QS Research · Michael Burry's Scion Capital analyst template · 2006
HOME DEPOT, INC. (HD)
As of 2026-11-08 · 13/15 boxes filled from SEC filings and market data
Conclusion: WATCH
Conviction low · base case none · downside -11% · upside +5%
HD is a high-quality scale retailer with strong cash flow, but the market is not missing that: at $343.47 it carries the company's own 15.9x TTM EV/EBITDA and 24.1x TTM P/E on $14.23B TTM net income, a premium to LOW at 12.7x/19.0x, while FY2026 operating income of $20.89B remains below the FY2023 peak of $24.04B and guidance is only flat-to-2% comps with EPS growth flat to +4.0%. Holding the 15.9x multiple on $24.66B TTM EBITDA with $49.22B net debt gives the base case at today's price; a 10% EBITDA decline gives (15.9 x $22.19B - $49.22B)/997.69M = $304.2, -11.4%, while a 4% rise gives (15.9 x $25.65B - $49.22B)/997.69M = $359.4, +4.6%. The asymmetry is not enough for a short because the base case is not -30% or lower, and there is no 30%+ long base with downside no worse than -25%, so this is a watch: quality and dividend are real, but the multiple already capitalizes them.
Key numbers
- Share price: $343.47
- Market cap: $342.68B
- Latest financial period: TTM to Aug 2, 2026
- Revenue (TTM): $169.18B
- EV / EBITDA (TTM): 15.9x
- P/E (TTM): 24.1x
- Price / book: 20.62x
The 15 boxes
- ✓ 1. Long-form business notes
HD is a store-and-online home improvement retailer: the FY2025 10-K reports 2,359 stores, one reportable segment, and sales to DIY, DIFM and Pro customers. For the fiscal year ended 2026-02-01, XBRL data show revenue $164.68B, operating income $20.89B and net income $14.16B, with operating cash flow $16.32B and capex $3.68B. The disclosure set changed from the oldest provided 10-K (fiscal 2020: One Home Depot, HD Supply MRO) to the latest (SRS in FY2024, GMS in FY2025, SRS over 1,250 locations); operating income peaked at $24.04B in fiscal year ended 2023-01-29 and was lower in the latest year.
- ✓ 2. Competitive advantage
Durable advantage rests on scale and brand, not on margin momentum. HD calls itself the world's largest home improvement retailer on fiscal 2025 net sales with 2,359 stores at fiscal year-end, and names brand, product authority, scale, real estate, supply chain and Pro relationships as its distinct advantages. The record supports scale but shows a thinning operating result: gross profit rose from $44.85B (FY2021) to $54.87B (FY2026) while operating income fell from a $24.04B peak (FY2023) to $20.89B (FY2026), with intangible amortization up from $179.0M to $607.0M over the same span. Competition is described as highly fragmented, with digital and AI tools lowering entry barriers and raising price transparency.
- ✓ 3. 10-Q takeaways
Q2 fiscal 2026 (quarter ended 2026-08-02) sales rose 5.7% to $47.9 billion with comparable sales up 1.7% (U.S. +1.3%), but expense growth outran sales: gross profit +6.5% against SG&A +8.5% left operating income up only 4.3% to $6.839 billion, and first-half operating income of $11.820 billion was up just 1.1% on 5.3% sales growth. Diluted EPS was $4.79 ($4.92 adjusted) versus $4.58 ($4.68 adjusted). The quarter's sales growth came mostly from the SRS/Other segment ($5.055 billion vs $3.120 billion) while the retail Primary segment grew to $42.806 billion from $42.157 billion. Cash generation was strong ($11.4 billion operating cash flow in six months), buybacks remain paused since March 2024, and FY2026 guidance was reaffirmed in full numeric form.
- ✓ 4. Corporate governance
Filled; members read this box.
- ✓ 5. Overview of the prior 3 years of 8-K filings
Filled; members read this box.
- ✓ 6. Other significant filings
Filled; members read this box.
- ✓ 7. Chronology of significant news and events
Filled; members read this box.
- ✓ 8. Comparables valuation interpretation
Filled; members read this box.
- ✓ 9. Insider trading interpretation
Filled; members read this box.
- ○ 10. Earnings-call notes
- ✓ 11. Impression of the shareholder letter
Filled; members read this box.
- ○ 12. Scuttlebutt overview
- ✓ 13. Valuation and risk/reward summary
Filled; members read this box.
- ✓ 14. Current price suppression and potential catalysts
Filled; members read this box.
- ✓ 15. Conclusions
The call above.
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