Home Depot (HD): Can it evolve from being merely a home improvement retailer into a “procurement infrastructure that keeps job sites running”?

※ This report is prepared based on data as of 2026-01-07.

1. Business basics: What is Home Depot, really? (middle-school version)

Home Depot (HD), at the simplest level, is “a store where you can buy materials and tools in one place to repair or build a home.” But the business is more than a DIY retailer. A big part of what HD does is act as a “supplier” to professionals (tradespeople, contractors, construction companies, etc.) who make their living repairing, remodeling, and building—helping them get what they need to the job site in large quantities, quickly, and reliably.

Who buys from HD: two core customer groups—consumers and “Pros”

• Consumers (DIY / household repairs): repainting walls, yard maintenance, replacing lighting, etc.
• Businesses / Pros (people who do construction work): carpenters, plumbers, electricians, roofers, remodeling companies, facilities management, etc.

In recent years, HD has put particular emphasis on expanding its “Pro” business. Pros typically have larger tickets, buy more frequently, and tend to form longer relationships that also include services like delivery.

What it sells: the business breaks into three main pillars

• Store-centric home improvement retail (the largest pillar): lumber, building materials, tools, electrical supplies, plumbing parts, paint, hardware, gardening, lighting, appliances, storage, etc. A one-stop shop for what you need to “repair or build a home.”
• Pro sales including delivery and job-site fulfillment (a pillar to strengthen): Pros want “bulk delivery to the job site” and “to finish quoting and materials procurement quickly.” HD is expanding inventory and delivery capabilities beyond the store base, moving toward a model that can reliably deliver.
• Capturing specialty distribution (centered on SRS; a candidate for a major future pillar): With SRS Distribution as the anchor—strong in job-site delivery of Pro materials for roofing, landscaping, pools, etc.—HD is also bringing in GMS (drywall, ceiling materials, steel framing-related products, etc.) to broaden its coverage of Pro materials.

How it makes money: still retail at the core, but increasingly about selling “execution”

At its foundation, this is a retail model: buy product, sell product, and earn the spread. But for Pros, “time spent on execution and coordination” is a major cost on top of materials. HD’s goal is to deliver an “experience that makes work faster”—bulk purchasing, job-site delivery, shorter quoting cycles, order management, and more—which can translate into higher share of wallet.

Why customers choose HD: “one-stop” plus “reliability”

• For consumers: you can source everything in one trip, it’s easy to get help, and the offering spans small repairs through full remodels.
• For Pros: the ability to get required materials “to the job site,” “in the required quantities,” and “on schedule.” Large and heavy items can ship not only from stores but also from distribution facilities. It can also reduce the effort involved in quoting and building materials lists (where AI tools can be effective).

What’s next: AI and distribution network expansion

HD’s AI efforts are best understood less as “creating new revenue with AI” and more as strengthening the existing model—shortening Pro quoting and materials procurement (materials list creation), making it easier to consolidate orders, and reducing missed sales. At the same time, by expanding the Pro distribution network through SRS + GMS, the evolution from store-centric retail to “Pro procurement infrastructure” is becoming more explicit.

The behind-the-scenes engine: logistics, inventory, and delivery

In the end, Pro expansion is a game where winners are often decided by the ability to “keep required products in stock and deliver as promised.” HD is investing in that foundation, including building out Pro distribution facilities.

An analogy

For consumers, HD is like a “convenience store for home repairs.” For Pros, it’s trying to become more like a “food warehouse that keeps the job site from going idle.”

That’s the business map. Next, we’ll look at the numbers to see what kind of long-term “pattern” has driven earnings over time.

2. Long-term performance: HD’s “company pattern” over 5 and 10 years

Lynch-style classification: a Stalwart-leaning hybrid with Cyclical exposure

HD has generally behaved like a mature, high-quality grower (a Stalwart), while still carrying Cyclical exposure to housing and remodeling demand. The key observation is that “it has grown over the long term, but profit and cash have slowed over the past two years.”

Long-term trends in revenue, EPS, and FCF (the “key numbers”)

• EPS: +7.8% CAGR over the past 5 years, +12.2% CAGR over the past 10 years. However, over the past 2 years (8-quarter CAGR), -1.9% annualized.
• Revenue: +7.7% CAGR over the past 5 years, +6.7% CAGR over the past 10 years. Over the past 2 years (8-quarter CAGR), +4.3% annualized.
• FCF: +8.1% CAGR over the past 5 years, +9.2% CAGR over the past 10 years. However, over the past 2 years (8-quarter CAGR), -11.9% annualized.

