Intrinsic value of Home Depot - HD

Previous Close

$195.39

  Intrinsic Value

$101.50

stock screener

  Rating & Target

sell

-48%

Previous close

$195.39

 
Intrinsic value

$101.50

 
Up/down potential

-48%

 
Rating

sell

We calculate the intrinsic value of HD stock by summing up the current values of future distributable cash flows generated by the company and dividing the sum by the number of outstanding shares. As such, the intrinsic value calculation depends entirely on projections. The more accurate your projections of the company's performance are - the more reliable is the intrinsic value calculation result. Please make sure to check the stock valuation input data below and adjust it if necessary. The quality of the output (intrinsic valuation result) is only as good as the quality of the input. See also DISCLAIMERS.

STOCK VALUATION INPUT DATA

Revenue (in 2018), $M
Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Variable cost ratio, %
Fixed operating expenses, $M
Interest rate on debt, %
Effective corporate tax rate, %
Production assets / Revenue, %
Life of production assets, yrs
Working capital / Revenue, %
Revenue / Adjusted assets
Adjusted equity ratio
Cash flow adjustment, % of Revenue
Book value of equity, $M
Shares outstanding, mln
Market capitalization, $bln 230.2

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
   2019
   2020
   2021
   2022
   2023
   2024
   2025
   2026
   2027
   2028
   2029
   2030
   2031
   2032
   2033
   2034
   2035
   2036
   2037
   2038
   2039
   2040
   2041
   2042
   2043
   2044
   2045
   2046
   2047
   2048

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  6.70
  6.53
  6.38
  6.24
  6.12
  6.00
  5.90
  5.81
  5.73
  5.66
  5.59
  5.53
  5.48
  5.43
  5.39
  5.35
  5.32
  5.28
  5.26
  5.23
  5.21
  5.19
  5.17
  5.15
  5.14
  5.12
  5.11
  5.10
  5.09
  5.08
Revenue, $m
  107,665
  114,695
  122,009
  129,622
  137,549
  145,807
  154,414
  163,391
  172,756
  182,531
  192,740
  203,405
  214,552
  226,207
  238,397
  251,151
  264,500
  278,475
  293,109
  308,438
  324,497
  341,325
  358,963
  377,452
  396,836
  417,163
  438,479
  460,836
  484,288
  508,890
Variable operating expenses, $m
  86,224
  91,840
  97,682
  103,762
  110,094
  116,690
  123,565
  130,735
  138,215
  146,024
  153,950
  162,469
  171,372
  180,682
  190,418
  200,606
  211,268
  222,430
  234,119
  246,363
  259,190
  272,632
  286,720
  301,488
  316,971
  333,207
  350,233
  368,091
  386,823
  406,474
Fixed operating expenses, $m
  5,620
  5,744
  5,870
  5,999
  6,131
  6,266
  6,404
  6,545
  6,689
  6,836
  6,986
  7,140
  7,297
  7,458
  7,622
  7,789
  7,961
  8,136
  8,315
  8,498
  8,685
  8,876
  9,071
  9,271
  9,474
  9,683
  9,896
  10,114
  10,336
  10,564
Total operating expenses, $m
  91,844
  97,584
  103,552
  109,761
  116,225
  122,956
  129,969
  137,280
  144,904
  152,860
  160,936
  169,609
  178,669
  188,140
  198,040
  208,395
  219,229
  230,566
  242,434
  254,861
  267,875
  281,508
  295,791
  310,759
  326,445
  342,890
  360,129
  378,205
  397,159
  417,038
Operating income, $m
  15,821
  17,112
  18,457
  19,860
  21,324
  22,851
  24,445
  26,111
  27,852
  29,672
  31,804
  33,796
  35,883
  38,068
  40,357
  42,756
  45,271
  47,909
  50,675
  53,577
  56,622
  59,818
  63,172
  66,693
  70,391
  74,273
  78,350
  82,632
  87,129
  91,853
EBITDA, $m
  18,632
  20,092
  21,613
  23,199
  24,852
  26,578
  28,379
  30,260
  32,225
  34,280
  36,429
  38,678
  41,032
  43,497
  46,078
  48,784
  51,619
  54,592
  57,709
  60,979
  64,410
  68,009
  71,787
  75,752
  79,915
  84,285
  88,873
  93,692
  98,752
  104,066
Interest expense (income), $m
  924
  1,460
  1,443
  1,593
  1,750
  1,914
  2,084
  2,261
  2,445
  2,638
  2,839
  3,048
  3,267
  3,496
  3,735
  3,985
  4,246
  4,520
  4,806
  5,106
  5,420
  5,749
  6,093
  6,454
  6,832
  7,229
  7,645
  8,081
  8,538
  9,017
  9,520
Earnings before tax, $m
  14,361
  15,669
  16,864
  18,110
  19,410
  20,767
  22,185
  23,666
  25,214
  26,833
  28,755
  30,529
  32,387
  34,333
  36,372
  38,510
  40,751
  43,102
  45,569
  48,157
  50,873
  53,724
  56,718
  59,861
  63,162
  66,628
  70,269
  74,094
  78,112
  82,333
Tax expense, $m
  3,877
  4,231
  4,553
  4,890
  5,241
  5,607
  5,990
  6,390
  6,808
  7,245
  7,764
  8,243
  8,744
  9,270
  9,820
  10,398
  11,003
  11,638
  12,304
  13,002
  13,736
  14,506
  15,314
  16,162
  17,054
  17,990
  18,973
  20,005
  21,090
  22,230
Net income, $m
  10,484
  11,439
  12,311
  13,220
  14,169
  15,160
  16,195
  17,276
  18,406
  19,588
  20,991
  22,286
  23,642
  25,063
  26,551
  28,112
  29,748
  31,465
  33,265
  35,155
  37,137
  39,219
  41,404
  43,699
  46,108
  48,639
  51,297
  54,089
  57,022
  60,103

