Is Home Depot Stock a Buy, Hold or Sell at Its Current Price?

Core Insights - Home Depot, Inc. continues to leverage strategic store investments, supply-chain discipline, and digital capabilities to maintain a strong market position despite macroeconomic challenges [1] - The stock's current valuation raises questions about whether there is still value to unlock or if it is prudent to hold or trim positions [1] Stock Performance - Home Depot shares closed at $386.80, reflecting an 11% gain over the past year, outperforming the industry growth of 6.3% [2] - Compared to peers, Home Depot has significantly outperformed Lowe's (0.8% increase), Floor & Decor (-19.4%), and FGI Industries (-10.2%) [2] Valuation Analysis - Home Depot trades at a forward 12-month price-to-sales (P/S) multiple of 2.29, above the industry average of 1.61 but slightly below its one-year median of 2.30 [3] - The premium P/S ratio is notable compared to Lowe's (1.55), Floor & Decor (1.71), and FGI Industries (0.06) [3] Strategic Initiatives - The company is enhancing its Pro services and technology, which strengthens its market position [6] - Home Depot's investment in technology and customer-facing innovations, including AI-driven tools, is improving customer experience and engagement [9] - The strategic approach to supply chain management, including reducing dependence on single sourcing countries, is safeguarding against geopolitical risks [10] Growth Opportunities - The Pro segment is a key growth area, with acquisitions like SRS Distribution expected to capture more market share in fragmented Pro markets [8] - Structural tailwinds from an aging U.S. housing stock and high home equity levels position Home Depot to benefit from deferred remodeling demand once interest rates normalize [10] Financial Estimates - The Zacks Consensus Estimate for the current fiscal year remains at $15.04, indicating a year-over-year decline of 1.3%, while the next fiscal year's estimate has risen to $16.43, suggesting a growth of 9.2% [12] Investment Considerations - Despite strong operational performance, Home Depot faces near-term challenges such as margin pressure and soft demand for big-ticket items [11] - For existing shareholders, holding the stock is advisable due to long-term potential, while prospective investors may consider waiting for a more favorable entry point [14]