Over the long arc, the company has expanded. But the last two years increasingly read as “revenue is growing, while profit and cash are soft.”

Long-term profitability: double-digit margins, but trending down recently

• Operating margin (FY): historically has been in the double digits; most recently FY2025 was 13.5%. It has declined over the past three years: FY2023 (15.3%) → FY2024 (14.2%) → FY2025 (13.5%).
• FCF margin: FY2025 was 10.2%, while TTM is 8.38%. The gap between FY and TTM reflects period differences, and points to relatively weaker near-term cash generation efficiency.
• ROE (FY): the latest FY is 2.23. Because ROE can become extreme when equity is small (or the capital structure is unusual), it’s better not to infer “sharp improvement/deterioration” from ROE alone, and instead treat it as a metric that is highly sensitive to capital structure.

Where we are in the cycle: closer to “deceleration to stagnation”

While the 5- and 10-year view shows upward expansion, the past two years show negative growth in profit and FCF, and trend correlations are also negative. That makes it more consistent to describe the current phase as deceleration to stagnation rather than a “peak.” That said, because revenue is still growing even over the past two years, the key is to pinpoint where profits are being squeezed (costs, mix, investment burden, etc.) by reconciling short-term results with cash flow.

Long-term growth drivers (one sentence)

Over the past 10 years, EPS growth has been driven by revenue expansion plus operating margin improvement and a long-term decline in shares outstanding, while over the past two years profit and FCF growth have stalled—creating periods where revenue growth alone isn’t enough to offset the slowdown.

3. Current performance: does the “pattern” hold in TTM and the latest 8 quarters?

Whether the long-term pattern (Stalwart-leaning with Cyclical elements) is also showing up in the near term matters directly for the investment call. Using TTM and the past two years (8-quarter basis), we’ll check the “linkage” between revenue, profit, and cash.

TTM momentum: revenue is solid, but EPS and FCF are soft

• Revenue (TTM): +7.499% YoY (revenue scale is $166.19B). The demand base appears intact.
• EPS (TTM): -0.292% YoY (EPS 14.67). Essentially flat to slightly down—weak for a growth profile.
• FCF (TTM): -16.254% YoY (FCF $13.927B). Cash generation is clearly under pressure.

The “shape” of the last two years (8-quarter basis): momentum is diverging

• EPS: -1.9% annualized
• Revenue: +4.3% annualized
• Net income: -1.9% annualized
• FCF: -11.9% annualized

Over the past two years, the split is clear: “revenue is rising, while profit (EPS, net income) and cash (FCF) are trending down.” One way to frame this is that the housing/remodeling demand wave (the cyclical element) is showing up most sharply on the cash side.

“The classification still fits,” but it’s not a relaxed setup

Revenue resilience looks Stalwart-like, and EPS hasn’t fallen apart. But FCF is weak, and there’s a mismatch where profit and cash are soft while valuation multiples are relatively high—i.e., “the pattern holds, but the current setup isn’t especially forgiving.”

4. Financial soundness: how to think about bankruptcy risk (structurally, not as a claim)

HD has a distinctive capital structure, and it’s easy to misread the name if you focus only on earnings or dividends without understanding that structure.

Debt, interest burden, and liquidity

• D/E (latest FY): 9.38x (a high-borrowing-dependent structure).
• Net Debt / EBITDA (latest FY): 2.38x.
• Interest coverage (latest FY): 9.34x (some capacity to service interest at present).
• Cash ratio (latest FY): 0.058 (hard to describe the cash cushion as thick).

Put simply, it’s “high leverage, but with some current interest-servicing capacity.” Rather than drawing a bankruptcy conclusion from these figures alone, the practical takeaway is to keep it on the watchlist: in periods when profits and cash fall with the cycle, this capital structure can reduce shock absorption.

5. Shareholder returns (dividends): separate importance, growth, and safety

The dividend is hard to ignore

• Dividend yield (TTM): 2.43% (share price $344.09).
• Consecutive dividends: 36 years, consecutive dividend increases: 15 years.
• Most recent year in which a dividend adjustment can be confirmed: 2010 (not a claim of perpetual non-adjustment).

The yield sits in the 2% range—not especially high—but the long record of paying and raising dividends makes it difficult to ignore in an investment decision.

Where the dividend sits today: roughly in line with history

• 5-year average dividend yield: 2.40%
• 10-year average dividend yield: 2.43%

The current 2.43% is broadly in line with both the 5-year and 10-year averages.

