Yahoo Finance Is It Too Late To Consider Buying The Home Depot, Inc. (NYSE:HD)?
Let's talk about the popular The Home Depot, Inc. (NYSE:HD). The company's shares saw significant share price movement during recent months on the NYSE, rising to highs of US$327 and falling to the lows of US$267. Some share price movements can give investors a better opportunity to enter into the stock, and potentially buy at a lower price. A question to answer is whether Home Depot's current trading price of US$281 reflective of the actual value of the large-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at Home Depot’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.
See our latest analysis for Home Depot
What's The Opportunity In Home Depot?
Great news for investors – Home Depot is still trading at a fairly cheap price. My valuation model shows that the intrinsic value for the stock is $363.87, which is above what the market is valuing the company at the moment. This indicates a potential opportunity to buy low. Home Depot’s share price also seems relatively stable compared to the rest of the market, as indicated by its low beta. If you believe the share price should eventually reach its true value, a low beta could suggest it is unlikely to rapidly do so anytime soon, and once it’s there, it may be hard to fall back down into an attractive buying range.
What does the future of Home Depot look like?
Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. Buying a great company with a robust outlook at a cheap price is always a good investment, so let’s also take a look at the company's future expectations. However, with a relatively muted profit growth of 9.2% expected over the next couple of years, growth doesn’t seem like a key driver for a buy decision for Home Depot, at least in the short term.
What This Means For You
Are you a shareholder? Even though growth is relatively muted, since HD is currently undervalued, it may be a great time to increase your holdings in the stock. However, there are also other factors such as capital structure to consider, which could explain the current undervaluation.
Are you a potential investor? If you’ve been keeping an eye on HD for a while, now might be the time to make a leap. Its future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy HD. But before you make any investment decisions, consider other factors such as the track record of its management team, in order to make a well-informed investment decision.
If you want to dive deeper into Home Depot, you'd also look into what risks it is currently facing. For example - Home Depot has 2 warning signs we think you should be aware of.
If you are no longer interested in Home Depot, you can use our free platform to see our list of over 50 other stocks with a high growth potential.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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