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Home Depot Stock Up 10% in 3 Months: Is Holding Still the Best Move?
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Key Takeaways
Home Depot shares rose 10.4% in three months, beating the S&P 500 and Retail-Wholesale sector.
Strength came from Pro demand, digital growth, and reaffirmed 2025 sales and margin outlook.
HD trades at a premium P/S multiple of 2.41 versus peers like Lowe's and Floor & Decor.
Shares of The Home Depot, Inc. (HD - Free Report) , a prominent player in the home improvement sector, have witnessed a decent run on the bourses, climbing nearly 10.4% over the past three months. This steady rise has prompted investors to investigate whether the stock still has room to run or if it’s time to lock in gains.
Resilient demand from professional contractors, ongoing productivity initiatives and disciplined capital allocation have underpinned the recent strength. Home Depot’s ability to balance growth investments with shareholder returns has kept it in focus, even as the broader home improvement market navigates changing market dynamics.
Home Depot closed at $407.71 yesterday, trailing the industry’s 11.9% gain but outperforming the S&P 500 and the Retail-Wholesale sector, which rose 8.8% and 5.9%, respectively, over the same period.
Home Depot Stock 3-Month Performance
Image Source: Zacks Investment Research
Compared with its peers, Home Depot has outperformed Floor & Decor Holdings, Inc. (FND - Free Report) but trailed Lowe's Companies, Inc. (LOW - Free Report) and FGI Industries Ltd. (FGI - Free Report) . Over the past three months, shares of Floor & Décor, Lowe’s, and FGI Industries have advanced 8.3%, 14.6% and 19.4%, respectively.
Even so, Home Depot remains technically strong. The stock is trading above both its 50-day and 200-day moving averages, a sign of sustained momentum and price stability.
HD Stock Trades Above 50 &200-Day Moving Averages
Image Source: Zacks Investment Research
A Sneak Peek Into Home Depot Stock
Home Depot continues to present itself as a compelling investment opportunity, driven by its market-leading position and ability to effectively serve both DIY customers and professional contractors. Management’s decision to reaffirm its full-year outlook despite a mixed macro backdrop demonstrates confidence in both near-term demand trends and the company’s long-term growth trajectory. For fiscal 2025, Home Depot expects total sales growth of about 2.8% on a 52-week basis, comparable sales growth of roughly 1% and an adjusted operating margin of 13.4%. The company also plans to open around 13 new stores during the year, showing that capital is being deployed toward both expansion and operational improvements.
A key factor supporting the bullish case is the improving sales momentum through the most recent quarter. Second-quarter sales rose 4.9% year over year to $45.3 billion, with 1% growth in overall comparable sales and 1.4% in the United States. Monthly comps moved from a 0.3% decline in May to a 3.1% gain in July, signaling improving consumer engagement and setting a positive tone for the remainder of the fiscal year. Twelve of the sixteen merchandise categories posted positive comparable sales growth, with strength in building materials, appliances, garden supplies, plumbing and electrical. Big-ticket comp transactions above $1,000 also grew 2.6%, while the average ticket size rose 1.4%.
Home Depot’s digital transformation is another pillar of its growth strategy. Online comparable sales climbed about 12% in the quarter, driven by faster same-day and next-day delivery capabilities and enhanced digital tools such as AI-powered search and “buy-it-again” functionality. These initiatives are boosting customer satisfaction and engagement, with management noting that customers using these services have demonstrated a double-digit increase in spending and purchase frequency. This strong digital adoption is supporting Home Depot’s efforts to build a seamless omnichannel shopping experience and improve productivity across its network.
The professional, or Pro, customer segment continues to be a major growth driver. Several thousand Pro customers are now using Home Depot’s trade credit facilities, with spending levels rising by double digits after activation. The SRS acquisition, completed a year ago, is already exceeding expectations in both growth and synergy realization, while the pending GMS acquisition will add more than 1,200 locations, 3,500 sales associates and nearly 8,000 delivery trucks capable of handling tens of thousands of job-site deliveries each day. These efforts are strengthening Home Depot’s leadership in specialty distribution and enabling capital-light growth through a wider network of distribution centers.
While Home Depot remains a strong operator, there are still reasons for caution. The company continues to face pressure from a softer environment for big-ticket renovations, particularly those requiring financing, as homeowners remain cautious amid economic uncertainty. This weakness in large discretionary projects, coupled with declining operating margins, rising expenses and elevated interest costs, limits near-term earnings potential despite ongoing efforts to expand capabilities in the Pro segment. It anticipates a decline in earnings per share of about 3% compared with the prior year, or 2% on an adjusted basis.
How Consensus Estimates Stack Up for HD
Over the past 30 days, the Zacks Consensus Estimate for the current fiscal year has edged down by a cent to $15.03, while the estimate for the next fiscal year has declined by 7 cents to $16.36.
Image Source: Zacks Investment Research
Unlocking Home Depot’s Valuation
Home Depot currently trades at a forward 12-month price-to-sales (P/S) multiple of 2.41, which positions it at a premium compared to the industry’s average of 1.71. The stock is also trading above its median P/S level of 2.35, observed over the past year.
This premium positioning is especially notable when compared to peers like Lowe’s (with a forward 12-month P/S ratio of 1.67), Floor & Decor (1.69) and FGI Industries (0.06).
Image Source: Zacks Investment Research
How to Play HD Stock: Buy, Hold or Sell?