Dividend growth: strong long term, cooling recently

• DPS growth: +10.6% CAGR over the past 5 years, +16.9% CAGR over the past 10 years.
• Most recent 1-year dividend increase (TTM): +3.60%.

Long-term dividend growth has been robust, but the most recent increase is comparatively modest. With TTM EPS at -0.292% YoY (flat to slightly down), slower dividend growth also keeps the payout ratio from drifting higher (faster increases would typically push the payout ratio up).

Dividend safety: supported, but with a mid-level cushion

• Payout ratio (earnings basis, TTM): 62.4% (higher than the 5-year average 50.8% and 10-year average 48.4%).
• Payout ratio (FCF basis, TTM): 65.3%.
• FCF dividend coverage (TTM): 1.53x (above 1x, but not a large buffer).

The cleanest framing is: the dividend looks “maintainable,” but the payout ratio is somewhat elevated and the cushion is moderate. Combined with the earlier balance-sheet profile (higher leverage and a thin cash cushion), it’s prudent to view dividend capacity as potentially more variable during periods of weaker profit and cash.

Positioning by investor type (Investor Fit)

• Income investors: the yield is in the 2% range and not especially high, but the long history of paying and increasing dividends keeps it on many income screens. That said, the current buffer is moderate rather than ample.
• Total-return focused: the dividend is “a meaningful component,” but not enough to carry the thesis by itself. With a payout ratio in the 60% range, the structure suggests a real priority on returning cash to shareholders.

On peer comparison: no conclusions from this dataset

Because peer yield and payout ratio data are not available here, we do not rank it within the industry. Instead, it’s most consistent to position HD as a name that is more likely to appeal to shareholder-return-oriented investors than “non-dividend growth,” given a ~2% yield in consumer retail and a long record of consecutive dividends.

6. Cash flow tendencies: are EPS and FCF moving together?

To assess HD’s near-term condition, the key is the alignment between “accounting profit (EPS)” and “cash that actually remains (FCF).”

• In TTM, revenue grew +7.499%, while EPS was -0.292% and FCF was -16.254%, meaning revenue growth is not flowing through cleanly to profit and cash.
• FCF margin (TTM) is 8.38%, below FY2025’s FCF margin of 10.2%. The difference between FY and TTM reflects period differences, and suggests weaker near-term cash generation efficiency.

The interpretation depends on whether this is “temporarily weak FCF due to investment (logistics, systems, facilities)” or “a deterioration in operating quality or cost structure that makes it harder to retain cash.” We do not assign causes based on the materials available here, but the key point is the setup: this is a phase where you should not get comfortable looking at revenue alone.

7. Current valuation: six metrics versus HD’s own history

Rather than comparing to peers or market averages, this section simply anchors “where we are now” versus HD’s own historical ranges (primarily the past 5 years, with the past 10 years as a supplement, and the past 2 years used only for directionality).

PEG: negative, so comparisons are inherently limited

• PEG: -80.33

Because the most recent 1-year EPS growth rate is slightly negative at -0.292%, PEG is negative. In that situation, it’s not consistent to interpret “breakout/breakdown” versus a distribution built around positive PEG in the usual way, so the most accurate statement is simply that it is “positioned as a negative PEG.”

P/E: high end of the 5-year range, above the 10-year range

• P/E (TTM): 23.46x (share price $344.09)

It sits toward the upper end of the past 5-year range (near the top of the typical band), and above the typical range over the past 10 years. With profit and FCF growth weak over the past two years while the P/E remains relatively elevated, the current setup is best described as “fundamentals (weak growth)” alongside “valuation (high multiple),” not just a timing mismatch.

Free cash flow yield: low end of the 5-year range, below the 10-year range

• FCF yield (TTM): 4.07%

It’s on the low end of the typical past 5-year range (lower yield implies a higher valuation) and below the typical range over the past 10 years.

ROE: within historical range (with capital-structure caveats)

• ROE (latest FY): 2.23

It falls within the typical range for both the past 5 and 10 years. As noted earlier, given how sensitive ROE can be to thin equity and other structural factors, it’s best not to infer strength or weakness from ROE alone—only that it is “within range.”

FCF margin: below the typical 5- and 10-year ranges

• FCF margin (TTM): 8.38%

It’s below the lower bound of the typical range over both the past 5 and 10 years. Directionally over the past two years, it’s most consistent to describe this as moving toward decline.

