HD Intrinsic Value

HD

Home Depot, Inc. – Home Centers

The Home Depot is the world's largest home improvement specialty retailer, with 2,296 retail stores in all 50 states, the District of Columbia, Puerto Rico, U.S. Virgin Islands, Guam, 10 Canadian provinces and Mexico. In fiscal 2019, The Home Depot had sales of $110.2 billion and earnings of $11.2 billion. The company employs more than 400,000 associates. The Home Depot's stock is traded on the New York Stock Exchange and is included in the Dow Jones industrial average and Standard & Poor's 500 index.

Analysis Results

Intrinsic Value	$752.38
Latest Price	$292.83
Relative Value	61% undervalued

Share results:

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Cash Flow (Billions)

Analysis Parameters

New Ticker

Analysis Details

Growth Rate Projection

An exponential growth model was fit to the past cash flow data, giving more weight to more recent years. This model determined a growth rate estimate of 19.4%.

Weighted Average Cost of Capital (WACC)

The calculated WACC is 8.1%. This value is used as the default discount rate.

Value of Future Flows

Assuming a growth rate of 19.4%, the cash flows for the next 5 years are projected.

The present value of each year's flow is adjusted to present value using the discount rate.

Year	Future flow (billion)	Present value (billion)
2024	27.9	25.8
2025	33.3	28.5
2026	39.7	31.5
2027	47.4	34.8
2028	56.6	38.4

Terminal Value

Assuming a growth rate after the projection years of 2.0%, the terminal value of the company would be 952 billion. This corresponds to a present value of 598 billion.

Intrinsic Value Per Share

The total present value of the projected cash flows is 159 billion. Adding in the terminal value gives a total present value of 756 billion.

There are presently 1.01 billion outstanding shares, so the intrinsic value per share is 752.38.

Financial Statements

The following data was to determine the past cash flows.

Current Assets	32,471,000,000
Current Cash	2,757,000,000
Current Liabilities	23,110,000,000
Current Debt	1,231,000,000
Non-Cash Working Capital (NCWC)	7,835,000,000
Change in NCWC	6,334,000,000
EBIT	24,039,000,000
Tax Provision	5,372,000,000
Depreciation and Amortization	2,975,000,000
Capital Expenditure	-3,119,000,000
Unlevered Free Cash Flow	24,483,682,208

Current Assets	29,055,000,000
Current Cash	2,343,000,000
Current Liabilities	28,693,000,000
Current Debt	3,482,000,000
Non-Cash Working Capital (NCWC)	1,501,000,000
Change in NCWC	2,669,000,000
EBIT	23,040,000,000
Tax Provision	5,304,000,000
Depreciation and Amortization	2,862,000,000
Capital Expenditure	-2,566,000,000
Unlevered Free Cash Flow	20,383,057,689

Current Assets	28,477,000,000
Current Cash	7,895,000,000
Current Liabilities	23,166,000,000
Current Debt	1,416,000,000
Non-Cash Working Capital (NCWC)	-1,168,000,000
Change in NCWC	-3,283,000,000
EBIT	18,278,000,000
Tax Provision	4,112,000,000
Depreciation and Amortization	2,519,000,000
Capital Expenditure	-2,463,000,000
Unlevered Free Cash Flow	10,624,145,482

Current Assets	19,810,000,000
Current Cash	2,133,000,000
Current Liabilities	18,375,000,000
Current Debt	2,813,000,000
Non-Cash Working Capital (NCWC)	2,115,000,000
Change in NCWC	-315,000,000
EBIT	15,843,000,000
Tax Provision	3,473,000,000
Depreciation and Amortization	2,296,000,000
Capital Expenditure	-2,678,000,000
Unlevered Free Cash Flow	11,406,772,069

Current Assets	18,529,000,000
Current Cash	1,778,000,000
Current Liabilities	16,716,000,000
Current Debt	2,395,000,000
Non-Cash Working Capital (NCWC)	2,430,000,000
Change in NCWC	525,000,000
EBIT	15,777,000,000
Tax Provision	3,435,000,000
Depreciation and Amortization	2,152,000,000
Capital Expenditure	-2,442,000,000
Unlevered Free Cash Flow	12,288,862,118

Current Assets	18,933,000,000
Current Cash	3,595,000,000
Current Liabilities	16,194,000,000
Current Debt	2,761,000,000
Non-Cash Working Capital (NCWC)	1,905,000,000
Change in NCWC	-400,000,000
EBIT	14,681,000,000
Tax Provision	5,068,000,000
Depreciation and Amortization	2,062,000,000
Capital Expenditure	-1,897,000,000
Unlevered Free Cash Flow	9,014,308,658

Current Assets	17,724,000,000
Current Cash	2,538,000,000
Current Liabilities	14,133,000,000
Current Debt	1,252,000,000
Non-Cash Working Capital (NCWC)	2,305,000,000
Change in NCWC	-373,000,000
EBIT	13,427,000,000
Tax Provision	4,534,000,000
Depreciation and Amortization	1,973,000,000
Capital Expenditure	-1,621,000,000
Unlevered Free Cash Flow	8,532,249,459

Current Assets	16,993,000,000
Current Cash	2,216,000,000
Current Liabilities	12,526,000,000
Current Debt	427,000,000
Non-Cash Working Capital (NCWC)	2,678,000,000
Change in NCWC	40,000,000
EBIT	11,774,000,000
Tax Provision	4,012,000,000
Depreciation and Amortization	1,863,000,000
Capital Expenditure	-1,503,000,000
Unlevered Free Cash Flow	7,887,883,676

Current Assets	15,302,000,000
Current Cash	1,723,000,000
Current Liabilities	11,269,000,000
Current Debt	328,000,000
Non-Cash Working Capital (NCWC)	2,638,000,000
Change in NCWC	4,000,000
EBIT	10,469,000,000
Tax Provision	3,631,000,000
Depreciation and Amortization	1,786,000,000
Capital Expenditure	-1,442,000,000
Unlevered Free Cash Flow	7,006,561,046

Current Assets	15,279,000,000
Current Cash	1,929,000,000
Current Liabilities	10,749,000,000
Current Debt	33,000,000
Non-Cash Working Capital (NCWC)	2,634,000,000
Change in NCWC	-103,000,000
EBIT	9,166,000,000
Tax Provision	3,082,000,000
Depreciation and Amortization	1,757,000,000
Capital Expenditure	-1,389,000,000
Unlevered Free Cash Flow	6,094,563,009

Current Assets	15,372,000,000
Current Cash	2,494,000,000
Current Liabilities	11,462,000,000
Current Debt	1,321,000,000
Non-Cash Working Capital (NCWC)	2,737,000,000
Change in NCWC	-450,000,000
EBIT	7,766,000,000
Tax Provision	2,686,000,000
Depreciation and Amortization	1,684,000,000
Capital Expenditure	-1,312,000,000
Unlevered Free Cash Flow	4,799,276,000

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