Market Pulse59Neutral

The Home Depot, Inc.Opportunity Rank #229(HD) Intrinsic Value & DCF Analysis (2026)

Current Price

$322.64

Last updated: May 08, 2026

Price vs Intrinsic Value

$322.64
Price
$336.32
Intrinsic Value
Undervalued by 4%MOS: $269.06

Fundamental Score

38/100
Bearish

Weighted across 6 signals

Narrative Score

58/100
Improving

No change vs previous

Trend Score

21/100
Weak

As of 2026-05-08

The intrinsic value of The Home Depot, Inc. (HD) is estimated at $336.32 per share based on a 10-year discounted cash flow (DCF) analysis. At the current price of $322.64, the stock appears undervalued relative to its projected cash flow fundamentals. This estimate assumes a 4.58% long-term growth rate and an 8.31% discount rate, reflecting expected future free cash flow and cost of capital.

The intrinsic value of The Home Depot, Inc. (HD) is estimated at $336.32 per share based on a 10-year discounted cash flow (DCF) analysis. At the current price of $322.64, the stock appears undervalued relative to its projected cash flow fundamentals. This estimate assumes a 4.58% long-term growth rate and an 8.31% discount rate, reflecting expected future free cash flow and cost of capital.

Valuation Details

$336.32
▲ 4.24% upside
20% margin of safety: $269.06
Years: 10Growth Rate: 4.58%
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Capital Efficiency

Average Quarterly ROIC
6.56%
Cost of Capital (estimated)11%
Value StatusUnderperforming Capital

The company is earning below its required return. This may indicate inefficient use of capital or excess cash that isn't being reinvested.

Complete historical ROIC is available with
.

Fundamental Details

38/100
BearishWeighted across 6 signals
DCF Discount
4.2% discount to price
57
FCF Yield
6.2% trailing FCF yield
100
ROIC vs WACC
ROIC 6.6% vs WACC 11.0% (0.6x)
30
Net Debt / FCF
2.7x net debt to FCF
8
Buybacks
Share count growing
30
FCF CAGR (5Y)
-0.6% 5Y FCF CAGR (adjusted)
0
Strengths: FCF Yield. Concerns: ROIC vs WACC, Net Debt / FCF.

Narrative Details

58/100
Improving
Vs 6-Month Baseline:Low (9th pct)Weighted across 5 recent drivers
Trend: StableConfidence: 85%Updated: 16h ago
Sources: 173 (157 News · 16 Analyst)
Drivers(last 30 days)
86 news sentiment+0.8
68 regulatory scrutiny-0.0
Downgrade headlines-0.0
2 upgrade headlines-0.0
16 analyst reiterations0.0

Trend Details

21/100
WeakAs of 2026-05-08311 daily bars used
3M Relative Strength vs SPY-24.4%
6M Relative Strength vs SPY-23.9%
Price vs 50 EMA-6.1%
Price vs 21 EMA30 · -3.4%
Price vs 50 EMA22 · -6.1%
21 EMA vs 50 EMA28 · -2.9%
3M RS vs SPY2 · -24.4%
6M RS vs SPY7 · -23.9%
Distance from 52W High50 · -25.0%

Investment Coach

Updating... 1d ago
AVOIDConfidence: 62%
Thesis
The Home Depot, Inc. shows weak fundamentals with returns trailing its cost of capital despite a healthy free cash flow yield, and its valuation is near fair value, suggesting patience is warranted. Current conditions do not support investment, as the company’s ROIC is significantly below its WACC and free cash flow growth is negative.
Key Risk
The primary risk is that the company’s returns on invested capital remain below its weighted average cost of capital, undermining value creation.
Signals To Watch
  • Price moves to at least a mid-teens discount to fair value.
  • Sustained improvement in ROIC versus WACC spread.
  • Meaningful shifts in the narrative score direction.
Ask the Coach - Available with
Historical Growth Rates
Free Cash Flow- - -Trend CAGR: 4.58%5 Year CAGR (Adjusted): -0.64%

Free Cash Flow (in millions)

TTM2025202420232022202120202019201820172016201520142013201220112010200920082007
$20,004$23,295$24,398$17,734$19,137$21,302$16,401$15,607$13,928$11,404$10,876$9,684$9,017$8,287$7,872$5,681$6,091$7,375$9,285$11,203

How Intrinziq Estimates Fair Value

Intrinziq estimates The Home Depot, Inc.'s intrinsic value using a discounted cash flow (DCF) model based on free cash flow trends and a market-based discount rate. The model projects future cash flows over ten years and discounts them using a market return assumption to estimate fair value.

The Home Depot, Inc.Consumer Cyclical

The Home Depot, Inc. operates as a home improvement retailer. It operates The Home Depot stores that sell 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, cabinets and cabinet makeovers, countertops, 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, building service contractors, and specialty tradesmen, such as electricians, plumbers, and painters. It also sells its products through websites, including homedepot.com; blinds.com, an online site for custom window coverings; and thecompanystore.com, an online site for textiles and décor products. As of December 31, 2021, the company operated 2,317 stores in the United States. The Home Depot, Inc. was incorporated in 1978 and is based in Atlanta, Georgia.