|
Related Topics
|
Category: Stock Market and The Home Depot (HD)
Date: 18 May 2021 Stock Price of Home Depot (HD) : $320.01 Market Capital of Home Depot (HD): $344.1 billion We take a look at the 1st quarter 2021 earnings report of the world's largest home improvement company, The Home Depot. The Company employs more than 400,000 associates. For the quarter the company reported net sales of $37.5 billion up 32.7% on the same quarter of the previous year and net income of $4.1 billion.
|
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 -Craig Menear, chairman and CEO "
About The Home Depot
When The Home Depot was founded in 1978, Bernie Marcus and Arthur Blank had no idea how revolutionary this new “hardware store” would be for home improvement and the retail industry.Today, we’re proud to be the world’s largest home improvement retailer. In more than 2,200 stores across North America, we aspire to excel in service – to our customers, associates, communities and shareholders. That’s what leadership means to us. That's The Home Depot difference. Our founders’ vision of one-stop shopping for the do-it-yourselfer came to fruition when they opened the first two Home Depot stores on June 22, 1979, in Atlanta, Georgia. The first stores, at around 60,000 square feet each, were cavernous warehouses that dwarfed the competition and stocked 25,000 products, much more than the average hardware store at that time.
Today, The Home Depot is the world’s largest home improvement retailer with nearly 400,000 orange-blooded associates and more than 2,200 stores in the U.S., Canada and Mexico. The typical store today averages 105,000 square feet of indoor retail space, interconnected with an e-commerce business that offers more than one million products for the DIY customer, professional contractors, and the industry’s largest installation business for the Do-It-For-Me customer.
Today, The Home Depot is the world’s largest home improvement retailer with nearly 400,000 orange-blooded associates and more than 2,200 stores in the U.S., Canada and Mexico. The typical store today averages 105,000 square feet of indoor retail space, interconnected with an e-commerce business that offers more than one million products for the DIY customer, professional contractors, and the industry’s largest installation business for the Do-It-For-Me customer.
Overview of The Home Depot's 1st quarter 2021 earnings report
The data refers to the latest quarter unless specified otherwise
- Net sales: $37.5 billion (up from $28.26 billion for the same quarter of the previous year)
- Net sales increased by 32.7% over the last 12 months
- Cost of sales: $24.758 billion (up from $18.635 billion for the same quarter of the previous year)
- Cost of sales increased by 32.9% over the last 12 months
- Some margin squeeze for The Home Depot as their revenues increased at a slower rate than their cost of sales
- Net earnings: $4.145 billion (up 84.6% from $2.245 billion for the same quarter of the previous year)
- Diluted earnings per share: $3.86 (up 85.6% from $2.08 for the same quarter of the previous year)
- PE ratio of The Home Depot: 20.6
- Dividend declared: $1.50
- Dividend yield of The Home Depot: 1.9%
- Diluted shares in issue: 1.075 billion (down -0.2% from 1.077 billion for the same quarter of the previous year)
- Cash and cash equivalents: $6.648 billion
- Cash and equivalents per share: $6.18
- Cash and equivalents makes up 1.9% of The Home Depot's market capital
- Cash and equivalents makes up 9.2% of The Home Depot's total assets
- Merchandise inventories: $19.178 billion
- Inventories makes up 26.4% of Home Depot's total assets
- Receivables: $3.624 billion
- Receivables makes up 4.9% of The Home Depot's total assets
- Cash generated from operations for the 3 months: $6.31 billion
- Cash generated from operations per share for the 3 months: $5.86
- Customer transactions (in millions): 447.2 (up 19.3% from the 374.8 million transactions for the same quarter of the previous year)
- Average ticket $82.37 (up 10.3% from $74.7 for the same quarter of the previous year)
- Sales per square foot: $605.6 (up 29.8% from $466.58 for the same quarter of the previous year)
The Home Depot management commentary on their 1st quarter 2021 earnings
ATLANTA, May 18, 2021 /PRNewswire/ -- The Home Depot®, the world's largest home improvement retailer, today reported sales of $37.5 billion for the first quarter of fiscal 2021, an increase of $9.2 billion, or 32.7 percent from the first quarter of fiscal 2020. Comparable sales for the first quarter of fiscal 2021 increased 31.0 percent, and comparable sales in the U.S. increased 29.9 percent.
