The Home DepotSTU:HDI -0.42%83 Operating Margin % is 11.93% as of Apr. 2026, which is 17% below its 10-year median of 14.29. GuruFocus rates STU:HDI with a GF Score™ of 83/100 and a GF Value™ of €335.05 (Modestly Undervalued). The stock has 3 warning signs investors should review. Among 1,128 Retail - Cyclical companies, The Home Depot ranks better than 84.49% on this metric.
The Home Depot (STU:HDI) Operating Margin % Explanation
Just like Gross Margin %, it is important to see a company maintains its operating margin over time. Among the same industry, a company with higher operating margin is more efficient in its operation. It is also more stable during industry slowdown or recessions. Peter Lynch prefers those with higher margins than those with lower margins.
Be Aware
Operating Margin % can be manipulated by adjusting the rate of depreciation, depletion and amortization (DDA).
If a company is facing competition, its Operating Margin % may decline. Often the Operating Margin % declines well before the company's Revenue or even profit decline. Therefore, Operating Margin % is a very important indicator of whether the company is facing problems.
For instance, by 2012, Nokia (NOK)'s problems were well known and its stock had lost more than 90% of its market value since 2007. But Nokias Operating Margin % had already been in decline since 2002, although its Earnings per Share (Diluted) were still rising. Investors who paid attention to Operating Margin % would have avoided this huge loss. The same can be said for Research-in-Motion (RIMM).
Therefore, Operating Margin % is a very important screening filter for GuruFocus. GuruFocus's Buffett-Munger screener requires that the profit margin is either consistent or expanding. The Model Portfolio of the Buffett-Munger screener has outperformed the market every year since inception in 2009.
The Home Depot Operating Margin % Related Terms
The Home Depot Operating Margin % Historical Data
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The historical data trend for The Home Depot's Operating Margin % can be seen below:
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
STU:HDI vs LOW, FND, HVT: Operating Margin % Comparison
For the Home Improvement Retail subindustry, The Home Depot's Operating Margin %, along with its competitors' market caps and Operating Margin % data, can be viewed below:
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.
The Home Depot Operating Margin % vs Retail - Cyclical Industry
For the Retail - Cyclical industry and Consumer Cyclical sector, The Home Depot's Operating Margin % distribution charts can be found below:
* The bar in red indicates where The Home Depot's Operating Margin % falls into.
Operating Margin % - also known as operating income margin, operating profit margin and return on sales (ROS) - is the ratio of Operating Income divided by net sales or Revenue, usually presented in percent.
The Home Depot's Operating Margin % for the fiscal year that ended in Jan. 2026 is calculated as
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
The Home Depot (STU:HDI) has a Operating Margin % of 11.93% as of Apr. 2026. Operating margin is the ratio of total operating income to net sales. View historical data on The Home Depot and its competitors. This is 17% below median its historical median of 14.29. Over the past decade, The Home Depot's Operating Margin % has ranged from 12.45 to 15.27. According to the industry distribution chart, The Home Depot ranks #175 out of 1128 companies in the Retail - Cyclical industry, placing it in the top 15.5%.
Is The Home Depot's Operating Margin % too high?
The Home Depot's current Operating Margin % of 11.93% is 17% below median its 10-year median of 14.29. Over the past 10 years, this metric has ranged from a low of 12.45 to a high of 15.27. The Retail - Cyclical industry median Operating Margin % is 3.91. The Home Depot's value of 11.93% is 205.5% above this industry median. Based on the distribution chart, The Home Depot ranks #175 out of 1128 companies in the Retail - Cyclical industry, which is in the top quartile — a strong position relative to peers. Overall, The Home Depot has a GF Score™ of 83/100 and is considered Modestly Undervalued, reflecting its overall financial health beyond just this single metric.
How does The Home Depot's Operating Margin % compare to LOW and FND?
According to the Retail - Cyclical industry distribution chart, The Home Depot ranks #175 out of 1128 companies for Operating Margin %. This places The Home Depot in the top 16% of its industry — outperforming the majority of peers. The industry median Operating Margin % is 3.91. The Home Depot's value of 11.93% is 205.5% above this benchmark. Historically, The Home Depot's own Operating Margin % has ranged from 12.45 to 15.27 over the past decade. While the company's 10-year median is 14.29 vs. the industry median of 3.91, The Home Depot has consistently been above the industry average. See the competitive comparison table and distribution chart on this page for a detailed peer-by-peer breakdown.
What is a good Operating Margin % for a Retail - Cyclical company?
The median Operating Margin % among Retail - Cyclical companies is 3.91, based on 1,128 companies in the industry. Companies in the top quartile (top 25%) have a Operating Margin % significantly above this median, while those in the bottom quartile fall well below. However, Operating Margin % should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. The Home Depot's current Operating Margin % of 11.93% is 205.5% above the industry median. Use the industry distribution chart on this page to see where any company falls relative to its peers.
What does a high Operating Margin % mean?
A high Operating Margin % can signal that a stock is expensive relative to its fundamentals. Operating margin is the ratio of total operating income to net sales. View historical data on The Home Depot and its competitors. For the Retail - Cyclical industry, the median Operating Margin % is 3.91 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. The Home Depot's current Operating Margin % is 11.93%, which is 17% below median its own 10-year median of 14.29. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is The Home Depot stock overvalued right now?
Based on GuruFocus' analysis, The Home Depot (STU:HDI) is currently considered Modestly Undervalued. The stock's GF Value™ is €335.05, compared to a current price of €285.15 — trading 14.9% below its estimated fair value. The current Operating Margin % is 11.93%, which is 17% below median its 10-year median of 14.29 and 205.5% above the Retail - Cyclical industry median of 3.91. The Home Depot's overall GF Score™ is 83/100 with 3 warning signs to review. Investors should evaluate multiple metrics — including profitability, growth, and financial strength — before making a decision.
How is Operating Margin % calculated?
Operating Margin % is calculated from a company's financial statements. For The Home Depot (STU:HDI), the current Operating Margin % is 11.93% as of Apr. 2026. GuruFocus calculates this using data sourced from SEC filings and annual reports. See the calculation section and 30-year financial data on this page for the full breakdown.
Is The Home Depot (STU:HDI) Overvalued in 2026?
Based on GuruFocus' analysis, The Home Depot stock appears to be undervalued.
The current stock price of €285.15 is trading 14.9% below its estimated GF Value™ of €335.05.
GuruFocus considers The Home Depot to be Modestly Undervalued.
Key valuation signals for STU:HDI:
Operating Margin %: 11.93% (17% below median its 10-year median of 14.29)
GF Value™: €335.05 vs. price of €285.15 (14.9% below fair value)
Industry Position: 205.5% above the Retail - Cyclical median (#175 of 1128)
No single metric tells the full story. See the STU:HDI stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
Home Depot is the world's largest home improvement specialty retailer, operating 2,361 warehouse-format stores offering more than 30,000 products in store and 1 million products online in the US, Canada, and Mexico. Its stores offer building materials, home improvement products, lawn and garden products, and decor products and provide various services, including home improvement installation services and tool and equipment rentals. The acquisition of Interline Brands in 2015 allowed Home Depot to enter the MRO business, which has been expanded through the tie-up with HD Supply (2020). The 2024 tie-up with SRS will help grow professional demand in roofing, pool, and landscaping projects, while the 2025 purchase of GMS will lift building product sales through 1,250 distribution locations.
83GF Score
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