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total assets, $m
  47,513
  50,616
  53,843
  57,203
  60,701
  64,345
  68,144
  72,105
  76,238
  80,552
  85,057
  89,764
  94,683
  99,826
  105,206
  110,835
  116,725
  122,893
  129,351
  136,115
  143,203
  150,629
  158,413
  166,572
  175,126
  184,096
  193,503
  203,370
  213,719
  224,576
Adjusted assets (=assets-cash), $m
  47,513
  50,616
  53,843
  57,203
  60,701
  64,345
  68,144
  72,105
  76,238
  80,552
  85,057
  89,764
  94,683
  99,826
  105,206
  110,835
  116,725
  122,893
  129,351
  136,115
  143,203
  150,629
  158,413
  166,572
  175,126
  184,096
  193,503
  203,370
  213,719
  224,576
Revenue / Adjusted assets
  2.266
  2.266
  2.266
  2.266
  2.266
  2.266
  2.266
  2.266
  2.266
  2.266
  2.266
  2.266
  2.266
  2.266
  2.266
  2.266
  2.266
  2.266
  2.266
  2.266
  2.266
  2.266
  2.266
  2.266
  2.266
  2.266
  2.266
  2.266
  2.266
  2.266
Average production assets, $m
  25,839
  27,527
  29,282
  31,109
  33,012
  34,994
  37,059
  39,214
  41,461
  43,808
  46,258
  48,817
  51,492
  54,290
  57,215
  60,276
  63,480
  66,834
  70,346
  74,025
  77,879
  81,918
  86,151
  90,588
  95,241
  100,119
  105,235
  110,601
  116,229
  122,134
Working capital, $m
  5,922
  6,308
  6,711
  7,129
  7,565
  8,019
  8,493
  8,986
  9,502
  10,039
  10,601
  11,187
  11,800
  12,441
  13,112
  13,813
  14,547
  15,316
  16,121
  16,964
  17,847
  18,773
  19,743
  20,760
  21,826
  22,944
  24,116
  25,346
  26,636
  27,989
Total debt, $m
  26,715
  29,507
  32,412
  35,436
  38,584
  41,864
  45,283
  48,848
  52,567
  56,450
  60,505
  64,741
  69,168
  73,797
  78,638
  83,704
  89,006
  94,556
  100,369
  106,457
  112,835
  119,519
  126,524
  133,868
  141,567
  149,640
  158,106
  166,986
  176,300
  186,072
Total liabilities, $m
  42,762
  45,554
  48,459
  51,483
  54,631
  57,911
  61,330
  64,895
  68,614
  72,497
  76,552
  80,788
  85,215
  89,844
  94,685
  99,751
  105,053
  110,603
  116,416
  122,504
  128,882
  135,566
  142,571
  149,915
  157,614
  165,687
  174,153
  183,033
  192,347
  202,119
Total equity, $m
  4,751
  5,062
  5,384
  5,720
  6,070
  6,435
  6,814
  7,211
  7,624
  8,055
  8,506
  8,976
  9,468
  9,983
  10,521
  11,083
  11,673
  12,289
  12,935
  13,612
  14,320
  15,063
  15,841
  16,657
  17,513
  18,410
  19,350
  20,337
  21,372
  22,458
Total liabilities and equity, $m
  47,513
  50,616
  53,843
  57,203
  60,701
  64,346
  68,144
  72,106
  76,238
  80,552
  85,058
  89,764
  94,683
  99,827
  105,206
  110,834
  116,726
  122,892
  129,351
  136,116
  143,202
  150,629
  158,412
  166,572
  175,127
