Home Depot (HD) is one of the biggest companies in the U.S. with a market cap of around $328 billion. The Atlanta-based home-improvement retailer is often viewed as a proxy for the U.S. housing market. Meanwhile, the stock is one of the top stocks in the Dow Jones Industrial Average for 2021, but is Home Depot stock a buy in the current stock market uptrend?
Home Depot Stock Fundamental Analysis
Home Depot operates more than 2,200 Home Depot stores across the U.S., Canada and Mexico. Its stellar history began with two store openings in 1979. Its fundamental story of offering a “huge variety of merchandise at great prices with highly-trained staff” sparked a tremendous stock move in the 1980s and into the early 1990s.
Meanwhile, Home Depot’s fundamental track record is exemplary. In the fiscal year ended in January 2011, the company earned $2.03 per share. In FY 2021, EPS measured $12.03, up 17%. The Street expects earnings to grow 17% to $14.05 a share in FY 2022 ending in January that year, according to IBD data.
On May 18, the company easily beat first-quarter estimates, as renovations and construction continue to boom amid rising costs of raw materials such as lumber and steel. Home Depot earnings soared 86% to $3.86 a share as sales swelled 33% to $37.5 billion. Same-store sales sprinted 31%, with U.S. comps up 29.9%.
“Fiscal 2021 is off to a strong start as we continue to build on the momentum from our strategic investments and effectively manage the unprecedented demand for home improvement projects,” said Chairman and CEO Craig Menear in the Home Depot earnings release.
According to the IBD Stock Checkup, Home Depot stock has an 81 out of a highest-possible 99 IBD Composite Rating. The Composite Rating helps investors easily measure a stock’s fundamental, technical and fund sponsorship qualities.
Is HD Stock A Buy Right Now?
During the coronavirus stock market crash, Home Depot stock traded as much as 43% off its 52-week high. But amid the current uptrend, shares of the retailer are extended above a new consolidation with a 293.05 buy point, according to IBD MarketSmith chart analysis.
Meanwhile, the stock is below its 50-day moving average line and about 11% off its 52-week high.
HD stock rose 0.3% Thursday.
For now, the stock is no longer a buy because it’s extended. Meanwhile, shares are below their key 50-day line, so investors should be waiting for new strength to offer a new buy point.
For more top stocks and stocks approaching buy points, check out these IBD Stock Lists, like the Stocks Near Buy Zones. To see the current stock market trend, check out IBD’s signature daily analysis, The Big Picture.
Be sure to follow Scott Lehtonen on Twitter at @IBD_SLehtonen for more on growth stocks and the stock market.
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