Home Depot Inc. (NYSE:HD)

Price to Earnings (P/E) Ratio

The Price to Earnings ratio exhibits a fluctuating trend over the recorded periods. Starting at 17.38 in early 2020, the ratio increased to a peak above 26 by late 2020. Subsequently, it experiences a decline, reaching levels around 17 to 19 in mid-2022. From mid-2022 onwards, it generally trends upward again, with values reaching a high of 27.66 by late 2024 before slightly moderating to about 25.01 in mid-2025. This indicates periods of varying investor expectations or earnings performance impacting the valuation multiples.

Price to Operating Profit (P/OP) Ratio

The Price to Operating Profit ratio shows significant volatility. It rises from approximately 12.33 to nearly 19.12 by early 2022, reflecting increased market valuations relative to operating profit during that timeframe. Following this peak, a steady decline occurs, driving the ratio down to around 12.16-13.22 during mid-2022 to early 2023. Thereafter, the ratio climbs back to highs near 19.08 by late 2024, before a minor decline again by mid-2025. The oscillations suggest variability in operating profit performance and/or market sentiment.

Price to Sales (P/S) Ratio

The Price to Sales ratio remains generally in the range of 1.77 to 2.89. It shows a gradual increase from below 2 in early 2020 to a peak of 2.89 in early 2022. After this peak, the ratio decreases to a low of about 1.86 by early 2023, followed by a recovery and minor fluctuations, settling around 2.2 to 2.6 in the most recent periods. The pattern implies moderate variability in sales valuations, with some periods of higher premium likely reflecting revenue growth or market optimism.

Price to Book Value (P/BV) Ratio

The Price to Book Value ratio displays extreme volatility and unusually high values, with some data points reaching into three or four-digit figures, notably a peak of 1325.66 in early 2023. The ratios vary widely across the periods, decreasing substantially in the later intervals to values in the double-digit range around the 40s to 80s in mid-2025. These extreme fluctuations may indicate data irregularities or accounting effects impacting book value, such as asset revaluations, write-downs, or other extraordinary items affecting the denominator, severely distorting this valuation metric.

The share price exhibited considerable volatility over the observed period. Initially, the price rose significantly from $189.99 in May 2019 to a peak of $408.37 in October 2021. This growth was followed by periods of decline and recovery, with prices oscillating between approximately $287.92 and $378.99 from mid-2022 to early 2024. More recently, the price stabilized around the $350-$370 range, showing some upward momentum towards the end of the dataset.

Earnings per share (EPS) demonstrated a generally upward trajectory from the point data became available in early 2020. Starting at $10.46, EPS steadily increased to a peak of approximately $16.85 by early 2023. After this peak, EPS experienced a gradual decline, trending downwards to approximately $14.71 by May 2025, indicating some pressure on profitability or growth challenges in the most recent periods.

The price-to-earnings (P/E) ratio fluctuated throughout the period, reflecting the interplay between share price and earnings changes. Early values indicated a sharp increase from 17.38 in February 2020 to a peak of 26.76 in October 2021, coinciding with strong share price gains. Subsequently, the P/E ratio showed variability, with dips to the high teens and rebounds to the mid to upper twenties. This pattern suggests market adjustments to changes in expected earnings growth, investor sentiment, or valuation standards. The elevated P/E ratio in later periods, compared to the early phase, may indicate heightened market optimism or valuation premiums despite the recent EPS decline.

Overall, the data presents a picture of a company that experienced robust growth in equity value and earnings through 2021, followed by a period of earnings pressure and share price volatility. The fluctuations in the P/E ratio imply active market reassessment of the company's valuation in the face of shifting earnings trends.

The financial data reveals various patterns and trends in the company's share price, operating profit per share, and price-to-operating profit (P/OP) ratio over multiple quarters.

Share Price

The share price demonstrated substantial volatility during the period analyzed. Initially valued at $189.99 in early May 2019, the price rose steadily through 2019 and 2020, reaching a peak around $408.37 in late October 2021. Following this peak, the share price declined and fluctuated between approximately $287 and $325 for the next several quarters. There was a subsequent resurgence near $379 in early 2024, followed by another downtrend to about $351 in early 2025. Overall, the share price exhibited a cyclical pattern with pronounced peaks and troughs, indicating possible sensitivity to market or company-specific events.

Operating Profit Per Share (OPS)

Operating profit per share data commenced from the quarter ending February 2020. Initially reported at $14.74, it showed a consistent upward trajectory over time, peaking around $23.68 in early 2023. After reaching this high point, the operating profit per share remained relatively stable, hovering in the range of approximately $21.3 to $23.7 through early 2025. This trend suggests stable and improving operational profitability, with the company maintaining solid earnings performance per share despite fluctuations in the share price.

