Image Source: PixabayAs part of an ongoing series, each week we typically conduct an analysis on one of the companies in our screens. This week, we will take a look at one of the stocks on our screens that has been making notable movements: The Home Depot, Inc. (HD).
Profile
Home Depot is the world’s largest home improvement specialty retailer, operating more than 2,300 warehouse-format stores offering more than 30,000 products in store and 1 million products online in the US, Canada, and Mexico. Its stores offer numerous building materials, home improvement products, lawn and garden products, and decor products and provide various services, including home improvement installation services and tool and equipment rentals.The acquisition of Interline Brands in 2015 allowed Home Depot to enter the MRO business, which has been expanded through the tie-up with HD Supply (2020). The additions of the Company Store brought textiles to the lineup, and Redi Carpet added multifamily flooring, while the recent tie-up with SRS will likely help grow professional demand.
Recent Performance
Over the past 12 months, the share price has moved up by approximately 22.06%. Note that these numbers are as of Sept. 19, 2024.
Source: Google Finance
Inputs
Forecasted Free Cash Flows (FCFs)
Terminal Value
Present Value of Terminal Value
Present Value of Free Cash Flows
Enterprise Value
Net Debt
Equity Value
Per-Share DCF Value
Conclusion
Based on the valuation analysis, the stock appears to be undervalued. The DCF value of $412.22 per share is higher than the recent market price of $384.01. The margin of safety is approximately 6.84%.More By This Author:Adobe Inc. Valuation: Is The Stock Undervalued?Comcast Corporation: Is It A Buy?Large-Cap Stocks In Trouble – Sunday, Sept. 8
