The Home Depot, Inc.

Consumer CyclicalHome ImprovementNYSE

$317.45

Market Cap: $316.19B

The Home Depot, Inc. (HD) Valuation Summary

Updated May 8, 2026 23:50

Model	Range	Fair Value	Upside
▸ Discounted Cash Flow
Growth Exit 5Y	$210.60 – $910.91	$353.41	+11.3%
Growth Exit 10Y	$221.76 – $878.05	$357.55	+12.6%
EBITDA Exit 5Y	$285.20 – $562.29	$412.44	+29.9%
EBITDA Exit 10Y	$274.60 – $573.19	$402.70	+26.9%
▸ Trading Multiples
P/E	$327.64 – $382.55	$317.99	+0.2%
EV/EBITDA	$281.19 – $363.65	$309.77	-2.4%
EV/Revenue	$252.29 – $1,472.13	$492.92	+55.3%
▸ PEG
PEG Fair Value	$129.53 – $129.53	$129.53	-59.2%
▸ Earnings Power Value
Earnings Power Value	$156.90 – $266.47	$200.80	-36.7%
▸ Dividend Discount
Dividend Discount	$135.09 – $323.24	$196.70	-38.0%

Valuation History

DCF Analysis

Fair Value

$353.41

Market Price

$317.45

Upside / Downside

+11.3%

Verdict

Undervalued

Using an unlevered Free Cash Flow to Firm (FCFF) model, we project The Home Depot, Inc.'s cash flows over 5 years with line-by-line expense modeling. Revenue is projected revenue growing from 2.2% to 3.4% annually, with expenses (COGS, SG&A, R&D) held at historical ratios. Depreciation is computed from a vintage matrix based on a 5-year useful life. Working capital is modeled using historical turnover days (DSO 10, DPO 41, DIO 82). At a 7.5% WACC with mid-year discounting, the terminal value (78% of enterprise value) is derived from the Gordon Growth Model on Year 6 FCFF at a 2.5% perpetual rate. After subtracting net debt, the equity value implies a fair price of $353.41 per share, suggesting HD is fairly valued by 11.3% at the current price of $317.45.

FCFF Present Value Calculation

WACC

7.55%

3% – 20%

Terminal Growth

2.50%

0% – 6%

Forecast Period

5 Yrs

+ Terminal Year

Adjust parameters to explore scenarios. Changes are for exploration only and do not affect saved valuations.

Currency: USD Millions

	2026	2027	2028	2029	2030	Terminal
Profit Before Tax	24,756	25,204	26,272	27,455	28,393	29,103
(−) Net Interest	2,056	2,094	2,182	2,280	2,358	2,417
(+) D&A	3,215	3,389	3,465	3,549	3,614	3,704
EBITDA	30,027	30,687	31,919	33,284	34,366	35,225

(−) Tax	5,937	6,044	6,300	6,584	6,809	6,979
(−) CapEx	3,436	3,498	3,646	3,811	3,941	4,039
(−) ΔWC	-2,737	311	741	821	652	668
Free Cash Flow (FCFF)	23,391	20,833	21,231	22,069	22,964	23,539

Terminal Value						465,887
WACC / Discount Rate	7.5%
Long-term Growth Rate	2.5%

Timing of FCF (mid year)	0.5	1.5	2.5	3.5	4.5	5
Present Value of FCF	22,555	18,678	17,698	17,104	16,549	323,728

Enterprise Value	416,312
Projection Period	92,584	22.2%
Terminal Value	323,728	77.8%

(−) Current Net Debt	63,961

Equity Value	352,351
(/) Outstanding Shares	997

Fair Price	$353.41

Sensitivity Analysis

WACC \ Terminal Growth Rate	1.5%	2.0%	2.5%	3.0%	3.5%
5.6%	$478	$540	$623	$739	$911
6.6%	$371	$408	$455	$515	$594
7.6%	$300	$324	$353	$389	$434
8.6%	$249	$266	$286	$309	$337
9.6%	$211	$223	$237	$253	$272

Current price: $317.45. Green = undervalued, Red = overvalued.

