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Home Depot Stock Slips Below 50-Day SMA: Buy, Sell or Stay Invested?
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Key Takeaways
Home Depot shares fell below the 50-day SMA, signaling short-term bearish momentum.
Weak remodeling demand and cost pressures weigh on HD's margins and near-term outlook.
HD's steady sales, Pro expansion and supply-chain upgrades support its long-term resilience.
Shares of The Home Depot Inc. (HD - Free Report) have lost momentum in recent months, pushing it below industry thresholds and portraying a bearish sentiment from a technical standpoint. The Home Depot stock has lost 7.3% in the past month compared with the industry’s decline of 6.8%. As a result, the HD stock slipped below its 50-day simple moving average (SMA) on Oct. 1. Notably, the stock closed at $397.02 on Oct. 1, 2025, moving below the 50-day SMA of $399.79. Since then, the HD stock has been on a downtrend.
HD’s drop below the 50-day SMA signals weakness, suggesting a shift from short-term bullish to bearish sentiment. It highlights fading investor confidence and slower buying interest, especially after months of underperformance.
However, the home improvement behemoth trades above its 200-day SMA, indicating improving sentiment toward its long-term fundamentals and market outlook.
SMA is an essential tool in technical analysis that helps investors evaluate price trends by smoothing out short-term fluctuations. This approach also provides a clearer perspective on a stock's long-term direction.
HD Stock Trades Below 50-Day & Above 200-Day SMAs
Image Source: Zacks Investment Research
Home Depot’s stock shows slowed momentum, with its shares rising 5.9% in the past three months compared with the Zacks Retail – Home Furnishings industry’s growth of 3.4%. Meanwhile, the HD stock has underperformed the broader Zacks Retail-Wholesale sector and the S&P 500's growth of 8.5% and 9.4%, respectively.
Home Depot’s performance is notably weaker than that of its competitors, Lowe’s Companies Inc. (LOW - Free Report) and FGI Industries Ltd. (FGI - Free Report) , which have rallied 8.1% and 56.6%, respectively, in the past three months. However, the HD stock has underperformed Floor & Decor Holdings, Inc.’s (FND - Free Report) decline of 12.5% in the same period.
Home Depot’s 3-Month Price Performance
Image Source: Zacks Investment Research
At its current price of $389.33, the Home Depot stock trades 19.3% above its 52-week low mark of $326.31 and 11.4% below its 52-week high mark of $439.37.
Rationale Behind HD’s Slowed Momentum
Home Depot’s slowed momentum reflects a combination of structural and cyclical pressures that are weighing on growth and profitability. The company’s recovery in smaller, non-discretionary projects has yet to offset persistent weakness in large-scale remodels, such as kitchens and bathrooms, segments typically driven by financing availability and consumer confidence. Although big-ticket transactions showed modest improvement, sustained deferrals in larger projects are skewing Home Depot’s sales mix toward lower-margin categories, limiting operating leverage and earnings potential.
Margin softness compounds these challenges. Elevated operating expenses, integration costs from the SRS acquisition and tariff-related pressures have eroded profitability despite a stable gross margin. For fiscal 2025, Home Depot expects a flat gross margin of 33.4% and an adjusted operating margin of 13.4%, reflecting continued cost headwinds from logistics, wages and amortization. Currency fluctuations and tariffs further constrain flexibility, while reduced promotion risks weaken demand in price-sensitive areas.
Inventory levels also rose $1.8 billion year over year in second-quarter fiscal 2025 amid tepid big-ticket demand, heightening markdown risks. With management projecting just 1% comparable sales (comps) growth and a 2% decline in adjusted EPS for fiscal 2025, the near-term outlook remains cautious. Until macro conditions and renovation demand stabilize, Home Depot’s earnings recovery is likely to remain muted.
Do HD’s Fundamentals Suggest Long-Term Strength?
Home Depot’s fundamentals continue to signal long-term strength, supported by steady sales growth, strategic investments and deepening customer engagement. In second-quarter fiscal 2025, sales rose 4.9% year over year, driven by broad-based category gains and a 1% comps increase. The company’s ability to grow average ticket size underscores its pricing power and strong demand for premium products. Its integrated retail model, blending digital convenience with in-store expertise, remains a key differentiator, with online comps rising 12% year over year.
