Home Depot Inc. (NYSE:HD)

Price to earnings (P/E) ratio

The P/E ratio exhibits notable fluctuations during the observed periods. It ascended from 17.38 in early 2020 to a peak of 24.51 in early 2021, followed by a decline to 17.09 by early 2023. Subsequently, it rose again to approximately 24.8 in early 2024 before slightly decreasing to 23.58 in early 2025. This pattern suggests intermittent changes in market valuation relative to earnings, indicating varying investor sentiment or earnings performance across years.

Price to operating profit (P/OP) ratio

The P/OP ratio mirrors the P/E trend, with an increase from 12.33 in 2020 to 17.25 in 2021, then a decline to 12.16 by 2023. Afterward, it rose again to 17.32 in 2024, followed by a decrease to 16.22 in 2025. This reflects similar dynamics in the valuation metric relative to operating profit, pointing to changes in profitability perception and operating earnings performance by the market.

Price to sales (P/S) ratio

This ratio increased from 1.77 in 2020 to 2.39 in 2021, decreased moderately to 1.86 by 2023, and then increased again to 2.46 in 2024, before slightly declining to 2.19 in 2025. The pattern suggests variability in the price investors are willing to pay per unit of sales, potentially influenced by changes in revenue growth or market expectations regarding sales sustainability.

Price to book value (P/BV) ratio

The P/BV ratio shows high volatility and substantial variation in magnitude, with data missing for some years. Recorded values exhibit an increase from 95.58 in 2021 to an extreme 187.12 in 2023, peaking at 359.76 in 2024, before sharply decreasing to 52.57 in 2025. Such large fluctuations indicate significant changes in market valuation relative to the company's book value, possibly driven by shifts in asset base, equity valuation, or market sentiment. The high values in the middle periods suggest a premium market stance, while the recent decline could reflect market corrections or changes in book equity.

An analysis of the financial data over a six-year period reveals several noteworthy trends related to stock price performance, earnings per share (EPS), and valuation multiples.

Share Price

The share price exhibited an overall upward trend from 181.76 US$ in early 2020 to a peak of 378.99 US$ in early 2024. Despite this general increase, the price experienced fluctuations, including an increase from 2020 to 2022, then a decline in 2023, followed by a strong recovery in 2024 before decreasing again in 2025. The volatility suggests sensitivity to market conditions or company-specific events within this period.

Earnings Per Share (EPS)

EPS demonstrated a rising trend from 10.46 US$ in 2020 to a peak of 16.85 US$ in 2023. However, there was a slight decline following this peak, with EPS decreasing to 15.28 US$ in 2024 and further to 14.89 US$ in 2025. This indicates that while profitability generally improved over the period, recent decreases may warrant attention regarding earnings sustainability.

Price-to-Earnings (P/E) Ratio

The P/E ratio displayed notable fluctuations, starting at 17.38 in 2020, rising significantly to 24.51 in 2021, suggesting increased market valuation relative to earnings during that year. Subsequently, it declined to 17.09 in 2023, before climbing again to around 24.8 in 2024 and slightly decreasing to 23.58 in 2025. This pattern indicates varying investor sentiment and market expectations of future earnings growth throughout the period.

Overall, the data indicates that the company experienced substantial growth in share price and earnings through most of the observed years, although the recent period shows signs of moderating earnings alongside fluctuating market valuations. The divergence between EPS and share price movements in some years suggests that external factors may also influence market perceptions and pricing beyond fundamental earnings performance.

Share Price

The share price exhibited significant growth from February 2020 to January 2022, rising from 181.76 US$ to 317.05 US$. Following this peak, there was a slight decline in January 2023 to 287.97 US$, before rebounding sharply to 378.99 US$ in January 2024. The price then experienced another moderate decline to 351.15 US$ by February 2025. Overall, the share price showed a strong upward trend with some fluctuations in the later years.

Operating Profit Per Share

Operating profit per share increased consistently from 14.74 US$ in February 2020 to a peak of 23.68 US$ in January 2023. After reaching this high point, it declined gradually to 21.89 US$ in January 2024 and further to 21.66 US$ in February 2025. Despite this slight decrease in the last two years, the general trend over the six-year period was upward, indicating an improvement in profitability per share over time.

Price to Operating Profit Ratio (P/OP)

The P/OP ratio fluctuated over the observed period. Initially, the ratio rose from 12.33 in February 2020 to 17.25 in January 2021, signaling increased market valuation relative to operating profit. It then decreased to 14.22 in January 2022 and further to 12.16 in January 2023, implying a more favorable valuation. However, the ratio increased again to 17.32 in January 2024 and remained relatively high at 16.22 in February 2025. These variations indicate fluctuating market sentiment and valuation multiples over time.

Summary

Overall, the financial data reveal a positive trend in both share price and operating profit per share over the six-year span, reflecting improved operational performance and investor confidence. However, the fluctuations in the price to operating profit ratio suggest varying market perceptions regarding the company's earnings prospects. The recent slight decline in operating profit per share, coupled with a high P/OP ratio, could indicate a period of market optimism despite modest profit decreases.

Share Price

The share price exhibited a generally upward trend from February 2, 2020, to January 28, 2024, increasing from $181.76 to a peak of $378.99. However, it declined to $351.15 by February 2, 2025. This pattern indicates a significant growth phase followed by a modest correction in the latest period.

Sales Per Share

Sales per share consistently increased throughout the entire period, rising from $102.56 in early 2020 to $160.47 by early 2025. The growth was steady, with only a marginal dip between January 29, 2023, and January 28, 2024, where it decreased slightly from $155.08 to $154.05, before increasing again.

Price-to-Sales (P/S) Ratio

The P/S ratio showed volatility across the analyzed timeframe. Starting at 1.77 in 2020, it rose to 2.39 in 2021, then decreased to 1.86 by 2023. A subsequent increase to 2.46 occurred by 2024, followed by another decrease to 2.19 in 2025. These fluctuations suggest changes in market valuation relative to sales, reflecting varying investor sentiment or changes in expected future growth.

Share Price Trend

The share price exhibited a general upward trajectory from February 2020 through January 2024, starting at $181.76 and reaching a peak of $378.99. However, in the most recent period ending February 2025, the share price declined to $351.15. This indicates strong appreciation over the long term, despite the slight pullback in the latest year.

Book Value Per Share (BVPS) Behavior

The book value per share showed considerable volatility over the analyzed periods. It started at a negative value of -$2.90 in February 2020, moved to positive territory at $3.06 in January 2021, then declined sharply to -$1.64 in January 2022. From that point onward, BVPS remained positive but fluctuated, recording $1.54, $1.05, and finally increasing markedly to $6.68 by February 2025. This variability suggests instability or significant changes in equity composition or retained earnings across these years.

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

The P/BV ratio data is partially missing but indicates substantial fluctuations when available. The ratio was extremely high at 95.58 in January 2021, soared to 187.12 in January 2023, and peaked further at 359.76 in January 2024, before dropping sharply to 52.57 in February 2025. The elevated P/BV ratios reflect that the market price per share was valued far above its book value during most periods, potentially indicating investor optimism or a market premium on expected earnings or intangible assets. The significant decline in 2025 suggests a reassessment or correction in valuation.

Overall Insights

The financial data reveals a pattern of strong market confidence as reflected in rising share prices, despite fluctuations and instability in the book value per share. The high and variable P/BV ratios imply a market consistently valuing the company considerably above its net asset value, likely driven by growth expectations or earnings potential. The recent corrections in share price and P/BV ratio may reflect adjustments to a more balanced valuation or responses to changes in company fundamentals or market conditions.