The Home Depot

Home Improvement · Consumer Cyclical

Price

$338.87

-9.15 (-2.63%)

Market Cap

$337.89B

Winston Score

Winston is serious

Below-average fundamentals — multiple weak pillars.

Share count falling — buybacks

−5.8% over 4y

The company has reduced its share count over this period, returning value to shareholders through buybacks.

Diluted shares outstanding: 1.06B (2022) → 997.0M (2026)

Home Depot is the largest home improvement retailer in the world. It sells tools, lumber, appliances, paint, flooring, and thousands of other products used to build, fix, or upgrade homes. Its customers include everyday homeowners doing weekend projects and professional contractors who buy in large volumes.

The company makes money by selling products in its roughly 2,300 stores across the United States, Canada, and Mexico, plus through its website. Contractors and construction pros make up a growing share of sales, and Home Depot has invested heavily to serve that group better than competitors like Lowe's. The biggest risk the business faces is a slowdown in the housing market — when people stop buying and selling homes, they tend to spend less on renovations, which directly hurts Home Depot's sales.

Winston Score History

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Growth Profile

For growth stock investors

When traditional metrics don't capture the full picture, these are the signals growth stock investors use instead.

Revenue Growth

-3.8% YoY

YoY Growth Rate

Revenue declining

EPS Growth

-14.2% YoY

YoY Growth Rate

Earnings declining

R&D Spend

$0/ year

0.0% of revenue

Below sector average (4%)

Research and development spending

Insider Activity

0.2%ownership

→ Flat

Insiders holding steady — not selling despite ability to

Cash Position

Cash flow positive

$1.4B cash & investments

Quarterly Free Cash Flow

↓ Burn rate worsening

Company generates more cash than it spends — no dilution risk from fundraising

Revenue declining

The Home Depot's revenue is actually shrinking. In a growth stock, that removes the core investment thesis. The low Winston Score here may be warranted — unless there's a turnaround story.

The Winston Score above measures business quality today. Growth stocks often score lower because they invest in the future rather than maximising current profits. These metrics show what matters most for evaluating that future.

Score breakdown

Every number that matters to educated investors.

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Quality

Gross Margin

32.6%

Modest — 32.6% gross margin

Operating Margin

10.1%

Modest — 10.1% operating margin

ROCE

5.6%

Weak — 5.6% return on capital

ROIC between 5% and 15%. They earn 5 to 15 cents back per year on every dollar invested.

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Growth

Sales YoY

+4.1%

Slow sales growth (4.1% YoY)

EPS YoY

-5.1%

Earnings shrinking (-5.1% YoY)

Slight earnings drop. Typical near a cyclical low.

EPS Consistency

2/8 quarters

Earnings rarely grow — volatile business

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Cash Flow

Cash Conversion

122%

Turns 122% of profit into real cash

FCF Margin

7.7%

Modest free cash flow (7.7%)

FCF margin between 0% and 10%. Some cash from sales, but not a lot.

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Stability

Debt / Equity

4.35

Heavy debt load (4.35)

Interest Cover

8.32x

Comfortably covers interest (8.3x)

Interest coverage above 8. Profits cover interest many times over.

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Valuation

P/E Ratio (TTM)

24.5x

Growth-priced — P/E 24.5

P/E above the market average. People are paying up for expected growth.

P/E vs Forward

+4.9

GROWING

Earnings expected to grow meaningfully — cheaper on forward P/E (24.5 → 19.6)

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Dividends

Dividend Yield

2.70%

Moderate income — 2.70% yield

Standard yield zone for stable dividend payers. A meaningful piece of total return.

Dividend Growth

+1.8%

Dividend flat

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