Ongoing investments in supply-chain efficiency, AI-enabled logistics and delivery speed are enhancing customer satisfaction and strengthening operational resilience. Additionally, Home Depot’s focus on expanding its Pro ecosystem through acquisitions like SRS and GMS boosts its presence in higher-value, recurring projects. With a disciplined expansion strategy and a robust omnichannel foundation, Home Depot is well-positioned to sustain market leadership and drive consistent long-term growth despite near-term macro headwinds.
Unlocking Home Depot’s Valuation
HD currently trades at a forward 12-month price-to-sales (P/S) multiple of 2.29X, which positions it at a premium compared with the industry’s average of 1.65X. However, the stock is trading slightly below its median P/E level of 2.36X observed in the past year.
This premium positioning is especially notable when compared with peers like Lowe’s (with a forward 12-month P/E ratio of 1.54X), Floor & Decor (1.53X) and FGI Industries (0.09X).
Image Source: Zacks Investment Research
Here’s How Estimates Are Shaping Up for HD
In the past 30 days, the Zacks Consensus Estimate for Home Depot’s fiscal 2025 EPS has held steady at $15.03, implying a year-over-year decline of 1.4%. Meanwhile, the EPS estimate for fiscal 2026 has declined 0.4% to $16.30, suggesting year-over-year growth of 8.5%.
Image Source: Zacks Investment Research
Is Home Depot Stock Still Worth Watching?
HD’s recent slip below its 50-day simple moving average signals near-term weakness and fading investor confidence, reflecting a pause in momentum. The move below this key technical level often suggests a shift in sentiment, raising concerns about the stock’s short-term direction. Slower price appreciation compared with the broader market and industry peers further underscores investor caution amid soft margins and muted remodeling demand.
However, the company’s fundamentals continue to point to long-term resilience. Trading above its 200-day average and backed by a strong balance sheet, digital leadership and growing Pro customer engagement, Home Depot remains well-positioned to capitalize on secular trends in home improvement.
Investments in supply-chain modernization, AI-driven logistics and omnichannel capabilities provide a solid footing for sustained growth. While near-term volatility may persist, the company’s market dominance and execution strength suggest enduring value for long-term investors.
Image: Bigstock
Home Depot Stock Slips Below 50-Day SMA: Buy, Sell or Stay Invested?
Key Takeaways
Shares of The Home Depot Inc. (HD - Free Report) have lost momentum in recent months, pushing it below industry thresholds and portraying a bearish sentiment from a technical standpoint. The Home Depot stock has lost 7.3% in the past month compared with the industry’s decline of 6.8%. As a result, the HD stock slipped below its 50-day simple moving average (SMA) on Oct. 1. Notably, the stock closed at $397.02 on Oct. 1, 2025, moving below the 50-day SMA of $399.79. Since then, the HD stock has been on a downtrend.
HD’s drop below the 50-day SMA signals weakness, suggesting a shift from short-term bullish to bearish sentiment. It highlights fading investor confidence and slower buying interest, especially after months of underperformance.
However, the home improvement behemoth trades above its 200-day SMA, indicating improving sentiment toward its long-term fundamentals and market outlook.
SMA is an essential tool in technical analysis that helps investors evaluate price trends by smoothing out short-term fluctuations. This approach also provides a clearer perspective on a stock's long-term direction.
HD Stock Trades Below 50-Day & Above 200-Day SMAs
Image Source: Zacks Investment Research
Home Depot’s stock shows slowed momentum, with its shares rising 5.9% in the past three months compared with the Zacks Retail – Home Furnishings industry’s growth of 3.4%. Meanwhile, the HD stock has underperformed the broader Zacks Retail-Wholesale sector and the S&P 500's growth of 8.5% and 9.4%, respectively.
Home Depot’s performance is notably weaker than that of its competitors, Lowe’s Companies Inc. (LOW - Free Report) and FGI Industries Ltd. (FGI - Free Report) , which have rallied 8.1% and 56.6%, respectively, in the past three months. However, the HD stock has underperformed Floor & Decor Holdings, Inc.’s (FND - Free Report) decline of 12.5% in the same period.
