Published on 20 Nov 2022 on Simply Wall St. via Yahoo Finance
When close to half the companies in the United States have price-to-earnings ratios (or "P/E's") below 14x, you may consider The Home Depot, Inc. (NYSE:HD) as a stock to potentially avoid with its 18.8x P/E ratio. However, the P/E might be high for a reason and it requires further investigation to determine if it's justified.
There hasn't been much to differentiate Home Depot's and the market's earnings growth lately. One possibility is that the P/E is high because investors think this modest earnings performance will accelerate. If not, then existing shareholders may be a little nervous about the viability of the share price.
See our latest analysis for Home Depot