Home Depot Stock Up 10% in 3 Months: Is Holding Still the Best Move?

Core Insights - Home Depot's shares have increased by approximately 10.4% over the past three months, prompting investor interest in future performance [1][8] - The company has demonstrated resilience through strong demand from professional contractors, productivity initiatives, and disciplined capital allocation [2][9] - Home Depot's stock performance has outpaced the S&P 500 and Retail-Wholesale sector, although it has underperformed compared to some peers [3][6] Performance Metrics - Home Depot closed at $407.71, trailing the industry's 11.9% gain but outperforming the S&P 500 (8.8%) and Retail-Wholesale sector (5.9%) [3] - The stock is trading above both its 50-day and 200-day moving averages, indicating sustained momentum [6][7] - In the second quarter, sales rose 4.9% year-over-year to $45.3 billion, with comparable sales growth of 1% in the U.S. [10] Growth Drivers - The professional customer segment is a significant growth driver, with spending levels rising by double digits after activation of trade credit facilities [12] - Home Depot's digital transformation has led to a 12% increase in online comparable sales, enhancing customer engagement [11] - The company plans to open around 13 new stores in fiscal 2025, indicating ongoing capital deployment for expansion [9] Financial Outlook - For fiscal 2025, Home Depot expects total sales growth of about 2.8% and an adjusted operating margin of 13.4% [9] - The Zacks Consensus Estimate for the current fiscal year is $15.03, with a slight decline in estimates for the next fiscal year [16] - Home Depot currently trades at a forward price-to-sales (P/S) multiple of 2.41, which is a premium compared to the industry average of 1.71 [18][20]