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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 $522.63
Latest Price $275.94
Relative Value 47% undervalued
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Cash Flow (Billions)
Analysis Parameters
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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 15.9%.

Weighted Average Cost of Capital (WACC)

The calculated WACC is 7.7%. This value is used as the default discount rate.

Value of Future Flows

Assuming a growth rate of 15.9%, 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)
2023 20.3 18.9
2024 23.6 20.3
2025 27.3 21.9
2026 31.6 23.5
2027 36.6 25.3
Terminal Value

Assuming a growth rate after the projection years of 2.0%, the terminal value of the company would be 662 billion. This corresponds to a present value of 425 billion.

Intrinsic Value Per Share

The total present value of the projected cash flows is 110 billion. Adding in the terminal value gives a total present value of 535 billion.

There are presently 1.02 billion outstanding shares, so the intrinsic value per share is 522.63.

Financial Statements

The following data was to determine the past cash flows.

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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