  184,097
  193,503
  203,370
  213,719
  224,577
Debt-to-equity ratio
  5.620
  5.830
  6.020
  6.190
  6.360
  6.510
  6.650
  6.770
  6.900
  7.010
  7.110
  7.210
  7.310
  7.390
  7.470
  7.550
  7.630
  7.690
  7.760
  7.820
  7.880
  7.930
  7.990
  8.040
  8.080
  8.130
  8.170
  8.210
  8.250
  8.290
Adjusted equity ratio
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  10,484
  11,439
  12,311
  13,220
  14,169
  15,160
  16,195
  17,276
  18,406
  19,588
  20,991
  22,286
  23,642
  25,063
  26,551
  28,112
  29,748
  31,465
  33,265
  35,155
  37,137
  39,219
  41,404
  43,699
  46,108
  48,639
  51,297
  54,089
  57,022
  60,103
Depreciation, amort., depletion, $m
  2,811
  2,980
  3,156
  3,338
  3,529
  3,727
  3,933
  4,149
  4,374
  4,608
  4,626
  4,882
  5,149
  5,429
  5,722
  6,028
  6,348
  6,683
  7,035
  7,403
  7,788
  8,192
  8,615
  9,059
  9,524
  10,012
  10,523
  11,060
  11,623
  12,213
Funds from operations, $m
  13,295
  14,419
  15,466
  16,559
  17,698
  18,887
  20,128
  21,425
  22,780
  24,197
  25,617
  27,168
  28,791
  30,492
  32,273
  34,140
  36,096
  38,148
  40,300
  42,557
  44,925
  47,411
  50,019
  52,757
  55,632
  58,651
  61,820
  65,149
  68,645
  72,316
Change in working capital, $m
  372
  387
  402
  419
  436
  454
  473
  494
  515
  538
  561
  587
  613
  641
  670
  701
  734
  769
  805
  843
  883
  926
  970
  1,017
  1,066
  1,118
  1,172
  1,230
  1,290
  1,353
Cash from operations, $m
  12,923
  14,032
  15,064
  16,140
  17,262
  18,433
  19,655
  20,931
  22,265
  23,659
  25,056
  26,581
  28,178
  29,851
  31,602
  33,438
  35,362
  37,379
  39,495
  41,714
  44,042
  46,485
  49,049
  51,741
  54,566
  57,533
  60,648
  63,919
  67,355
  70,963
Maintenance CAPEX, $m
  -2,418
  -2,584
  -2,753
  -2,928
  -3,111
  -3,301
  -3,499
  -3,706
  -3,921
  -4,146
  -4,381
  -4,626
  -4,882
  -5,149
  -5,429
  -5,722
  -6,028
  -6,348
  -6,683
  -7,035
  -7,403
  -7,788
  -8,192
  -8,615
  -9,059
  -9,524
  -10,012
  -10,523
  -11,060
  -11,623
New CAPEX, $m
  -1,661
  -1,687
  -1,755
  -1,827
  -1,902
  -1,982
  -2,066
  -2,154
  -2,248
  -2,346
  -2,450
  -2,560
  -2,675
  -2,797
  -2,926
  -3,061
  -3,204
  -3,354
  -3,512
  -3,679
  -3,854
  -4,039
  -4,233
  -4,437
  -4,652
  -4,878
  -5,116
  -5,366
  -5,628
  -5,905
Cash from investing activities, $m
  -4,079
  -4,271
  -4,508
  -4,755
  -5,013
  -5,283
  -5,565
  -5,860
  -6,169
  -6,492
  -6,831
  -7,186
  -7,557
  -7,946
  -8,355
  -8,783
  -9,232
  -9,702
  -10,195
  -10,714
  -11,257
  -11,827
  -12,425
  -13,052
  -13,711
  -14,402
  -15,128
  -15,889
  -16,688
  -17,528
Free cash flow, $m