Net Debt / EBITDA: above the 5- and 10-year ranges (higher leverage side)

• Net Debt / EBITDA (latest FY): 2.38x

Net Debt / EBITDA works as an inverse indicator: the smaller the value (or the more negative), the more cash and the greater the financial flexibility. On that basis, 2.38x is above the typical range over the past 5 and 10 years, placing it on the side of “greater leverage pressure” versus the historical distribution. Directionally over the past two years, it has also moved higher (toward a larger value).

“Current position” across the six metrics

• Valuation (multiple) side: P/E is on the upper side over the past 5 years, and above range over the past 10 years.
• Cash side: FCF yield is on the lower side over the past 5 years, and below range over the past 10 years. FCF margin is also below range over the past 5 and 10 years.
• Financials: Net Debt / EBITDA is above range over the past 5 and 10 years (higher value side).
• PEG is negative, making historical range comparison difficult.

8. Why HD has “won”: the core of the success story

HD’s core value is that it functions as “supply infrastructure that can assemble what’s needed to maintain and upgrade homes and buildings, at the right time, and in the right quantities.” The winning formula is less about “how big the sales floor is” and more about the combination below.

• One-stop capability: when missing even one component can force rework, being able to source everything in one trip has real value.
• Procurement reliability: operating quality—inventory depth, lead times, and returns—effectively becomes “quality” for Pros.
• Ease of purchasing and management: membership, apps, purchase history, perks, project management, etc. create a system that gets “more convenient the more you buy.”

Handling large and heavy items (lumber, insulation, roofing materials, etc.)—and running the inventory, delivery, and returns machine behind them—can itself be a barrier to entry, and another structural advantage.

9. Is the story still intact? Strategy versus recent results

The core narrative—“strengthen the Pro business and evolve from stores into ‘Pro procurement infrastructure’”—still stands as the main axis. The near-term numbers, however, show a divergence: “revenue is growing, but profit and cash are not.”

Mapped back to the strategy, this is a phase where two dynamics can easily coexist.

• The expansion phase becomes more visible: the more the company invests in supply capacity and member experience, the more near-term costs and operating burden can rise—potentially slowing profit and cash growth.
• Reconfiguration and optimization can happen at the same time: actions like closing and consolidating logistics facilities suggest “optimizing while reconfiguring,” rather than locking the network in place.

The key question shifts from simply “is it expanding?” to whether that expansion is actually improving the Pro experience (stockouts, late deliveries, wait times, quote rework, etc.).

10. Quiet Structural Risks: how a strong-looking HD could still break

HD is large and has a long operating history, but it’s also a business where “execution variance” shows up directly in customer experience. Below are some less obvious ways the model can break—presented as discussion points, not a good/bad judgment.

• Skew from Pro dependence: as the Pro mix rises, sensitivity can tilt toward workload (the Pro economy) in specific trades and regions.
• Commoditization shifts competition toward operating quality: delivery, order management, and member perks can be copied; as differentiation narrows, competition can shift to price, lead times, stockout rates, and service quality—which can raise operating costs.
• Fragility when differentiation depends on “execution”: because the model wins more on experience than product differentiation, if the experience breaks, recovery can be harder.
• Supply chain dependence: for large and heavy items, swings in supply/demand, transportation, and inventory feed directly into experience; the more the distribution network is relied upon to solve issues, the higher the design complexity.
• Risk of cultural slippage: as delivery and job-site support expand, managing frontline load becomes more important; staffing, training, and turnover can more easily determine experience quality.
• Profit weakness starts to look “structural”: if revenue grows but profit and cash stay weak for an extended period, investors may question cost structure and service economics rather than viewing it as cyclical.
• Financial burden: when high borrowing dependence overlaps with weak cash, flexibility can shrink. With only a moderate dividend cushion, persistent cash deterioration can reduce degrees of freedom.
• Network reconfiguration failures become visible quickly: consolidation can be part of optimization, but during reconfiguration, temporary service-level declines and frontline disruption—“less visible breakdowns”—can become more likely.

11. Competitive landscape: the opponent isn’t just “another store”

Home improvement retail can look like “stores selling the same products,” but in the Pro market the real battleground shifts to “supply capability and low operational friction.” As HD becomes more infrastructure-like, the competitive set expands beyond home centers to specialty distribution, trading-house-style distributors, e-commerce platforms, and even software that controls pre-purchase processes (the “front end”) such as quoting and design.