Fair Value

$357.55

Market Price

$317.45

Upside / Downside

+12.6%

Verdict

Undervalued

Using an unlevered Free Cash Flow to Firm (FCFF) model, we project The Home Depot, Inc.'s cash flows over 10 years with analyst estimates for the first 3–5 years, fading toward long-term GDP growth for the remaining years with line-by-line expense modeling. Revenue is projected revenue growing from 2.2% to 2.9% annually, with expenses (COGS, SG&A, R&D) held at historical ratios. Depreciation is computed from a vintage matrix based on a 5-year useful life. Working capital is modeled using historical turnover days (DSO 10, DPO 41, DIO 82). At a 7.5% WACC with mid-year discounting, the terminal value (61% of enterprise value) is derived from the Gordon Growth Model on Year 11 FCFF at a 2.5% perpetual rate. After subtracting net debt, the equity value implies a fair price of $357.55 per share, suggesting HD is fairly valued by 12.6% at the current price of $317.45.

FCFF Present Value Calculation

WACC

7.55%

3% – 20%

Terminal Growth

2.50%

0% – 6%

Forecast Period

5 Yrs

+ Terminal Year

Adjust parameters to explore scenarios. Changes are for exploration only and do not affect saved valuations.

Currency: USD Millions

	2026	2027	2028	2029	2030	2031	2032	2033	2034	2035	Terminal
Profit Before Tax	24,756	25,204	26,272	27,455	28,393	28,909	29,616	30,381	31,208	32,100	32,903
(−) Net Interest	2,056	2,094	2,182	2,280	2,358	2,401	2,460	2,523	2,592	2,666	2,733
(+) D&A	3,215	3,389	3,465	3,549	3,614	3,666	3,782	3,904	4,018	4,122	4,225
EBITDA	30,027	30,687	31,919	33,284	34,366	34,977	35,857	36,808	37,818	38,889	39,861

(−) Tax	5,937	6,044	6,300	6,584	6,809	6,933	7,102	7,285	7,484	7,698	7,890
(−) CapEx	3,436	3,498	3,646	3,811	3,941	4,012	4,110	4,217	4,331	4,455	4,567
(−) ΔWC	-2,737	311	741	821	652	358	490	531	574	620	635
Free Cash Flow (FCFF)	23,391	20,833	21,231	22,069	22,964	23,674	24,154	24,775	25,429	26,116	26,769

Terminal Value											529,826
WACC / Discount Rate	7.5%
Long-term Growth Rate	2.5%

Timing of FCF (mid year)	0.5	1.5	2.5	3.5	4.5	5.5	6.5	7.5	8.5	9.5	5
Present Value of FCF	22,555	18,678	17,698	17,104	16,549	15,862	15,048	14,350	13,695	13,077	255,818

Enterprise Value	420,434
Projection Period	164,616	39.2%
Terminal Value	255,818	60.8%

(−) Current Net Debt	63,961

Equity Value	356,473
(/) Outstanding Shares	997

Fair Price	$357.55

Sensitivity Analysis

WACC \ Terminal Growth Rate	1.5%	2.0%	2.5%	3.0%	3.5%
5.6%	$502	$556	$628	$729	$878
6.6%	$390	$421	$459	$509	$575
7.6%	$315	$334	$358	$386	$421
8.6%	$262	$275	$289	$307	$328
9.6%	$222	$231	$241	$252	$266

Current price: $317.45. Green = undervalued, Red = overvalued.

Fair Value

$412.43

Market Price

$317.45

Upside / Downside

+29.9%

Verdict

Undervalued

Using an unlevered Free Cash Flow to Firm (FCFF) model, we project The Home Depot, Inc.'s cash flows over 5 years with line-by-line expense modeling. Revenue is projected revenue growing from 2.2% to 3.4% annually, with expenses (COGS, SG&A, R&D) held at historical ratios. Depreciation is computed from a vintage matrix based on a 5-year useful life. Working capital is modeled using historical turnover days (DSO 10, DPO 41, DIO 82). At a 7.5% WACC with mid-year discounting, the terminal value (81% of enterprise value) is derived by applying the industry peer median EV/EBITDA multiple of 15.6x to Year 6 EBITDA. After subtracting net debt, the equity value implies a fair price of $412.44 per share, suggesting HD is undervalued by 29.9% at the current price of $317.45.

FCFF Present Value Calculation

WACC

7.55%

3% – 20%

EV/EBITDA Exit Multiple

15.63x

1x – 40x

Forecast Period

5 Yrs

+ Terminal Year

Adjust parameters to explore scenarios. Changes are for exploration only and do not affect saved valuations.