  8,844
  9,761
  10,556
  11,385
  12,249
  13,150
  14,090
  15,071
  16,096
  17,167
  18,225
  19,396
  20,621
  21,904
  23,248
  24,656
  26,131
  27,677
  29,299
  31,000
  32,785
  34,658
  36,624
  38,688
  40,855
  43,130
  45,520
  48,030
  50,666
  53,436
Issuance/(repayment) of debt, $m
  -313
  2,792
  2,905
  3,024
  3,148
  3,280
  3,419
  3,565
  3,720
  3,883
  4,055
  4,236
  4,427
  4,629
  4,842
  5,066
  5,302
  5,550
  5,812
  6,088
  6,378
  6,684
  7,005
  7,343
  7,699
  8,073
  8,466
  8,880
  9,314
  9,771
Issuance/(repurchase) of shares, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash from financing (excl. dividends), $m  
  -313
  2,792
  2,905
  3,024
  3,148
  3,280
  3,419
  3,565
  3,720
  3,883
  4,055
  4,236
  4,427
  4,629
  4,842
  5,066
  5,302
  5,550
  5,812
  6,088
  6,378
  6,684
  7,005
  7,343
  7,699
  8,073
  8,466
  8,880
  9,314
  9,771
Total cash flow (excl. dividends), $m
  8,531
  12,553
  13,461
  14,408
  15,397
  16,430
  17,508
  18,636
  19,815
  21,049
  22,279
  23,632
  25,049
  26,533
  28,090
  29,721
  31,433
  33,228
  35,112
  37,089
  39,164
  41,342
  43,630
  46,031
  48,554
  51,203
  53,986
  56,910
  59,981
  63,207
Retained Cash Flow (-), $m
  -3,297
  -310
  -323
  -336
  -350
  -364
  -380
  -396
  -413
  -431
  -451
  -471
  -492
  -514
  -538
  -563
  -589
  -617
  -646
  -676
  -709
  -743
  -778
  -816
  -855
  -897
  -941
  -987
  -1,035
  -1,086
Prev. year cash balance distribution, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash flow adjustment, $m
  303
  323
  344
  366
  389
  413
  437
  463
  490
  518
  548
  578
  610
  644
  679
  715
  753
  793
  835
  879
  925
  973
  1,024
  1,077
  1,132
  1,191
  1,251
  1,315
  1,383
  1,453
Cash available for distribution, $m
  5,234
  12,243
  13,138
  14,072
  15,047
  16,065
  17,128
  18,240
  19,402
  20,618
  21,829
  23,161
  24,557
  26,019
  27,552
  29,158
  30,844
  32,611
  34,466
  36,412
  38,455
  40,600
  42,851
  45,216
  47,699
  50,306
  53,046
  55,923
  58,946
  62,121
Discount rate, %
  7.70
  8.09
  8.49
  8.91
  9.36
  9.83
  10.32
  10.83
  11.38
  11.95
  12.54
  13.17
  13.83
  14.52
  15.25
  16.01
  16.81
  17.65
  18.53
  19.46
  20.43
  21.45
  22.52
  23.65
  24.83
  26.07
  27.38
  28.75
  30.18
  31.69
PV of cash for distribution, $m
  4,860
  10,480
  10,289
  10,001
  9,620
  9,154
  8,613
  8,010
  7,357
  6,671
  5,950
  5,248
  4,560
  3,899
  3,279
  2,710
  2,198
  1,749
  1,363
  1,040
  775
  564
  401
  277
  186
  122
  77
  47
  28
  16
Current shareholders' claim on cash, %
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0

