, for information only; not investment advice.