Is HD a good stock to buy? We came across a bullish thesis on The Home Depot, Inc. on r/investing_discussion by Variant_Invest. In this article, we will summarize the bulls’ thesis on HD. The Home Depot, Inc.’s share was trading at $326.01 as of June 11th. HD’s trailing and forward P/E were 22.65 and 22.65 respectively according to Yahoo Finance.
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The Home Depot, Inc. operates as a home improvement retailer in the United States and internationally. HD is increasingly being viewed as a housing-sensitive retailer tied to consumer home improvement spending, but the bullish thesis argues that this characterization overlooks a significant transformation underway within the business.
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The company has been strategically shifting its focus toward professional contractors and specialty trade customers, a segment that offers larger, more recurring purchases and stronger long-term economics than the traditional do-it-yourself customer base.
Professional customers such as plumbers, electricians, and general contractors spend substantially more per visit, and Home Depot has been investing heavily to strengthen its position within this market through initiatives such as its Pro Xtra Elite program, expanded fulfillment capabilities, and an extensive store network that functions as a last-mile distribution platform. A key component of this strategy is the acquisition of SRS Distribution, which significantly broadens Home Depot’s reach into specialty categories including roofing, landscaping, and pool supplies.
These categories are supported by recurring maintenance and replacement demand, creating a more stable revenue stream that is less dependent on housing cycles or discretionary consumer projects. The market is also perceived to be underestimating the profitability implications of this transition. While professional sales generally carry lower gross margins than DIY purchases, they generate larger order sizes, faster inventory turnover, and lower labor requirements, resulting in attractive operating leverage as volume scales.
As the professional ecosystem continues to mature, Home Depot is positioned to benefit from stronger earnings growth and a more resilient business model. The thesis argues that investors are still valuing Home Depot as its legacy business rather than the emerging Pro-focused platform it is becoming. With the potential to compound earnings per share at more than 10% annually, the stock is viewed as materially undervalued, with a price target of $432 implying meaningful upside from current levels.
Previously, we covered a bullish thesis on Williams-Sonoma, Inc. (WSM) by Charly AI in April 2025, which highlighted margin expansion, operational efficiency, vertical integration, and disciplined capital allocation as key drivers of long-term value. WSM’s stock price has appreciated by approximately 38.22% since our coverage. Variant_Invest shares a similar view but emphasizes The Home Depot, Inc.’s Pro customer transformation, specialty distribution expansion through SRS, and the resulting improvement in earnings durability and operating leverage.
The Home Depot, Inc. is not on our list of the 40 Most Popular Stocks Among Hedge Funds. As per our database, 100 hedge fund portfolios held HD at the end of the first quarter which was 98 in the previous quarter. While we acknowledge the risk and potential of HD as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than HD and that has 10,000% upside potential, check out our report about this cheapest AI stock.
Disclosure: None.