The Home Depot, Inc. (The Home Depot) is a home improvement retailer. The Company sells an assortment of building materials, home improvement products, and lawn and garden products, and provides various services. The Home Depot stores serves three primary customer groups: do-it-yourself (DIY) customers, do-it-for-me (DIFM) customers and professional customers. Its DIY customers are home owners purchasing products and completing their own projects and installations. The Company assists these customers with specific product and installation questions both in its stores and through online resources and other media designed to provide product and project knowledge. Its DIFM customers are home owners purchasing materials themselves and hiring third parties to complete the project or installation. Professional Customers are primarily professional renovators/remodelers, general contractors, repairmen, installers, small business owners and tradesmen.

FINANCIAL RATIOS  of  Home Depot (HD)

Valuation Ratios
P/E Ratio 29.5
Price to Sales 2.5
Price to Book 54.2
Price to Tangible Book
Price to Cash Flow 24
Price to Free Cash Flow 28.8
Growth Rates
Sales Growth Rate 6.9%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 7.9%
Cap. Spend. - 3 Yr. Gr. Rate 3.1%
Financial Strength
Quick Ratio 2
Current Ratio 0
LT Debt to Equity 515.8%
Total Debt to Equity 544.7%
Interest Coverage 15
Management Effectiveness
Return On Assets 20.1%
Ret/ On Assets - 3 Yr. Avg. 18.5%
Return On Total Capital 28.7%
Ret/ On T. Cap. - 3 Yr. Avg. 26.1%
Return On Equity 149.4%
Return On Equity - 3 Yr. Avg. 99.1%
Asset Turnover 2.2
Profitability Ratios
Gross Margin 34.2%
Gross Margin - 3 Yr. Avg. 34.2%
EBITDA Margin 16.3%
EBITDA Margin - 3 Yr. Avg. 15.6%
Operating Margin 14.2%
Oper. Margin - 3 Yr. Avg. 13.4%
Pre-Tax Margin 13.2%
Pre-Tax Margin - 3 Yr. Avg. 12.5%
Net Profit Margin 8.4%
Net Profit Margin - 3 Yr. Avg. 8%
Effective Tax Rate 36.3%
Eff/ Tax Rate - 3 Yr. Avg. 36.4%
Payout Ratio 42.8%

HD stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the HD stock intrinsic value calculation we used $100904 million for the last fiscal year's total revenue generated by Home Depot. The default revenue input number comes from 2018 income statement of Home Depot. You may change it if you feel that it should be adjusted for some unusual circumstances that are not expected to be repeated in the future or if you already know (from interim financial statements, for example) that this year's revenue is going to be quite different.

Revenue growth rate. Forecasted future revenue growth rate is the most important input parameter for the intrinsic value calculation. Unlike other input parameters that are reasonably expected to be in line with their historic averages or their historic trends, the revenue growth rate by and large is a wild card: nobody really knows what the company's revenue will be in the future. Of course, the level of unpredictability is different for different industries (utility companies being the most predictable and, thus, less risky).
    We use three input parameters to forecast the revenue growth rate in our HD stock valuation model: a) initial revenue growth rate of 6.7% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 7.7%, whose default value for HD is calculated based on our internal credit rating of Home Depot, is applied to the cash flow expected to be received a year from now (well, actually, to be precise, in the financial year following the base year - the last year for which we have financial statements). For each consecutive year the discount rate is multiplied by the discount rate multiplier of 1.05, e.i. each year it increases by 5%. Feel free to change this number to correspond to your level of risk assessment of Home Depot.
    By the way, it is easy to set the discount rate to be constant (this would make comparison with other valuation models easier): just set the discount rate multiplier equal to 1 and chose the magnitude of the initial discount rate to your liking.

