Yahoo Finance Should You Think About Buying The Home Depot, Inc. (NYSE:HD) Now?
The Home Depot, Inc. (NYSE:HD) saw a decent share price growth in the teens level on the NYSE over the last few months. With many analysts covering the large-cap stock, we may expect any price-sensitive announcements have already been factored into the stock’s share price. However, could the stock still be trading at a relatively cheap price? Let’s examine Home Depot’s valuation and outlook in more detail to determine if there’s still a bargain opportunity.
Check out our latest analysis for Home Depot
What Is Home Depot Worth?
The stock seems fairly valued at the moment according to my valuation model. It’s trading around 9.74% above my intrinsic value, which means if you buy Home Depot today, you’d be paying a relatively reasonable price for it. And if you believe that the stock is really worth $291.20, there’s only an insignificant downside when the price falls to its real value. In addition to this, Home Depot has a low beta, which suggests its share price is less volatile than the wider market.
What does the future of Home Depot look like?
Future outlook is an important aspect when you’re looking at buying a stock, especially if you are an investor looking for growth in your portfolio. Although value investors would argue that it’s the intrinsic value relative to the price that matter the most, a more compelling investment thesis would be high growth potential at a cheap price. Though in the case of Home Depot, it is expected to deliver a relatively unexciting earnings growth of 7.7%, which doesn’t help build up its investment thesis. Growth doesn’t appear to be a main reason for a buy decision for the company, at least in the near term.
What This Means For You
Are you a shareholder? HD’s future growth appears to have been factored into the current share price, with shares trading around its fair value. However, there are also other important factors which we haven’t considered today, such as the financial strength of the company. Have these factors changed since the last time you looked at the stock? Will you have enough confidence to invest in the company should the price drop below its fair value?
Are you a potential investor? If you’ve been keeping tabs on HD, now may not be the most optimal time to buy, given it is trading around its fair value. However, the positive outlook means it’s worth further examining other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.
So if you'd like to dive deeper into this stock, it's crucial to consider any risks it's facing. While conducting our analysis, we found that Home Depot has 2 warning signs and it would be unwise to ignore them.
If you are no longer interested in Home Depot, you can use our free platform to see our list of over 50 other stocks with a high growth potential.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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