HD
The Home Depot
Dividend / Cash flow
★ Quality 58/100Price today
$335.59
what the market pays
Worth
$173.70
calculated cycle value
Price is 93% above its value
charlieapp.co
Price vs Intrinsic Value
The line is the price month by month; the green band marks when it's undervalued (−20% off value). When the price drops in there, the discount is real, not opinion.
Where does the value come from?
Established business paying dividends
$218.88
per share
How it's calculated
World's #1 retailer. Exceptional moat. Debt $49B post-SRS/GMS (acquisitionDebt). FCF $12.6B. Buybacks paused until H1 2027. IV floor FCF-based + C12 + L6. Housing recovery + Pro TAM $1.2T catalysts. WAIT.
Net cash in the bank
cash minus financial debt, per share
Total calculated value
business + cash
How many times the cash flow
Dividend / Cash flow · vs 42 peers
You pay 29.6x times this business's cash flow; its sector median is 25.7x.
43% above what Charlie thinks it's worth (17x) — you're overpaying, sector or no sector.
Why Overvalued?
Its free cash flow is $12.88/share × 17.0x multiplier minus $45.18 in negative net cash = $173.70 in intrinsic value. Today's price of $335.59 is 48% above the calculated value — the market is paying a premium over what the model sees as fair.
The price is 93% above the calculated value. You're paying more than it's worth.
Buying here lowers your expected return and wipes out the safety margin.
The next reasonable entry zone starts at $165.01.
At what price would buying make sense?
Entry zones
🟢 Undervalued
≤$138.96
-20% off Value
🟡 Discounted
≤$165.01
-5% off Value
🔴 Today
$335.59
-48% Valor
Overvalued
The market prices it too high versus what the business makes. Patience pays off here.
“Time is the friend of the wonderful company, the enemy of the mediocre.”
— Warren Buffett
Model updated · July 2026
The business
The warehouse 10 miles from every jobsite and every garage in the U.S.
World's largest home improvement retailer with ~2,350 stores across North America. Sells materials, tools, and services to two customers: the DIY and the professional (Pro), the latter ~50% of sales and growing via SRS/GMS. Revenue FY2026: $164.7B, GM 33%.
Logistics scale and store density no competitor can replicate: 90% of the U.S. population lives within 10 miles of a Home Depot. The SRS and GMS acquisition extends reach into the complex Pro (roofing, landscaping, drywall), a fragmented $1.2T TAM where distribution rules.
Revenue history
From $151.2B to $164.7B in 4 years. The business grows steadily.
Where each $100 of sales goes
Revenue $164.7B · FY2026
Of every $100 in sales, $91 goes to costs and operations; $9 is left as net profit (9% margin).
Catalysts and risks
Housing turnover recovery (~4M annual sales, a 30-year low) unlocks deferred projects.
SRS/GMS integration: penetration into large Pro, a segment where HD still has <5% share of the $1.2T TAM.
Buybacks return in H1 2027 after digesting the $49B in acquisition debt; historical $8-10B/year.
Debt $55.4B against cash of $1.4B: if rates stay high, the refi weighs on FCF.
Negative comparables: average ticket holds up but transactions have been falling for two years.
Amazon and specialized Pro distributors (Ferguson, Fastenal) erode margins in specific categories.
Charlie's note
“A spectacular business buying a good business with expensive debt at the worst point of the housing cycle. The price is pricing in patience — if you have it, normalized FCF pays for the wait.”
Analysis · May 2026
So when would be a good price for The Home Depot?
By our calculation, not yet. We will email you the day it drops to $165.01 — so you do not have to keep checking.
🔔 Email meFree · no card
Charlie informs, it doesn't advise. No information should be taken as a recommendation to buy or sell.