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Recent attention on Home Depot (HD) has centered on its push toward AI tools for professional contractors and its acquisitions such as SRS Distribution, as well as bullish options activity that has helped keep investor interest firmly on the stock.
See our latest analysis for Home Depot.
At a share price of US$383.77, Home Depot has logged a 9.72% 1 month share price return and a 10.97% year to date share price return, while its 1 year total shareholder return of 5.11% decline contrasts with 3 and 5 year total shareholder returns of 30.79% and 60.06%. This suggests recent momentum is building after a softer year.
If Home Depot’s push into AI tools has caught your eye, you might also want to see which other high growth tech and AI stocks are drawing attention right now.
With shares near US$383 and only a modest gap to recent analyst targets, the key question is simple: are you looking at an opportunity to pick up Home Depot before its next chapter, or is the market already pricing in future growth?
With Home Depot last closing at $383.77 against a narrative fair value of about $394.12, the current setup hinges on how the market treats its long term earnings power and required return of roughly 8.9%.
The company’s targeted acquisitions (SRS, pending GMS) and continued expansion of its Pro customer ecosystem are positioning Home Depot as the supplier of choice for complex, higher-ticket projects, which is set to increase market share, customer lifetime value, and organic revenue growth over time.
Read the complete narrative.
Curious what justifies that premium fair value over today’s price? The narrative leans on steady sales expansion, firmer margins, and a richer future earnings multiple. Want to see exactly how those pieces fit together?
Result: Fair Value of $394.12 (UNDERVALUED)
Have a read of the narrative in full and understand what’s behind the forecasts.
However, there are clear watchpoints, including softer big ticket project demand and ongoing margin pressure from higher costs and a lower margin wholesale mix, that could challenge this upbeat setup.
Find out about the key risks to this Home Depot narrative.
While the narrative fair value sits around $394.12 and suggests a small 2.6% upside, our DCF model paints a very different picture. On that measure, Home Depot at $383.77 screens as expensive versus an estimated future cash flow value of about $277.80. Which lens do you trust more for a long term view?
Look into how the SWS DCF model arrives at its fair value.
HD Discounted Cash Flow as at Jan 2026
Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Home Depot for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover 871 undervalued stocks based on their cash flows. If you save a screener we even alert you when new companies match – so you never miss a potential opportunity.
If that view does not quite fit how you see Home Depot, you can pull up the same data, shape your own thesis in minutes, and Do it your way
A great starting point for your Home Depot research is our analysis highlighting 2 key rewards and 2 important warning signs that could impact your investment decision.
If Home Depot sparked a few questions, do not stop there. Use the Simply Wall St Screener to spot fresh ideas that fit how you like to invest.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
Companies discussed in this article include HD.
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