Given Home Depot’s recent run-up and the mix of supportive growth drivers alongside near-term headwinds, current shareholders may consider maintaining their positions for now. The company’s strategic initiatives, digital transformation and professional customer expansion offer long-term promise, but ongoing margin pressures, earnings softness and macro uncertainty suggest waiting for clearer signs of demand recovery before considering fresh exposure. Home Depot currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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Home Depot Stock Up 10% in 3 Months: Is Holding Still the Best Move?
Key Takeaways
Shares of The Home Depot, Inc. (HD - Free Report) , a prominent player in the home improvement sector, have witnessed a decent run on the bourses, climbing nearly 10.4% over the past three months. This steady rise has prompted investors to investigate whether the stock still has room to run or if it’s time to lock in gains.
Resilient demand from professional contractors, ongoing productivity initiatives and disciplined capital allocation have underpinned the recent strength. Home Depot’s ability to balance growth investments with shareholder returns has kept it in focus, even as the broader home improvement market navigates changing market dynamics.
Home Depot closed at $407.71 yesterday, trailing the industry’s 11.9% gain but outperforming the S&P 500 and the Retail-Wholesale sector, which rose 8.8% and 5.9%, respectively, over the same period.
Home Depot Stock 3-Month Performance
Image Source: Zacks Investment Research
Compared with its peers, Home Depot has outperformed Floor & Decor Holdings, Inc. (FND - Free Report) but trailed Lowe's Companies, Inc. (LOW - Free Report) and FGI Industries Ltd. (FGI - Free Report) . Over the past three months, shares of Floor & Décor, Lowe’s, and FGI Industries have advanced 8.3%, 14.6% and 19.4%, respectively.
Even so, Home Depot remains technically strong. The stock is trading above both its 50-day and 200-day moving averages, a sign of sustained momentum and price stability.
HD Stock Trades Above 50 &200-Day Moving Averages
Image Source: Zacks Investment Research
A Sneak Peek Into Home Depot Stock
Home Depot continues to present itself as a compelling investment opportunity, driven by its market-leading position and ability to effectively serve both DIY customers and professional contractors. Management’s decision to reaffirm its full-year outlook despite a mixed macro backdrop demonstrates confidence in both near-term demand trends and the company’s long-term growth trajectory. For fiscal 2025, Home Depot expects total sales growth of about 2.8% on a 52-week basis, comparable sales growth of roughly 1% and an adjusted operating margin of 13.4%. The company also plans to open around 13 new stores during the year, showing that capital is being deployed toward both expansion and operational improvements.
A key factor supporting the bullish case is the improving sales momentum through the most recent quarter. Second-quarter sales rose 4.9% year over year to $45.3 billion, with 1% growth in overall comparable sales and 1.4% in the United States. Monthly comps moved from a 0.3% decline in May to a 3.1% gain in July, signaling improving consumer engagement and setting a positive tone for the remainder of the fiscal year. Twelve of the sixteen merchandise categories posted positive comparable sales growth, with strength in building materials, appliances, garden supplies, plumbing and electrical. Big-ticket comp transactions above $1,000 also grew 2.6%, while the average ticket size rose 1.4%.
Home Depot’s digital transformation is another pillar of its growth strategy. Online comparable sales climbed about 12% in the quarter, driven by faster same-day and next-day delivery capabilities and enhanced digital tools such as AI-powered search and “buy-it-again” functionality. These initiatives are boosting customer satisfaction and engagement, with management noting that customers using these services have demonstrated a double-digit increase in spending and purchase frequency. This strong digital adoption is supporting Home Depot’s efforts to build a seamless omnichannel shopping experience and improve productivity across its network.
The professional, or Pro, customer segment continues to be a major growth driver. Several thousand Pro customers are now using Home Depot’s trade credit facilities, with spending levels rising by double digits after activation. The SRS acquisition, completed a year ago, is already exceeding expectations in both growth and synergy realization, while the pending GMS acquisition will add more than 1,200 locations, 3,500 sales associates and nearly 8,000 delivery trucks capable of handling tens of thousands of job-site deliveries each day. These efforts are strengthening Home Depot’s leadership in specialty distribution and enabling capital-light growth through a wider network of distribution centers.
While Home Depot remains a strong operator, there are still reasons for caution. The company continues to face pressure from a softer environment for big-ticket renovations, particularly those requiring financing, as homeowners remain cautious amid economic uncertainty. This weakness in large discretionary projects, coupled with declining operating margins, rising expenses and elevated interest costs, limits near-term earnings potential despite ongoing efforts to expand capabilities in the Pro segment. It anticipates a decline in earnings per share of about 3% compared with the prior year, or 2% on an adjusted basis.
How Consensus Estimates Stack Up for HD
Over the past 30 days, the Zacks Consensus Estimate for the current fiscal year has edged down by a cent to $15.03, while the estimate for the next fiscal year has declined by 7 cents to $16.36.
Image Source: Zacks Investment Research
Unlocking Home Depot’s Valuation
Home Depot currently trades at a forward 12-month price-to-sales (P/S) multiple of 2.41, which positions it at a premium compared to the industry’s average of 1.71. The stock is also trading above its median P/S level of 2.35, observed over the past year.
This premium positioning is especially notable when compared to peers like Lowe’s (with a forward 12-month P/S ratio of 1.67), Floor & Decor (1.69) and FGI Industries (0.06).
Image Source: Zacks Investment Research
How to Play HD Stock: Buy, Hold or Sell?
Given Home Depot’s recent run-up and the mix of supportive growth drivers alongside near-term headwinds, current shareholders may consider maintaining their positions for now. The company’s strategic initiatives, digital transformation and professional customer expansion offer long-term promise, but ongoing margin pressures, earnings softness and macro uncertainty suggest waiting for clearer signs of demand recovery before considering fresh exposure. Home Depot currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.