The Home Depot Inc

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HD : NYSE : Services
$132.18 -0.35 | -0.26%
Today's Range: 131.1 - 132.95
Avg. Daily Volume: 5407000.0
12/09/16 - 11:48 AM ET

Financial Analysis

HOME DEPOT INC's gross profit margin for the third quarter of its fiscal year 2016 is essentially unchanged when compared to the same period a year ago. The company managed to grow both sales and net income at a faster pace than the average competitor in its industry this quarter as compared to the same quarter a year ago. HOME DEPOT INC has very weak liquidity. Currently, the Quick Ratio is 0.39 which clearly shows a lack of ability to cover short-term cash needs. The company's liquidity has increased from the same period last year.

At the same time, stockholders' equity ("net worth") has significantly decreased by 26.21% from the same quarter last year. The key liquidity measurements indicate that the company is in a position in which financial difficulties could develop in the near future.

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Income Statement Q3 FY16 Q3 FY15
Net Sales ($mil)23154.021819.0
EBITDA ($mil)3785.03424.0
EBIT ($mil)3343.03001.0
Net Income ($mil)1969.01725.0

Balance Sheet Q3 FY16 Q3 FY15
Cash & Equiv. ($mil)3589.03040.0
Total Assets ($mil)44502.044152.0
Total Debt ($mil)22881.020862.0
Equity ($mil)5622.07619.0

Profitability Q3 FY16 Q3 FY15
Gross Profit Margin34.7334.67
EBITDA Margin16.3415.69
Operating Margin14.4413.75
Sales Turnover2.11.96
Return on Assets17.2615.66
Return on Equity136.6790.78
Debt Q3 FY16 Q3 FY15
Current Ratio1.341.16
Interest Expense247.0248.0
Interest Coverage13.5312.1

Share Data Q3 FY16 Q3 FY15
Shares outstanding (mil)1220.01268.0
Div / share0.690.59
Book value / share4.616.01
Institutional Own % n/a n/a
Avg Daily Volume5367191.04267463.0


BUY. This stock's P/E ratio indicates a discount compared to an average of 22.40 for the Specialty Retail industry and a discount compared to the S&P 500 average of 25.37. For additional comparison, its price-to-book ratio of 28.14 indicates a significant premium versus the S&P 500 average of 2.81 and a significant premium versus the industry average of 13.35. The current price-to-sales ratio is below the S&P 500 average, but above the industry average.

1 2 3 4 5
premium   discount
  Price/Cash Flow
1 2 3 4 5
premium   discount
HD 20.98 Peers 22.40   HD 15.88 Peers 14.15

Average. An average P/E ratio can signify an industry neutral price for a stock and an average growth expectation.

HD is trading at a valuation on par with its peers.


Premium. The P/CF ratio, a stock’s price divided by the company's cash flow from operations, is useful for comparing companies with different capital requirements or financing structures.

HD is trading at a premium to its peers.

1 2 3 4 5
premium   discount
  Price to
1 2 3 4 5
premium   discount
HD 18.09 Peers 21.57   HD 1.32 Peers 2.00

Average. An average price-to-projected earnings ratio can signify an industry neutral stock price and average future growth expectations.

HD is trading at a valuation on par with its peers.


Discount. The PEG ratio is the stock’s P/E divided by the consensus estimate of long-term earnings growth. Faster growth can justify higher price multiples.

HD trades at a significant discount to its peers.

1 2 3 4 5
premium   discount
  Earnings Growth
1 2 3 4 5
lower   higher
HD 28.14 Peers 13.35   HD 15.73 Peers 8.69

Premium. A higher price-to-book ratio makes a stock less attractive to investors seeking stocks with lower market values per dollar of equity on the balance sheet.

HD is trading at a significant premium to its peers.


Higher. Elevated earnings growth rates can lead to capital appreciation and justify higher price-to-earnings ratios.

HD is expected to have an earnings growth rate that significantly exceeds its peers.

1 2 3 4 5
premium   discount
  Sales Growth
1 2 3 4 5
premium   discount
HD 1.69 Peers 1.48   HD 7.68 Peers 7.23

Premium. In the absence of P/E and P/B multiples, the price-to-sales ratio can display the value investors are placing on each dollar of sales.

HD is trading at a premium to its industry on this measurement.


Average. Comparing a company's sales growth to its industry helps to determine if the company is adding or losing market share.

HD is keeping pace with its peers on the basis of sales growth.



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