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The Home Depot has the Financial Strength Rank of 5.
GuruFocus Financial Strength Rank measures how strong a company's financial situation is. It is rated on a scale of 1 to 10 and is based on these factors:
1. The debt burden that the company has as measured by its Interest Coverage (current year). The higher, the better.
2. Debt to revenue ratio. The lower, the better.
3. Altman Z-Score.
4. Other debt related ratios.
A higher score indicates a stronger financial position, with companies rated 7 or above considered financially stable and unlikely to face distress. Conversely, a score of 3 or below suggests potential financial difficulties, indicating a higher risk of distress.
The Home Depot's Interest Coverage for the quarter that ended in Apr. 2026 was 8.15.
The Home Depot's debt to revenue ratio for the quarter that ended in Apr. 2026 was 0.38.
As of today, The Home Depot's Altman Z-Score is 5.56.
The Home Depot (XSWX:HD) Financial Strength Explanation
The rank is rated on a scale of 1 to 10. A higher score indicates a stronger financial position, with companies rated 7 or above considered financially stable and unlikely to face distress. Conversely, a score of 3 or below suggests potential financial difficulties, indicating a higher risk of distress.
The Home Depot has the Financial Strength Rank of 5.
The Home Depot Financial Strength Related Terms
XSWX:HD vs LOW, FND, HVT: Financial Strength Comparison
For the Home Improvement Retail subindustry, The Home Depot's Financial Strength, along with its competitors' market caps and Financial Strength 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 Financial Strength vs Retail - Cyclical Industry
For the Retail - Cyclical industry and Consumer Cyclical sector, The Home Depot's Financial Strength distribution charts can be found below:
* The bar in red indicates where The Home Depot's Financial Strength falls into.
Interest Coverage is a ratio that determines how easily a company can pay interest expenses on outstanding debt. It is calculated by dividing a company's Operating Income (EBIT) by its Interest Expense:
Z-Score model is an accurate forecaster of failure up to two years prior to distress. It can be considered the assessment of the distress of industrial corporations.
The zones of discrimination were as such:
When Z-Score is less than 1.81, it is in Distress Zones.
When Z-Score is greater than 2.99, it is in Safe Zones.
When Z-Score is between 1.81 and 2.99, it is in Grey Zones.
The Home Depot has a Z-score of 5.56, indicating it is in Safe Zones. This implies the Z-Score is strong.
Good Sign:
Altman Z-score of 5.56 is strong.
* 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 (XSWX:HD) has a Financial Strength of 5 as of Apr. 2026. The financial strength rank measures the strength of a company's balance sheet based on revenue and debt. View historical data on The Home Depot and its competitors. This is near median its historical median of 5.00. Over the past decade, The Home Depot's Financial Strength has ranged from 4.00 to 7.00.
Is The Home Depot's Financial Strength too high?
The Home Depot's current Financial Strength of 5 is near median its 10-year median of 5.00. Over the past 10 years, this metric has ranged from a low of 4.00 to a high of 7.00. Overall, The Home Depot has a GF Score™ of 83/100, reflecting its overall financial health beyond just this single metric.
How does The Home Depot's Financial Strength compare to LOW and FND?
The Home Depot's Financial Strength of 5 can be compared against companies in the Retail - Cyclical industry. Historically, The Home Depot's own Financial Strength has ranged from 4.00 to 7.00 over the past decade. See the competitive comparison table and distribution chart on this page for a detailed peer-by-peer breakdown.
What is a good Financial Strength for a Retail - Cyclical company?
A good Financial Strength depends on the Retail - Cyclical industry context. However, Financial Strength should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. Use the industry distribution chart on this page to see where any company falls relative to its peers.
What does a high Financial Strength mean?
A high Financial Strength can signal that a stock is expensive relative to its fundamentals. The financial strength rank measures the strength of a company's balance sheet based on revenue and debt. View historical data on The Home Depot and its competitors. The Home Depot's current Financial Strength is 5, which is near median its own 10-year median of 5.00. 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?
The Home Depot (XSWX:HD) has a current Financial Strength of 5. The stock's GF Value™ is CHF310.60, compared to a current price of CHF270.50 — trading 12.9% below its estimated fair value. The current Financial Strength is 5, which is near median its 10-year median of 5.00. 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 Financial Strength calculated?
Financial Strength is calculated from a company's financial statements. For The Home Depot (XSWX:HD), the current Financial Strength is 5 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 (XSWX:HD) Overvalued in 2026?
Based on GuruFocus' analysis, The Home Depot stock appears to be undervalued.
The current stock price of CHF270.50 is trading 12.9% below its estimated GF Value™ of CHF310.60.
Key valuation signals for XSWX:HD:
Financial Strength: 5 (near median its 10-year median of 5.00)
GF Value™: CHF310.60 vs. price of CHF270.50 (12.9% below fair value)
No single metric tells the full story. See the XSWX:HD 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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