Currency: USD Millions

	2026	2027	2028	2029	2030	Terminal
Profit Before Tax	24,756	25,204	26,272	27,455	28,393	29,103
(−) Net Interest	2,056	2,094	2,182	2,280	2,358	2,417
(+) D&A	3,215	3,389	3,465	3,549	3,614	3,704
EBITDA	30,027	30,687	31,919	33,284	34,366	35,225

(−) Tax	5,937	6,044	6,300	6,584	6,809	—
(−) CapEx	3,436	3,498	3,646	3,811	3,941	—
(−) ΔWC	-2,737	311	741	821	652	—
Free Cash Flow (FCF)	23,391	20,833	21,231	22,069	22,964	—

Peers' EBITDA Multiple						15.6x
Terminal Value						550,563
WACC / Discount Rate	7.55%

Timing of FCF (mid year)	0.5	1.5	2.5	3.5	4.5	5
Present Value of FCF	22,555	18,678	17,698	17,104	16,549	382,566

Enterprise Value	475,150
Projection Period	92,584	19.5%
Terminal Value	382,566	80.5%

(−) Current Net Debt	63,961
Equity Value	411,189
(÷) Outstanding Shares	997M
Fair Price	$412	+29.9%

Sensitivity Analysis

WACC \ EV/EBITDA Exit Multiple	11.6x	13.6x	15.6x	17.6x	19.6x
5.6%	$347	$400	$454	$508	$562
6.6%	$330	$381	$433	$484	$536
7.6%	$314	$363	$412	$462	$511
8.6%	$299	$346	$393	$440	$487
9.6%	$285	$330	$375	$420	$464

Current price: $317.45. Green = undervalued, Red = overvalued.

Based on default parameters

Fair Value

$402.68

Market Price

$317.45

Upside / Downside

+26.8%

Verdict

Undervalued

Using an unlevered Free Cash Flow to Firm (FCFF) model, we project The Home Depot, Inc.'s cash flows over 10 years with analyst estimates for the first 3–5 years, fading toward long-term GDP growth for the remaining years with line-by-line expense modeling. Revenue is projected revenue growing from 2.2% to 2.9% annually, with expenses (COGS, SG&A, R&D) held at historical ratios. Depreciation is computed from a vintage matrix based on a 5-year useful life. Working capital is modeled using historical turnover days (DSO 10, DPO 41, DIO 82). At a 7.5% WACC with mid-year discounting, the terminal value (65% of enterprise value) is derived by applying the industry peer median EV/EBITDA multiple of 15.6x to Year 11 EBITDA. After subtracting net debt, the equity value implies a fair price of $402.70 per share, suggesting HD is undervalued by 26.9% at the current price of $317.45.

FCFF Present Value Calculation

WACC

7.55%

3% – 20%

EV/EBITDA Exit Multiple

15.63x

1x – 40x

Forecast Period

5 Yrs

+ Terminal Year

Adjust parameters to explore scenarios. Changes are for exploration only and do not affect saved valuations.

Currency: USD Millions

	2026	2027	2028	2029	2030	2031	2032	2033	2034	2035	Terminal
Profit Before Tax	24,756	25,204	26,272	27,455	28,393	28,909	29,616	30,381	31,208	32,100	32,903
(−) Net Interest	2,056	2,094	2,182	2,280	2,358	2,401	2,460	2,523	2,592	2,666	2,733
(+) D&A	3,215	3,389	3,465	3,549	3,614	3,666	3,782	3,904	4,018	4,122	4,225
EBITDA	30,027	30,687	31,919	33,284	34,366	34,977	35,857	36,808	37,818	38,889	39,861

(−) Tax	5,937	6,044	6,300	6,584	6,809	6,933	7,102	7,285	7,484	7,698	—
(−) CapEx	3,436	3,498	3,646	3,811	3,941	4,012	4,110	4,217	4,331	4,455	—
(−) ΔWC	-2,737	311	741	821	652	358	490	531	574	620	—
Free Cash Flow (FCF)	23,391	20,833	21,231	22,069	22,964	23,674	24,154	24,775	25,429	26,116	—

Peers' EBITDA Multiple											15.6x
Terminal Value											623,032
WACC / Discount Rate	7.55%

Timing of FCF (mid year)	0.5	1.5	2.5	3.5	4.5	5.5	6.5	7.5	8.5	9.5	5
Present Value of FCF	22,555	18,678	17,698	17,104	16,549	15,862	15,048	14,350	13,695	13,077	300,821

Enterprise Value	465,437
Projection Period	164,616	35.4%
Terminal Value	300,821	64.6%

(−) Current Net Debt	63,961
Equity Value	401,476
(÷) Outstanding Shares	997M
Fair Price	$403	+26.8%

Sensitivity Analysis

WACC \ EV/EBITDA Exit Multiple	11.6x	13.6x	15.6x	17.6x	19.6x
5.6%	$387	$433	$480	$527	$573
6.6%	$355	$397	$439	$482	$524
7.6%	$325	$364	$403	$441	$480
8.6%	$299	$334	$369	$404	$440
9.6%	$275	$307	$339	$371	$403

Current price: $317.45. Green = undervalued, Red = overvalued.