Variable cost ratio is the ratio of variable costs (i.e. costs that fluctuate with fluctuation of the volume of production) to the revenue expressed as a percentage. In the calculation of intrinsic value of HD stock the variable cost ratio is equal to 80.1%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $5499 million in the base year in the intrinsic value calculation for HD stock. These expenses increase with the level of inflation in subsequent years.

Interest rate on debt is the average all-in rate of interest paid by the company on its debt. It is set at 5.4% for Home Depot.

Corporate tax rate of 27% is the nominal tax rate for Home Depot. In reality, companies find ways to pay much less taxes than that or not to pay them at all.

Cash flow adjustment could be used for any adjustment the investor deems necessary. Most commonly we use this field to account for stock options-related effects in excess of what is reported on the company's income statement. The cash flow adjustment is expressed as a percentage of the revenue, and in the current valuation of the HD stock is equal to 0.3%.

Production assets are the company's assets used for manufacturing products or provision of services. In the valuation model input table they are expressed as a percentage of revenue and for HD are equal to 24%.

Life of production assets of 10 years is the average useful life of capital assets used in Home Depot operations. It is used to calculate yearly capital expenditures needed to keep these assets in good order - we call it the maintenance CAPEX.

Working capital is the difference between the company's current assets and liabilities. In the model we use the ratio of working capital to revenue, which for HD is equal to 5.5%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $1454 million for Home Depot - is used in calculation of the "floor" for intrinsic valuation based on the discounted cash flow (DCF) method. Even if the prospects are very bad for a company, its assets could always be sold now for their current fair market value.

Shares outstanding of 1178 million for Home Depot is needed to calculate the intrinsic value of one share.

Market capitalization is used here only for reference purposes and as a quick check that the share price and the number of shares outstanding numbers are correct - something especially to be cognizant about at stock splits. So, the market capitalization of Home Depot at the current share price and the inputted number of shares is $230.2 billion.

RELATED COMPANIES Price Int.Val. Rating
LOW Lowe's 97.68 67.26  sell
SHOS Sears Hometown 2.35 2.95  hold

COMPANY NEWS

▶ [$$] Consumer Spending Lifts Retailers   [Aug-16-18 07:39PM  The Wall Street Journal]
▶ AP Top Extended Financial Headlines at 11:16 p.m. EDT   [Aug-15-18 11:16PM  Associated Press]
▶ What Home Depot Wants You to Know   [07:00PM  Motley Fool]
▶ Redfin Reports Housing Market Troubles   [12:38PM  Motley Fool]
▶ [$$] Home Depot Raises the Roof   [Aug-14-18 08:43PM  The Wall Street Journal]
▶ [$$] Home Depot Raises Guidance as Profit Soars   [08:43PM  The Wall Street Journal]
▶ Day Ahead: Top 3 Things to Watch   [06:40PM  Investing.com]
▶ What Happened in the Stock Market Today   [05:01PM  Motley Fool]
▶ [$$] Home Depot Raises Guidance as Profit Soars   [04:48PM  The Wall Street Journal]
▶ How to Play Home Depot Post Earnings   [04:42PM  Bloomberg Video]
▶ How to Play Home Depot Post Earnings   [04:42PM  Bloomberg]
▶ The 3 Stocks on the MFM Team's Radar   [03:34PM  Motley Fool]
▶ Home Depot roars back in the second quarter   [02:51PM  Associated Press]
▶ [$$] Home Depot Raises the Roof   [12:21PM  The Wall Street Journal]
▶ Home Depot Earnings, Revenue Beat in Q2   [09:22AM  Investing.com]
▶ Home Depot Proves Its No Fixer-Upper   [08:44AM  Bloomberg]
▶ Day Ahead: Top 3 Things to Watch   [Aug-13-18 07:30PM  Investing.com]
▶ Home Depot's Q2 Earnings Preview   [02:15PM  Benzinga]
▶ Home Depot Reports Under Negative Charts   [08:33AM  Investopedia]
▶ Economic Calendar - Top 5 Things To Watch This Week   [Aug-12-18 09:46AM  Investing.com]
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