Home Depot: Valuation Is Ahead Of Earnings

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Caffital Research
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(8min)

Summary

  • The Home Depot, Inc.'s long-term earnings growth track record has been strong as the company has expanded its retail network.
  • The recent weakness in the housing industry, and in the consumer sentiment, have driven an earnings hiccup in recent quarters. The macro-driven issues should slowly start to subside.
  • While Home Depot's growth outlook stands quite good, the valuation is too expensive at the current stock level.

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The Home Depot, Inc. (NYSE:HD) operates as the largest home improvement retailer in the United States and other countries with a total of 2340 retail stores. With Home Depot’s fairly consistent growth and good capital efficiency, the stock has

This article was written by

Caffital Research profile picture
1.05K Followers
I am an avid investor with a major focus on small cap companies with experience in investing in US, Canadian, and European markets. My investment philosophy to generating great returns on the stock market revolves around identifying mispriced securities by understanding the drivers behind a company's financials, and ultimately, most often revealed by a DCF model valuation. This methodology doesn't limit an investor into rigid traditional value, dividend, or growth investing, but rather accounts for all of a stock's prospects to determine the risk-to-reward.

Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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