The Home Depot, Inc. ($HD) Earnings (Q2 FY22)

 The Home Depot, Inc. ($HD) Earnings and Opinion:

The Home Depot is a company in the Consumer Cyclical sector and operates in the Home Improvement Retail industry. The company operates as a home improvement retailer. The Home Depot was incorporated in 1978 and is currently headquartered in Atlanta, Georgia. The company was first traded on the stock market in 1981.

The Home Depot Earnings Results:

  • Revenues of $43.79B beating expectations of $43.57B
  • Gross Profit of $14.48B beating expectations of $14.46B
  • Operating Income of $7.21B beating expectations of $7.15B
  • Adjusted EPS of $5.05 beating expectations of $4.97
  • Inventories of 26.09B missing expectations of 20.65B
Opinion:
The Home Depot is moving lower before the market opens after reporting earnings this morning. The company beat expectations on both the revenue and EPS metrics. The thing that is dragging it down has to be the amount of inventory on hand this quarter. This correlated with the decrease in revenue guidance for the fiscal year. They are doing a good job of selling products, they are just holding too much inventory which is a cost for the company. It makes sense though, because a lot of supply chain issues may cause them to have inventories come in at irregular times and can cause fluctuations in the inventory levels. I am still pretty happy with what they reported however. The Operating margin seems to be solid and EPS came in at a solid level. As far as valuation goes, revenue growth seems to be around 8% and a P/E ratio of 19.59 which is a little high compared to industry averages. The levels for future growth seem to be sustainable as EPS and Revenue are both supposed to grow by average amounts. For my personal opinion, I really like this stock for a value play. This company has a really good track record of success and seems to be on pace for even more growth. I do not think this earnings report really changes my stance on this company because if anything it makes me happier as a long-term investor. I think if you like a decent yielding dividend stock and want to get some return on your holding too, this would be an excellent stock to add to your portfolio. I hope the retail can find some balance again with supply chain woes because when it does, it has the potential to pop.


*Information from Yahoo Finance, CMLVIZ, Consensus Guru

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