Should I exit my Home Depot (NYSE:HD) holdings?

HD
 Stock
  

USD 283.70  7.76  2.81%   

Today's article will digest Home Depot. We will cover the possibilities of making Home Depot into a steady grower in September. As of August 16, 2022, the company is listed at 314.89. Home Depot has historical hype elasticity of 0.69. The average price elasticity to hype of competition is about -0.12. The entity is forecasted to increase in value after the next headline, with the price going to jump to 315.0. The average volatility of media hype impact on Home Depot stock price is about 39.48%. The price growth on the next news is projected to be 0.12%, whereas the daily expected return is currently at 0.18%. The volatility of related hype on Home Depot is about 229.53% with expected price after next announcement by competition of 314.77 Allowing for the 90-day total investment horizon the next forecasted press release will be in about 8 days.
Published over a month ago
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Home Depot's average rating is Buy from 21 analysts.
Macroaxis provides investment recommendation on Home Depot to complement and cross-verify current analyst consensus on Home Depot. Our trade recommendations engine determines the entity's potential to grow exclusively from the perspective of an investor's current risk tolerance and investing horizon.
Earning per share calculations of Home Depot is based on official Zacks consensus of 10 analysts regarding Home Depot's future annual earnings. Given the historical accuracy of 94.62%, the future earnings per share of the company is estimated to be 15.47 with the lowest and highest values of 15.0 and 15.89, respectively. Please note that this consensus of annual earnings estimates for the firm is an estimate of EPS before non-recurring items and including employee stock options expenses.
The successful prediction of Home Depot stock price could yield a significant profit to investors. But is it possible? The efficient-market hypothesis suggests that all published stock prices of traded companies, such as Home Depot, already reflect all publicly available information. This academic statement is a fundamental principle of many financial and investing theories used today. However, the typical investor usually disagrees with a 'textbook' version of this hypothesis and continually tries to find mispriced stocks to increase returns. We use internally-developed statistical techniques to arrive at the intrinsic value of Home Depot based on Home Depot hews, social hype, general headline patterns, and widely used predictive technical indicators.
We also calculate exposure to Home Depot's market risk, different technical and fundamental indicators, relevant financial multiples and ratios, and then comparing them to Home Depot's related companies.

Use Technical Analysis to project Home Depot expected Price

Home Depot technical stock analysis exercises models and trading practices based on price and volume transformations, such as the moving averages, relative strength index, regressions, price and return correlations, business cycles, stock market cycles, or different charting patterns.
A focus of Home Depot technical analysis is to determine if market prices reflect all relevant information impacting that market. A technical analyst looks at the history of Home Depot trading pattern rather than external drivers such as economic, fundamental, or social events. It is believed that price action tends to repeat itself due to investors' collective, patterned behavior. Hence technical analysis focuses on identifiable price trends and conditions. More Info...

What do experts say?

Stock analysis is a method for investors and traders to make buying and selling decisions. By studying and evaluating past and current data, investors and traders attempt to gain an edge in the markets by making informed decisions.
It is good to see analyst projects for Home Depot, but it might be worth checking our own buy vs. sell analysis

Is Home Depot valued correctly by the market?

The modest gains experienced by current holders of Home Depot may raise some interest from shareholders. The stock closed today at a share price of 314.89 on 2,268,762 in trading volume. The company directors and management have been quite successful in maneuvering the stock at opportune times to take advantage of all market conditions in July. The stock standard deviation of daily returns for 90 days investing horizon is currently 1.52. The below-average Stock volatility is a good sign for longer-term investment options and for buy-and-hold investors.

Deferred Revenue Breakdown

Home Depot Deferred Revenue is increasing over the years with slightly volatile fluctuation. Deferred Revenue is expected to dwindle to about 3.4 B. Deferred Revenue usually refers to a component of Total Liabilities representing the carrying amount of consideration received or receivable on potential earnings that were not recognized as revenue; including sales; license fees; and royalties; but excluding interest income. Home Depot Deferred Revenue is projected to increase significantly based on the last few years of reporting. The past year's Deferred Revenue was at 3.6 Billion
2010
2015
2020
2022
20101.47 Billion
20152.12 Billion
20203.6 Billion
20223.38 Billion

Will Home Depot continue to surge?

The potential upside is down to 2.39 as of today. Home Depot has relatively low volatility with skewness of -0.89 and kurtosis of 1.37. However, we advise all investors to independently investigate Home Depot to ensure all accessible information is consistent with the expectations about its upside potential and future expected returns. Understanding different market volatility trends often help investors to time the market. Properly using volatility indicators enable traders to measure Home Depot's stock risk against market volatility during both bullying and bearish trends. The higher level of volatility that comes with bear markets can directly impact Home Depot's stock price while adding stress to investors as they watch their shares' value plummet. This usually forces investors to rebalance their portfolios by buying different stocks as prices fall.

Home Depot Implied Volatility

Home Depot's implied volatility exposes the market's sentiment of Home Depot stock's possible movements over time. However, it does not forecast the overall direction of its price. In a nutshell, if Home Depot's implied volatility is high, the market thinks the stock has potential for high price swings in either direction. On the other hand, the low implied volatility suggests that Home Depot stock will not fluctuate a lot when Home Depot's options are near their expiration.

Our Takeaway on Home Depot Investment

Although few other entities under the home improvement retail industry are still a bit expensive, Home Depot may offer a potential longer-term growth to shareholders. With an optimistic outlook on your 90 days horizon, it may be a good time to pick up new shares of Home Depot or increase your existing holdings in the Stock as it seems the potential growth has not yet been fully factored into the current price. Please use our equity advice module to run different scenarios to ensure your current risk level and investment horizon are fully reflective of your current investing preferences in regards to Home Depot.

Editorial Staff

This story should be regarded as informational only and should not be considered a solicitation to sell or buy any financial products. Macroaxis does not express any opinion as to the present or future value of any investments referred to in this post. This post may not be reproduced without the consent of Macroaxis LLC. Macroaxis LLC and Gabriel Shpitalnik do not own shares of Home Depot. Please refer to our Terms of Use for any information regarding our disclosure principles.

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