Price-to-Operating Profit (P/OP) Ratio

The P/OP ratio exhibited significant fluctuation throughout the periods observed. Starting at 12.33 in early 2020, it peaked at 19.12 in early 2022, indicating that share prices were high relative to operating profits at that time. Subsequently, the ratio declined to a low around 12.16 in early 2023, implying potentially undervalued shares compared to operating profits. The ratio then oscillated between roughly 14 and 19 towards the end of the period, reflecting variability in market valuation relative to earnings. This pattern may suggest shifts in market sentiment or expectations regarding future profitability.

In summary, the company's operating profitability exhibited a strong upward trend with stability in recent quarters, while the share price experienced notable volatility with multiple peaks and corrections. The valuation metric (P/OP ratio) varied accordingly, highlighting changing market perceptions relative to operating earnings. These observations may warrant further investigation into external factors influencing market behavior and the company's strategic initiatives to sustain profitability.

The analysis of the financial data reveals several notable trends in the share price, sales per share, and price-to-sales (P/S) ratio over the periods presented.

Share Price

The share price demonstrated considerable variability over the timeline. Initially, it experienced a steady increase from $189.99 in early May 2019 to a peak of $408.37 in October 2021. Following this peak, a significant decline is observed, with the price dropping to $287.92 by May 2022. After this decline, the share price exhibited a cyclical pattern with moderate fluctuations but generally maintained an upward trend, reaching $406.80 by October 2024 before slightly tapering off towards $368.06 in May 2025.

Sales Per Share

Sales per share data begins from February 2020 with a value of $102.56, and shows a consistent upward trend over the observed periods. The figure increases steadily, reflecting progressive growth quarter over quarter, reaching $163.78 by May 2025. This steady increase implies sustained revenue growth on a per-share basis over time.

Price-to-Sales (P/S) Ratio

The P/S ratio shows more volatility compared to sales per share. It begins at 1.77 in February 2020, then rises to a peak of 2.89 in January 2022. After this peak, the ratio declines notably to 1.86 by January 2023, indicating a relative reduction in share price compared to sales. Subsequently, the P/S ratio demonstrates fluctuations but remains generally between 2.0 and 2.6, suggesting varying market valuation sentiment relative to sales performance. Noteworthy is the increase to 2.61 in October 2024, which aligns with the share price peak during that period.

Overall, the data indicates that while sales per share have grown steadily, the share price and P/S ratio have experienced more pronounced volatility, reflecting changing market dynamics and investor sentiment. The strong growth in sales per share supports a positive fundamental outlook, while the fluctuations in share price and P/S ratio may be influenced by broader market factors and valuation reassessments.

Share Price Trend

The share price demonstrates a general upward trajectory from 2019 through mid-2024, with some volatility. Starting near $190 in May 2019, the price peaks at over $400 in October 2021 before experiencing a decline and fluctuations around the $300-$380 range thereafter. The price remains relatively strong into early 2025, indicating sustained investor interest despite intermittent periods of decrease.

Book Value per Share (BVPS) Movements

The BVPS exhibits significant variability including negative values in early periods, particularly from 2019 to mid-2020, reaching lows around -3.24. Subsequently, there is a recovery with values turning positive by late 2020 and continuing an upward trend into 2025, reaching 8 US$. This upward movement after a period of negative book values suggests improvements in net asset valuation or accounting adjustments over time.

Price-to-Book Value (P/BV) Ratio Analysis

P/BV ratios are exceptionally high and quite volatile, with data available primarily from early 2021 onward. The ratios reach extreme values, such as above 1300 and several instances exceeding 800, before progressively declining to around 46 by May 2025. Such elevated ratios indicate the market prices shares at a large premium over book value, reflecting investor expectations of future growth or intangible asset value beyond the book equity. The later decline in the ratio may indicate either an increase in book value relative to share price or moderation of share price growth relative to the book value.

Overall Financial Insights

The trends reveal that while market valuation has generally appreciated over time, this increase is accompanied by substantial fluctuations in fundamental net asset values and resulting valuation multiples. The movement from negative to positive book values over the period suggests balance sheet strengthening, but extremely high P/BV ratios point to a market valuation grounded more in growth or intangible value expectations than in book equity. The moderation of the P/BV ratio in recent quarters could signify a stabilization or realignment of market expectations with underlying fundamentals.