Based on default parameters

Trading Multiples

Fair Value

$317.99

Market Price

$317.45

Upside / Downside

+0.2%

Verdict

Undervalued

Using the industry peer median P/E Multiples multiple (trailing + forward), The Home Depot, Inc. (HD) has a fair value of $317.99 based on 4 comparable companies in the Home Improvement industry.

P/E Valuation — Home Improvement

USD in millions except Fair Price. Subject company highlighted.

	Mkt Cap ($M)	Trailing P/E	Forward P/E
The Home Depot, Inc.HD	316,498	22.3x	21.1x
McDonald's CorporationMCD	196,011	23.1x	21.0x
Booking Holdings Inc.BKNG	128,576	25.1x	15.8x
Lowe's Companies, Inc.LOW	128,366	19.3x	18.2x
Floor & Decor Holdings, Inc.FND	5,592	26.9x	30.2x
Industry Median		24.1x	19.6x
(*) Profit after tax		14,156	14,981
Equity Value		340,737	293,331
(/) Outstanding shares		997	997
Fair Price		$342	$294

Selected Fair Value (avg of trailing + forward)

$317.99

+0.2%

Fair Value

$309.77

Market Price

$317.45

Upside / Downside

-2.4%

Verdict

Overvalued

Using the industry peer median EV/EBITDA multiple (trailing + forward), The Home Depot, Inc. (HD) has a fair value of $309.77 based on 4 comparable companies in the Home Improvement industry.

EV/EBITDA Valuation — Home Improvement

USD in millions except Fair Price. Subject company highlighted.

	Mkt Cap ($M)	Trailing EV/EBITDA	Forward EV/EBITDA
The Home Depot, Inc.HD	316,498	15.7x	15.1x
McDonald's CorporationMCD	196,011	17.1x	16.0x
Booking Holdings Inc.BKNG	128,576	14.2x	13.0x
Lowe's Companies, Inc.LOW	128,366	12.6x	11.6x
Floor & Decor Holdings, Inc.FND	5,592	17.6x	18.6x
Industry Median		15.6x	14.5x
(*) EBITDA		24,287	25,263
= Enterprise Value		379,621	365,992
(-) Net Debt		63,961	63,961
Equity Value		315,660	302,031
(/) Outstanding shares		997	997
Fair Price		$317	$303

Selected Fair Value (avg of trailing + forward)

$309.77

-2.4%

Fair Value

$492.92

Market Price

$317.45

Upside / Downside

+55.3%

Verdict

Undervalued

Using the industry peer median EV/Revenue multiple (trailing + forward), The Home Depot, Inc. (HD) has a fair value of $492.92 based on 4 comparable companies in the Home Improvement industry.

EV/Revenue Valuation — Home Improvement

USD in millions except Fair Price. Subject company highlighted.

	Mkt Cap ($M)	Trailing EV/Revenue	Forward EV/Revenue
The Home Depot, Inc.HD	316,498	2.3x	2.2x
McDonald's CorporationMCD	196,011	9.3x	8.7x
Booking Holdings Inc.BKNG	128,576	4.9x	4.4x
Lowe's Companies, Inc.LOW	128,366	1.6x	1.4x
Floor & Decor Holdings, Inc.FND	5,592	1.9x	2.0x
Industry Median		3.4x	3.2x
(*) Revenue		164,683	171,299
= Enterprise Value		557,462	553,341
(-) Net Debt		63,961	63,961
Equity Value		493,501	489,380
(/) Outstanding shares		997	997
Fair Price		$495	$491

Selected Fair Value (avg of trailing + forward)

$492.92

+55.3%

PEG Fair Value

Fair Value

$129.53

Market Price

$317.45

Upside / Downside

-59.2%

Verdict

Overvalued

Using the PEG framework with analyst consensus forward EPS growth of 8.6% plus 2.9% dividend yield, the company has a fair value of $129.53 based on NTM EPS (FY2027) of $15.03. The current PEG ratio is 2.45.