Major competitive players (within the scope of the materials)

• Lowe’s (LOW): the most direct big-box home center competitor. In recent years it has strengthened the Pro segment, with notable moves to expand loyalty, quoting, and job-site delivery.
• Menards (private): can be a strong regional counterweight (competition often becomes area-based).
• Ace Hardware / True Value, etc.: can compete on proximity and small-ticket demand, but structurally differs from bulk supply of large and heavy items.
• Ferguson (FERG): distribution of specialty products such as plumbing and HVAC. When purchasing behavior routes specialty items to specialty distributors, it can take share from HD.
• Builders FirstSource (BLDR): strong in supplying lumber and building materials, and can compete more directly in new construction and large-scale renovation.
• Roofing/exterior specialty distribution (e.g., Beacon, ABC Supply): likely competitors in the specialty distribution domain where HD is expanding via SRS and others.
• E-commerce such as Amazon: competes in smaller-ticket, more standardized products and search/compare-driven purchasing. However, heavy items, same-day needs, returns, and job-site delivery quality still depend heavily on physical operations.

Competition map by domain: what “winning” means changes by segment

• DIY / household repairs: assortment, price, store access, advice, returns, online funnel.
• Repeat purchasing by small Pros: stockout rate, in-store wait time, member perks, history management, small-parcel delivery.
• Large Pros (job-site-level bulk purchasing): inventory depth, direct-to-site shipping, speed and accuracy of quotes, handling complex orders, split deliveries and returns, dedicated sales support.
• Specialty distribution: depth in specialty categories, job-site delivery, relationships with trade communities, credit provision, operating quality.
• Quoting / design / planning (front end): takeoffs from drawings, automated order list creation, project management, reordering, default settings for where orders flow.

Competitive KPIs investors should monitor

• Pro revenue mix and purchase frequency (whether repeat purchasing is scaling)
• Job-site delivery quality (stockouts, late deliveries, substitutions, re-deliveries, structure of return reasons)
• Processing capacity for large orders (quote time, change handling, inquiry volume)
• Stability of logistics facilities and delivery network operations (whether reconfiguration occurs, and service levels after reconfiguration)
• Whether specialty distribution category expansion is translating into cross-sell and repeat purchasing
• Progress of competitors’ Pro initiatives (loyalty, supplier-direct quoting/delivery, acquisitions)
• Control of the digital front end (whether planning/quoting tools are designed to route orders to specific destinations)

12. Moat (Moat): what the barriers to entry are—and how durable they may be

HD’s moat isn’t just brand; it’s the following “compounded operations.”

• The combination of store network + logistics network + inventory operations
• Supply capability including large and heavy items
• Job-site delivery operations
• Funnels embedded into Pro ordering workflows (membership, apps, history, project management, quote support)

This is the kind of moat that “takes time to build” and can’t be replicated quickly. But it’s also the kind where the gap can narrow if competitors keep investing. The durability question comes down to whether expansion (facilities, acquisitions, digital) actually reduces friction from stockouts, late deliveries, and exception handling—and whether Pro repeat purchasing becomes the “default” behavior that runs more naturally.

13. HD in the AI era: tailwind or headwind?

It’s most consistent to place HD on the side that “reduces operational friction and strengthens procurement infrastructure,” rather than the side that is “displaced” by AI. That said, the front end—information, quoting, and planning—is an area where AI-driven competition can intensify, and disintermediation pressure can rise or fall depending on who controls that front-end design.

Where AI can help (based on the materials)

• Shortening Pro workflows: creating materials lists and quotes from drawings, running projects through a planning/management hub, etc.—compressing time in upstream processes (quoting, materials procurement, planning) and connecting that directly to purchasing.
• Data advantage: product catalogs, project knowledge, purchasing behavior, and operating data on inventory, lead times, and delivery can directly inform job-site procurement decisions.
• Reinforcing mission-criticality: when stockouts and late deliveries hit schedules immediately, value rises as upstream time compression translates into purchasing and delivery reliability.

Where AI could be a headwind (substitution risk)

• Product search, comparison, and simple advice: the information-processing layer can commoditize via generative AI, and competitors are also rolling out similar funnels.
• Risk of the front end being controlled by others: if quoting/planning is dominated by another tool, order flow can fragment and disintermediation pressure can rise.

Where HD sits in the stack

HD is not the OS layer (the foundational AI itself). It sits in “field-facing business applications + procurement/delivery operating infrastructure (the middle layer).” AI becomes a productivity engine on top of that, and differentiation ultimately comes down to whether it connects to “inventory, lead times, and delivery.”

