MODEL VERDICT
The Home Depot, Inc. (HD) — Relative Valuation
Peer multiples, Monte Carlo simulation & quality-adjusted fair value
Popular:
Peer multiples, Monte Carlo simulation & quality-adjusted fair value
Composite score derived from valuation, quality, and risk factors
Quantitative model thresholds · For educational and research purposes only
Each row records the model's monthly assessment. High Conviction = the model detected notable undervaluation vs peers. Neutral = no notable divergence was found. The return column shows the actual price change over 90 days for reference. This is a quantitative observation log — not investment advice.
| Date | Assessment | Score | Price | Status | 90d Fwd Return |
|---|---|---|---|---|---|
| Feb 28, 2026 | NEUTRAL | 0.31 | $380.72 | CURRENT | — |
| Feb 21, 2026 | NEUTRAL | 0.37 | $382.25 | CURRENT | — |
| Feb 14, 2026 | NEUTRAL | 0.35 | $391.05 | CURRENT | — |
| Feb 11, 2026 | NEUTRAL | 0.38 | $389.68 | CURRENT | — |
| Jan 11, 2026 | NEUTRAL | 0.18 | $374.64 | Below threshold | +1.7% |
Historical model observations for research purposes only. Past quantitative patterns do not predict future results. Not a recommendation to buy, sell, or hold any security.
| Methodology | Fair Value | vs Current | Weight | Quality | Status |
|---|---|---|---|---|---|
| Forward P/E 5 analyst estimates | $316.17 | -17.0% | 20% | A- | Analyst Est. |
| EV/EBITDA 5 industry peers | $265.94 | -30.1% | 20% | A- | Peer Data |
| Industry Median P/E 4 industry peers | $293.74 | -22.8% | 15% | A | Peer Data |
| Price / Free Cash Flow 5 industry peers | $202.46 | -46.8% | 15% | B+ | Peer Data |
| EV/EBIT 5 industry peers | $319.58 | -16.1% | 8% | B+ | Peer Data |
| EV/FCF 5 industry peers | $253.98 | -33.3% | 7% | B | Model Driven |
| Peg Ratio 3 industry peers | $59.23 | -84.4% | 5% | B | Data |
| EV To Revenue 4 industry peers | $240.24 | -36.9% | 4% | B | Data |
| Price / Sales 4 industry peers | $199.83 | -47.5% | 3% | B | Model Driven |
| Earnings Yield 5 industry peers | $317.56 | -16.6% | 2% | B | Data |
| FCF Yield 5 industry peers | $203.76 | -46.5% | 1% | B | Data |
| Weighted Output Blended model output | $414.80 | +8.9% | 100% | 74 | SLIGHTLY UNDERVALUED |
| EPS Growth ↓ | P/E Multiple → | 23× | 25× | 27× (Current) | 29× | 31× |
|---|---|---|---|---|---|
| Bear Case (2%) | $334 | $363 | $392 | $421 | $450 |
| Conservative (5%) | $344 | $374 | $403 | $433 | $463 |
| Base Case (3.6%) | $339 | $369 | $398 | $428 | $457 |
| Bull Case (5%) | $343 | $373 | $403 | $432 | $462 |
Cross-sectional regression predicting expected multiples based on growth, margins, ROIC, and beta.
| Multiple | Avg | Median | Min | Max | Std |
|---|---|---|---|---|---|
| P/E Ratio | 23.20 | 22.94 | 18.93 | 26.72 | 2.73 |
| EV/EBIT | 18.17 | 17.61 | 15.45 | 20.96 | 1.96 |
| EV/EBITDA | 15.93 | 15.48 | 13.75 | 18.65 | 1.68 |
| P/FCF | 24.12 | 23.66 | 17.49 | 31.35 | 5.01 |
| P/FFO | 19.22 | 18.88 | 16.12 | 22.76 | 2.15 |
| P/AFFO | 23.29 | 22.90 | 19.09 | 26.25 | 2.50 |
| P/B Ratio | 142.32 | 86.80 | 26.77 | 332.61 | 126.43 |
| Div Yield | 0.02 | 0.02 | 0.02 | 0.03 | 0.00 |
| P/S Ratio | 2.30 | 2.17 | 2.06 | 2.90 | 0.29 |
Based on our peer multiples analysis with 28 valuation metrics, the model estimates HD's fair value at $414.80 vs the current price of $380.72, implying +8.9% upside potential. Model verdict: Slightly Undervalued. Confidence: 74/100. This is a quantitative estimate, not a recommendation.
The blended fair value of $414.80 is calculated using four lenses: industry median multiples (40%), historical multiples (30%), forward estimates (20%), and quality-adjusted multiples (10%). Monte Carlo simulation (10,000 iterations) gives a range of $269.20 (P10) to $324.51 (P90), with a median of $296.38.
HD's current P/E of 26.8x compares to the industry median of 20.6x (4 peers in the group). This represents a +29.6% premium to the industry. The historical average P/E is 23.2x over 7 years. Signal: Premium.
61 analysts cover HD with a consensus rating of Buy. The consensus price target is $414.92 (range: $320.00 — $497.00), implying +9.0% upside from the current price. Grade breakdown: Strong Buy (1), Buy (37), Hold (19), Sell (4), Strong Sell (0).
The model confidence score is 74/100, based on: data completeness (30), peer quality (20), historical depth (20), earnings stability (15), and model agreement (4). Cyclicality penalty: --15 points. The model shows strong agreement across inputs.
The model flags several key risks: (1) Multiple compression: HD trades at the 5000th percentile of its historical P/E range. A reversion to median (23.2×) would imply significant downside. (2) Macro/regulatory risks are not captured in this model but remain material.
Peak earnings risk refers to the possibility that HD's current profitability is above its sustainable long-term trend. The model detects a margin Z-score of -1.7σ, meaning margins are 1.7 standard deviations below their historical average. If margins revert to the 7-year mean (14.2%), the model estimates fair value drops by 4330.0% to approximately $545. This isn't a prediction — it's a scenario analysis.
No. This dashboard is a quantitative research tool for educational and informational purposes only. It is not investment advice, a solicitation, or a recommendation to buy, sell, or hold any security. The operator of this platform is not a registered investment advisor (RIA), broker-dealer, or financial planner. All model outputs, fair value estimates, signals, and scenarios are the result of automated quantitative computations and should not be construed as professional financial guidance. You should consult a qualified, licensed financial advisor before making any investment decisions. Past model performance is not indicative of future results.