Net earnings for the first quarter of fiscal 2021 were $4.1 billion, or $3.86 per diluted share, compared with net earnings of $2.2 billion, or $2.08 per diluted share, in the same period of fiscal 2020. For the first quarter of fiscal 2021, diluted earnings per share increased 85.6 percent from the same period in the prior year.
Net earnings for the first quarter of fiscal 2021 were $4.1 billion, or $3.86 per diluted share, compared with net earnings of $2.2 billion, or $2.08 per diluted share, in the same period of fiscal 2020. For the first quarter of fiscal 2021, diluted earnings per share increased 85.6 percent from the same period in the prior year.
"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 Craig Menear, chairman and CEO. "I am proud of the resilience and strength our associates have continued to demonstrate, and I would like to thank them and our supplier partners for their hard work and dedication to our customers."
The Home Depot ( HD) stock price chart over the last 5 years
The image below shows the stock price history of The Home Depot (NYSE:HD) for the last 5 years and it's been a pretty good time for Home Depot stockholders. Over the last 5 years the stock of The Home Depot has increased by 155.6%. No investor would say no to those kind of returns
The stock of Home Depot is trading at a lot closer to its 52 week high than it is to its 52 week low which to us is a clear indication that the short term sentiment and momentum of The Home Depot stock is very positive at this point in time.
The stock of Home Depot is trading at a lot closer to its 52 week high than it is to its 52 week low which to us is a clear indication that the short term sentiment and momentum of The Home Depot stock is very positive at this point in time.
The Home Depot (HD) stock price vs Lowes (LOW) stock price over last 5 years
The image below shows the stock price performance of The Home Depot (HD) and Lowes (LOW) over the last 5 years. And over the 5 year period the stock price trends of the two home improvement giants have been fairly similar. The summary below shows the stock price returns provided by each over the last 5 years, sorted from best to worst performer:
Over the 5 year period the stock of The Home Depot (HD) has narrowly outperformed that of smaller rival Lowes
- The Home Depot (HD): 155.6%
- Lowe's (LOW): 155.2%
Over the 5 year period the stock of The Home Depot (HD) has narrowly outperformed that of smaller rival Lowes
The Home Depot (HD) latest stock valuation
So what is Home Depot stock worth based on their 1st quarter 2021 earnings report? Based on their earnings report our valuation model provides a target price (full value price) for Home Depot at $254.20 a stock (up strong from our 3rd quarter 2020 earnings report review of Home Depot).
We therefore believe the stock of The Home Depot is overvalued at its current price of $320
We usually recommend long term fundamental or value investors look to enter a stock at least 10% below our target price (full value price), which in this case is $254.20, thus a good entry point into The Home Depot would be at $244 or below.
We expect the stock of Home Depot to pull back from current levels in coming weeks and months to levels closer to our target price (full value price), as their stock is price is overvalued and has been for some time and we believe once the spending of stimulus checks at stores such as the Home Depot and Walmart fades their reported earnings and stock prices will decline to reflect these lower sales.
We therefore believe the stock of The Home Depot is overvalued at its current price of $320
We usually recommend long term fundamental or value investors look to enter a stock at least 10% below our target price (full value price), which in this case is $254.20, thus a good entry point into The Home Depot would be at $244 or below.
We expect the stock of Home Depot to pull back from current levels in coming weeks and months to levels closer to our target price (full value price), as their stock is price is overvalued and has been for some time and we believe once the spending of stimulus checks at stores such as the Home Depot and Walmart fades their reported earnings and stock prices will decline to reflect these lower sales.
Next earnings release for The Home Depot (HD)
It is expected that The Home Depot will release their 1st quarter 2021 earnings report towards the end of August 2021