Retail-Lumber & Other Building Materials Dealers
The Home Depot, Inc. operates as a home improvement retailer. It sells various building materials, home improvement products, lawn and garden products, and décor products, as well as facilities maintenance, repair, and operations products. The company also offers installation services for flooring, water heaters, bath, garage doors, cabinets, cabinet makeovers, countertops, sheds, furnaces and central air systems, and windows. In addition, it provides tool and equipment rental services. The company primarily serves homeowners; and professional renovators/remodelers, general contractors, maintenance professionals, handymen, property managers, and building service contractors, as well as specialty tradesmen, such as electricians, plumbers, and painters. It also sells its products through websites, including homedepot.com; homedepot.ca and homedepot.com.mx; blinds.com, an online site for custom window coverings; and thecompanystore.com, an online site for textiles and décor products, as well as through The Home Depot stores. The Home Depot, Inc. was founded in 1977 and is based in Atlanta, Georgia.
Discounted Cash Flow Valuation of Home Depot, Inc.
In the chart Earnings are multiplied by this value.
High margins render the company resilient under dire circumstances, hence able to drive competitors out or acquire them. ROE and ROA measure the average flow generated by each invested dollar. Their marginal value is a forecast of future growth, and it is considered by Buffett and Munger the most important single indicator.
The average Net Margin over the past 5 years is +10.08%.
The trend of Net Margin over the past 5 years is +0.37%.
The average ROA over the past 5 years is +31.52%.
The trend of ROA over the past 5 years is -0.68%.
The average ROE over the past 5 years is +26.12%.
The trend of ROE over the past 5 years is +60.81%.
Being debt the number one cause of investment losses and company death, the ratio Debt/FCF is of utmost importance to guarantee safety. On the other hand the Graham’s stability measures the drawdown of earnings, hence indicating the reliability of the flow generated by the company.
The Debt/FCF trailing twelve month is 2.36.
The trend of Debt/FCF over the past 5 years is 0.18.
Graham’s Stability measure stands at 1.00.
Growth can be dangerous when forecasting, simply projecting the current growth is in general wrong. A company passes through multiple phases, from being young and unprofitable, to the first periods of profitability and high growth, until it arrives at a period of regime with limited growth. Identifying in which phase the company is in may help forecasting.
The Revenue CAGR over the past 5 years is +9.3%.
The trend of Revenue growth rate over the past 5 years is +0.66%.
The Earnings CAGR over the past 5 years is +14.66%.
The trend of Earnings growth rate over the past 5 years is -0.15%.
The Equity CAGR over the past 5 years is +1.44%.
The trend of Equity growth rate over the past 5 years is -12.18%.
The FCF CAGR over the past 5 years is +2.55%.
The trend of FCF growth rate over the past 5 years is -2.15%.