14. Management, culture, and governance: can the organization execute?

Management’s North Star: defend the core, win in Pro

Management’s messaging can be distilled into three themes: “protect existing strengths (store network, operations, and the service foundation),” “connect digital with stores and delivery to create a low-friction purchasing experience,” and “then win more Pro customers.” The company also communicates guidance that appears grounded in a weaker demand backdrop, and the tone reads as execution-focused—sticking with the plan rather than pivoting on short-term expectations.

CEO (Ted Decker) profile: frontline-oriented, with a recognition-heavy tone

• Personality tendency: suggests a “servant leadership” style that emphasizes recognizing and praising frontline employees.
• Values: frames “culture and values as the foundation of performance and shareholder value,” rather than treating culture as window dressing.
• Priorities: emphasizes expanding capabilities that control Pro purchasing flows (delivery, sales organization, technology, CRM, order management, etc.), with a focus on integrated operations that connect stores and logistics—not “digital only.”

Why culture is directly tied to strategic outcomes

HD’s differentiation leans more on “supply capability and low operational friction” than on unique products. In that setup, if culture weakens, operating quality can slip—and the Pro experience can break more easily. Large Pro orders, heavy items, and job-site delivery also come with many exceptions, requiring both standardization and strong exception handling, plus cross-functional coordination across stores, delivery, facilities, and digital.

Organizational build-out: a Pro leader role and HR changes

In March 2025, the company created a Pro leader role (EVP of Pro) overseeing Pro delivery, sales, technology, order management, and related functions. That can be read as institutionalizing the strategic priority inside the org chart. A change at the top of HR (HR succession) can also influence whether culture remains central to management’s agenda, making it notable from a continuity standpoint.

General patterns in employee reviews (without asserting)

• More likely to skew positive: satisfaction from solving customer problems, awards and recognition systems, and stronger cultural experience at locations led by managers who understand frontline realities.
• More likely to skew negative: in weak demand periods, staffing slack thins and workload rises; as KPI pressure increases, employees may feel pushed toward hitting numbers over service quality; as Pro expansion increases exception handling, psychological burden can rise.

The point isn’t to claim “culture is good/bad,” but to understand the structure: HD’s chosen strategy (becoming supply infrastructure) tightly links employee experience to operating quality.

Technology adoption: AI as friction removal, not “becoming a tech company”

HD’s AI strategy is best viewed less as launching a new AI business and more as removing friction in customer support and upstream purchasing processes—and tying that into integrated purchasing and delivery operations. Separately, as part of board talent reinforcement, a leader from the AI platform domain has been announced as a director candidate, which aligns with management’s emphasis on “integrating digital and operations.”

Governance topic: monitorability of shareholder engagement

In November 2025, amendments to the bylaws were reported that set procedures related to shareholder proposals and director nominations. While described as part of periodic governance review, investors can monitor it through the lens of “ease of shareholder engagement” (without asserting good or bad).

15. Two-minute Drill: the long-term “thesis skeleton”

For long-term investors evaluating HD, the key isn’t “home center sales,” but “whether its role as job-site procurement infrastructure expands through repeat purchasing and improved operating quality.”

• Company pattern: Stalwart-leaning, with housing/remodeling cyclical exposure; recently closer to a deceleration-to-stagnation phase.
• Success story: reduce “Pro execution costs” by delivering supply reliability across inventory, delivery, and returns, and by building funnels that reduce friction across quoting, ordering, and delivery—deepening transactions over time.
• Current focus: in TTM, revenue is growing, while EPS is flat to slightly down and FCF is down double digits. Whether revenue growth translates back into profit and cash will determine the story’s credibility.
• How to read the balance sheet: leverage is relatively high (D/E 9.38x, Net Debt/EBITDA 2.38x), with some interest-servicing capacity (coverage 9.34x). It’s best framed less as a tailwind and more as “durable, but without a thick buffer.”
• AI positioning: not a new revenue engine, but a reinforcement that shortens upstream processes (quoting, materials procurement, planning) and routes into one-stop purchasing. Preventing order flow from fragmenting amid front-end competition is an important design challenge.

Finally, within HD’s KPI tree, the most direct way to connect the narrative to the numbers is to track “whether revenue growth translates back into margins and cash conversion,” “whether supply quality (stockouts, late deliveries, exception handling) is improving,” and “whether the burden from expansion, integration, and reconfiguration is being smoothed.”