PEG Ratio

2.45Expensive

01.02.03.0+

PEG = P/E ÷ (Growth + Yield) = 21.1 ÷ (5.7% + 2.9%) = 2.45

PEG < 1 = bargain, 1–1.5 = fair, > 2 = expensive.

Growth Category: Slow GrowerPEG less reliable

PEG tends to undervalue slow growers — consider dividend yield and asset value instead.

Fair Value Calculation

EPS Growth RateForward	5.7%
Dividend Yield	+2.9%
Adjusted Growth (clamped 8–25%)	8.6%
Fair P/E	8.6x
NTM EPS (FY2027)	$15.03
Fair Value	$129.53

Growth Analysis

Forward GrowthActive

Period	EPS Est.	Growth	Analysts
FY2025 (actual)	$14.23	—	—
FY2027E	$15.03	+5.6%	26
FY2028E	$16.29	+8.4%	25
FY2029E	$17.74	+8.9%	18
FY2030E	$19.17	+8.0%	17
FY2031E	$19.88	+3.7%	8

6Y Forward EPS CAGR: 5.7%

Historical Growth

Year	Net Income	EPS	YoY
FY2021	$16.4B	$15.53	—
FY2022	$17.1B	$16.69	+7.5%
FY2023	$15.1B	$15.11	-9.5%
FY2024	$14.8B	$14.91	-1.3%
FY2025	$14.2B	$14.23	-4.6%

4Y Historical EPS CAGR: -2.2%

Earnings Power Value

Fair Value

$200.80

Market Price

$317.45

Upside / Downside

-36.7%

Verdict

Overvalued

Using the Earnings Power Value framework with a WACC of 7.6% and normalized earnings of $20.0B, the company has a fair value of $200.80 per share. The EPV range is $156.90 – $266.47 based on WACC sensitivity (6.1% – 9.1%).

Currency: USD Millions

	Low	Selected	High
Normalized Earnings	19,950	19,950	19,950
(/) WACC	9.1%	7.6%	6.1%
Enterprise Value	220,387	264,159	329,627
(-) Net debt	63,961	63,961	63,961
Equity Value	156,426	200,198	265,666
(/) Outstanding shares	997	997	997
Fair Price	$156.90	$200.80	$266.47

Dividend Discount Model

Fair Value

$196.70

Market Price

$317.45

Upside / Downside

-38.0%

Verdict

Overvalued

Using the Two-Stage Dividend Discount Model with a Cost of Equity of 8.5% and projected dividend growth of 7.9%, the fair value is $196.70 per share. The DDM range is $135.09 – $323.24 based on sensitivity analysis across Cost of Equity and growth rate assumptions.

Dividend Profile

Current DPS

$9.18

Dividend Yield

2.89%

Payout Ratio

64.7%

Dividend Coverage

1.55x

FCF Payout Ratio72.4%

DPS CAGR (4Y)8.6%

Historical Dividends Per Share

Year	DPS	Payout Ratio	YoY Growth
2025	$9.18	64.7%	+2.1%
2024	$8.99	60.3%	+7.5%
2023	$8.37	55.4%	+10.1%
2022	$7.60	45.5%	+15.1%
2021	$6.60	42.5%	—

Dividend Projections (5-Year)

Year	Projected DPS	Growth	Discount Factor	Present Value
2026	$9.91	7.9%	0.9214	$9.13
2027	$10.69	7.9%	0.8489	$9.08
2028	$11.54	7.9%	0.7822	$9.02
2029	$12.45	7.9%	0.7207	$8.97
2030	$13.44	7.9%	0.6640	$8.92
Terminal Value	$13.77 DPS	2.5%		$151.58

PV of Projected Dividends$45.12

PV of Terminal Value$151.58

Fair Value per Share$196.70

Sensitivity Analysis

Fair value under different Cost of Equity (rows) and DPS Growth Rate (columns) assumptions.

Ke \ Growth	5.9%	6.9%	7.9%	8.9%	9.9%
6.5%	$272	$284	$297	$310	$323
7.5%	$217	$227	$237	$247	$258
8.5%	$181	$189	$197	$205	$214
9.5%	$155	$161	$168	$175	$183
10.5%	$135	$141	$147	$153	$159

Disclaimer: Sweet Value Lab provides estimated intrinsic values for informational purposes only. This is not financial advice. All models rely on assumptions that may not reflect future performance. Always do your own research before making investment decisions.