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The Home Depot, Inc. (HD)
Intrinsic Value (DCF)
Current$374.94
→
Intrinsic$262.70
-30%
$156.51$262.70$474.07
Market implies 15% growth for 5 years
HD trades at a premium to our conservative estimate — investors expect above-average performance.
At $375, the market prices in continued high-teens cash flow growth (15%) — likely reflecting buybacks, margin stability, and ecosystem strength.
Range: Bear $157 → Bull $474. Current price implies expectations above the base case, closer to bull expectations.
| Discount ↓Growth → | 4% | 6% | 8% | 10% |
|---|---|---|---|---|
| 8% | $335 | $371 | $410 | $452 |
| 10% | $212 | $237 | $263 | $291 |
| 12% | $148 | $166 | $185 | $205 |
| 14% | $108 | $122 | $137 | $153 |
Bull Case
- Bull case ($474) offers 26% upside at 10% growth, 8% discount
- Conservative 8% growth assumption is achievable based on track record
Bear Case
- Bear case ($157) implies 58% downside at 7% growth, 12% discount
- Price reflects 15% growth expectations vs 8% historical — high bar to clear
- Trading 30% above base case — execution must exceed assumptions to justify
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5-Year Free Cash Flow Projection
Year 1$17.65B
Year 2$19.09B
Year 3$20.64B
Year 4$22.32B
Year 5$24.13B
Terminal$382.35B
📐 Model Inputs
Growth Rate8.1%5Y CAGR (cascade: 5Y→3Y→TTM)
Discount Rate9.5%WACC estimate
Terminal Growth3.0%Perpetuity rate
Base Free Cash Flow$16.32BTTM actual
Bear g×0.8, r+2%
Base Historical CAGR
Bull g×1.2, r−1.5%
DCF estimates based on historical growth rates extrapolated forward. See FAQ below for full methodology.