QS Research · Michael Burry's Scion Capital analyst template · 2006
HOME DEPOT, INC. (HD)
As of 2026-11-06 · 12/15 boxes filled from SEC filings and market data
Conclusion: PASS
Conviction low · base case -5% · downside -22% · upside +34%
Home Depot is less mispriced than de-rated: revenue rose from $132.11B in the fiscal year ended 2021-01-31 to $164.68B in FY2025 and $169.18B TTM, but operating income fell from a $24.04B peak (15.3% margin) in the FY ended 2023-01-29 to $20.89B in FY2025 (12.7%) and $21.02B TTM (12.4%), and Q2 FY2026 comps of +1.7% came with transactions down 1% and ticket up 2.8% — volume is shrinking while price carries the tape. On the TTM base section 13 uses ($24.66B EBITDA, $14.23B net income, $15.10B FCF) the arithmetic lands near today's price: 15.0x EV/EBITDA is $369.90B EV, $320.67B equity, $321/share (-6%), and 23.0x TTM EPS is $327.29B equity, $328/share (-5%), so I use -5% as the base. The downside is $269 (-22%) at LOW's 12.9x EV/EBITDA and roughly $259 (-25%) if the $9.58B of lease liabilities outside the stated EV are capitalized, while the +34% upside ($460) requires GWW's 20.6x multiple from a 0.05-similarity peer — a 1.5:1 skew that does not clear the long rule because the base case is not +30%. With a 24.1x TTM P/E against LOW's 19.2x, forward 22.73x versus an 18.13x industry average, zero buybacks and only 1.2% short interest, there is neither a value discount to buy nor a valuation extreme to short: pass, not watch, because nothing about the price suggests a mispricing is forming.
Key numbers
- Share price: $343.39
- Market cap: $342.60B
- 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
Latest FY2025 10-K shows Home Depot as the world's largest home-improvement retailer, with 2,359 stores at fiscal 2025 year-end and U.S./Canada/Mexico aggregated into one reportable Primary segment. It serves DIY/DIFM consumers and Pros, and the FY2024 SRS and FY2025 GMS acquisitions added specialty-trade distribution, with over 1,250 SRS/GMS locations at end-FY2025. S24 shows revenue of $132.11B in the fiscal year ended 2021-01-31 rising to $164.68B in the fiscal year ended 2026-02-01, with operating income of $18.28B to $20.89B; fiscal year ended 2026-02-01 operating cash flow was $16.32B and capex $3.68B. The oldest FY2020 report had 2,296 stores and described the One Home Depot investment program as largely complete; the latest report emphasizes interconnected fulfillment, the Pro ecosystem and new-store growth.
- ✓ 2. Competitive advantage
The advantage is scale and brand, not lock-in. HD is the world's largest home improvement retailer by fiscal 2025 net sales ($164.68B) with 2,359 stores at FY2025 year-end, and its gross margin sat in a 33.3%-34.0% band in each of the six fiscal years shown even as revenue grew from $132.11B to $164.68B — but operating income fell from $24.04B (FY ended 2023-01-29) to $20.89B (FY2025), i.e. operating margin 15.3% to 12.7%, so the pricing power held while the cost ratio did not. Management names brand, product authority, associates, scale, real estate, digital/supply chain and Pro relationships as its edges, while describing the industry as highly competitive and fragmented and saying online and AI tools are raising competitive entry and price transparency. Nothing in the sources quantifies market share, peer margins, or customer switching costs.
- ✓ 3. 10-Q takeaways
Q2 FY2026 (quarter ended Aug 2, 2026) showed sales up to $47.861B from $45.277B and operating income up to $6.839B from $6.555B; six-month FY2026 sales were $89.626B. Cash generation was strong at $11.422B for the six months, but buybacks remain paused and TTM ROIC fell to 24.8% from 27.2%. Inventory turnover slipped to 4.5x from 4.6x; the provided excerpt gives no comparable-sales metric and no explicit FY2026 guidance, and the risk-factor update says no material changes.
- ✓ 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
- ○ 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.
Sign in with a QuantSignals Premium or Gold plan to read every box: each point linked to the SEC filing it came from, the bull and bear case, and the comparables. QS Research powers the signals behind FST, our autonomous trading agent.