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Home Depot (HD) Stock Drops Despite Market Gains: Important Facts to Note

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Home Depot (HD - Free Report) closed at $395.43 in the latest trading session, marking a -1.95% move from the prior day. This move lagged the S&P 500's daily gain of 0.24%. Meanwhile, the Dow experienced a rise of 0.16%, and the technology-dominated Nasdaq saw an increase of 0.08%.

Shares of the home-improvement retailer witnessed a loss of 3.61% over the previous month, trailing the performance of the Retail-Wholesale sector with its gain of 5.98% and the S&P 500's gain of 2.37%.

The upcoming earnings release of Home Depot will be of great interest to investors. The company's earnings report is expected on February 25, 2025. The company is forecasted to report an EPS of $3.08, showcasing a 9.22% upward movement from the corresponding quarter of the prior year. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $39.02 billion, up 12.17% from the year-ago period.

Investors should also note any recent changes to analyst estimates for Home Depot. These revisions typically reflect the latest short-term business trends, which can change frequently. Hence, positive alterations in estimates signify analyst optimism regarding the company's business and profitability.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Over the last 30 days, the Zacks Consensus EPS estimate has witnessed a 0.33% decrease. Home Depot currently has a Zacks Rank of #3 (Hold).

From a valuation perspective, Home Depot is currently exchanging hands at a Forward P/E ratio of 25.85. For comparison, its industry has an average Forward P/E of 20.08, which means Home Depot is trading at a premium to the group.

Investors should also note that HD has a PEG ratio of 4.12 right now. The PEG ratio bears resemblance to the frequently used P/E ratio, but this parameter also includes the company's expected earnings growth trajectory. HD's industry had an average PEG ratio of 2.03 as of yesterday's close.

The Retail - Home Furnishings industry is part of the Retail-Wholesale sector. Currently, this industry holds a Zacks Industry Rank of 141, positioning it in the bottom 44% of all 250+ industries.

The Zacks Industry Rank is ordered from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Don't forget to use Zacks.com to keep track of all these stock-moving metrics, and others, in the upcoming trading sessions.


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