Home Depot’s 3-Month Price Performance
Image Source: Zacks Investment Research
At its current price of $389.33, the Home Depot stock trades 19.3% above its 52-week low mark of $326.31 and 11.4% below its 52-week high mark of $439.37.
Rationale Behind HD’s Slowed Momentum
Home Depot’s slowed momentum reflects a combination of structural and cyclical pressures that are weighing on growth and profitability. The company’s recovery in smaller, non-discretionary projects has yet to offset persistent weakness in large-scale remodels, such as kitchens and bathrooms, segments typically driven by financing availability and consumer confidence. Although big-ticket transactions showed modest improvement, sustained deferrals in larger projects are skewing Home Depot’s sales mix toward lower-margin categories, limiting operating leverage and earnings potential.
Margin softness compounds these challenges. Elevated operating expenses, integration costs from the SRS acquisition and tariff-related pressures have eroded profitability despite a stable gross margin. For fiscal 2025, Home Depot expects a flat gross margin of 33.4% and an adjusted operating margin of 13.4%, reflecting continued cost headwinds from logistics, wages and amortization. Currency fluctuations and tariffs further constrain flexibility, while reduced promotion risks weaken demand in price-sensitive areas.
Inventory levels also rose $1.8 billion year over year in second-quarter fiscal 2025 amid tepid big-ticket demand, heightening markdown risks. With management projecting just 1% comparable sales (comps) growth and a 2% decline in adjusted EPS for fiscal 2025, the near-term outlook remains cautious. Until macro conditions and renovation demand stabilize, Home Depot’s earnings recovery is likely to remain muted.
Do HD’s Fundamentals Suggest Long-Term Strength?
Home Depot’s fundamentals continue to signal long-term strength, supported by steady sales growth, strategic investments and deepening customer engagement. In second-quarter fiscal 2025, sales rose 4.9% year over year, driven by broad-based category gains and a 1% comps increase. The company’s ability to grow average ticket size underscores its pricing power and strong demand for premium products. Its integrated retail model, blending digital convenience with in-store expertise, remains a key differentiator, with online comps rising 12% year over year.
Ongoing investments in supply-chain efficiency, AI-enabled logistics and delivery speed are enhancing customer satisfaction and strengthening operational resilience. Additionally, Home Depot’s focus on expanding its Pro ecosystem through acquisitions like SRS and GMS boosts its presence in higher-value, recurring projects. With a disciplined expansion strategy and a robust omnichannel foundation, Home Depot is well-positioned to sustain market leadership and drive consistent long-term growth despite near-term macro headwinds.
Unlocking Home Depot’s Valuation
HD currently trades at a forward 12-month price-to-sales (P/S) multiple of 2.29X, which positions it at a premium compared with the industry’s average of 1.65X. However, the stock is trading slightly below its median P/E level of 2.36X observed in the past year.
This premium positioning is especially notable when compared with peers like Lowe’s (with a forward 12-month P/E ratio of 1.54X), Floor & Decor (1.53X) and FGI Industries (0.09X).
Image Source: Zacks Investment Research
Here’s How Estimates Are Shaping Up for HD
In the past 30 days, the Zacks Consensus Estimate for Home Depot’s fiscal 2025 EPS has held steady at $15.03, implying a year-over-year decline of 1.4%. Meanwhile, the EPS estimate for fiscal 2026 has declined 0.4% to $16.30, suggesting year-over-year growth of 8.5%.
Image Source: Zacks Investment Research
Is Home Depot Stock Still Worth Watching?
HD’s recent slip below its 50-day simple moving average signals near-term weakness and fading investor confidence, reflecting a pause in momentum. The move below this key technical level often suggests a shift in sentiment, raising concerns about the stock’s short-term direction. Slower price appreciation compared with the broader market and industry peers further underscores investor caution amid soft margins and muted remodeling demand.
However, the company’s fundamentals continue to point to long-term resilience. Trading above its 200-day average and backed by a strong balance sheet, digital leadership and growing Pro customer engagement, Home Depot remains well-positioned to capitalize on secular trends in home improvement.
Investments in supply-chain modernization, AI-driven logistics and omnichannel capabilities provide a solid footing for sustained growth. While near-term volatility may persist, the company’s market dominance and execution strength suggest enduring value for long-term investors.
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.