GET DAILY SIGNALSIs the selloff from Home Depot's earnings overdone?
Home improvement retailer Home Depot (NYSE: HD) reported earnings on November 19. The company beat its EPS estimate, but missed its revenue estimate and lowered its revenue forecast for the year. The stock has tumbled 8.5% since the earnings report. Personally, I think the selloff is overdone and is providing investors with an opportunity at this time.
Home Depot has seen its earnings grow by 21% per year over the last three years and earnings were up 1% in the third quarter. Revenue has increased at a rate of 6% per year over the last three years and they were up by 4% in the third quarter.
When you combine the sales growth with the profit margin and the return on equity, you get the Tickeron SMR rating. Home Depot's SMR rating is 1 and that is the best rating a company can get. It indicates very strong sales and a profitable business model. SMR (Sales, Margin, Return on Equity) rating is based on comparative analysis of weighted Sales, Income Margin and Return on Equity values compared against S&P 500 index constituents.
In addition to the SMR rating being well above average, the Profit vs. Risk Rating for Home Depot is 19, indicating risk-aware approach on strong performance. The average Profit vs. Risk Rating for the industry is 60, placing this stock well above average.
The Tickeron PE Growth Rating is 38, pointing to consistent earnings growth. The PE Growth rating is based on a comparative analysis of stock PE ratio increase over the last 12 months compared against S&P 500 index constituents. A rating of 1 indicates highest PE growth while a rating of 100 indicates lowest PE growth.
Not all of Home Depot's ratings are above average. For instance, the Valuation Rating is at 64 and it indicates that the company is fair valued in the industry. A rating of 1 points to the most undervalued stocks, while a rating of 100 points to the most overvalued stocks. With the 64 rating, the company is slightly worse than average on its valuation rating.
The same can be said for the Price Growth Rating, Home Depot is slightly worse than average with a rating of 69. This rating indicates that stock price has grown at a slightly slower pace than S&P 500 components. The Price Growth Rating looks at price growth over the last 12 months.
Looking at the daily chart for Home Depot over the past year, the stock has been trending higher with a trend channel marking the various cycles within the overall upward trend. The lower rail of the channel is formed by the low from last December and the lows from May and August. The stock just hit the lower rail earlier this week.
We also see on the chart that Home Depot's overbought/oversold indicators have both reached oversold territory as a result of this pullback. The stochastic readings made a bullish crossover on November 25 and that could be a sign that the stock is ready to bounce.
The sentiment toward Home Depot is average to slightly skewed to the bearish side. There are 33 analysts covering the stock with 19 "buy" ratings, 13 "hold" ratings, and one "sell" rating. This puts the overall buy percentage at 57.6% and that is a sign of slightly more pessimism than the average stock.
The short interest ratio is at 3.1 and that reading falls in the average range. This reading is from October 31 and doesn't reflect what has happened to short interest since the earnings report. We should get the mid-November reading in the next few days and the end of November report will come out in the second week of December. That will be the first short interest report that reflects what has happened since the earnings report.
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Harry Richardson — Algorithmic Trader & Strategy Developer Harry is an algorithmic trader specializing in impulse and breakout trading strategies across cryptocurrency and equity markets. With more than 10 years of experience in developing automated trading systems, he focuses on building structured algorithms designed to capture momentum while maintaining strict risk control. His approach combines quantitative analysis, real-market execution, and continuous performance monitoring. Vitalii prioritizes risk management, drawdown control, and strategy stability over short-term optimization, ensuring algorithms are adaptable to changing market conditions. He has developed and tested hundreds of automated strategies, working extensively with live trading environments, forward testing, and portfolio-level algorithm management. His work centers on transforming trading ideas into fully operational, scalable automated systems.
Momentum Indicator for HD turns positive, indicating new upward trend
HD saw its Momentum Indicator move above the 0 level on October 12, 2026. This is an indication that the stock could be shifting in to a new upward move. Traders may want to consider buying the stock or buying call options. Tickeron's A.I.dvisor looked at 71 similar instances where the indicator turned positive. In 46 of the 71 cases, the stock moved higher in the following days. The odds of a move higher are at 65%.
Technical Analysis (Indicators)
Bullish Trend Analysis
The Moving Average Convergence Divergence (MACD) for HD just turned positive on October 07, 2026. Looking at past instances where HD's MACD turned positive, the stock continued to rise in 26 of 44 cases over the following month. The odds of a continued upward trend are 59%.
HD moved above its 50-day moving average on October 20, 2026 date and that indicates a change from a downward trend to an upward trend.
The 10-day moving average for HD crossed bullishly above the 50-day moving average on October 26, 2026. This indicates that the trend has shifted higher and could be considered a buy signal. In 9 of 15 past instances when the 10-day crossed above the 50-day, the stock continued to move higher over the following month. The odds of a continued upward trend are 60%.
Following a +3.70% 3-day Advance, the price is estimated to grow further. Considering data from situations where HD advanced for three days, in 192 of 307 cases, the price rose further within the following month. The odds of a continued upward trend are 63%.
The Aroon Indicator entered an Uptrend today. In 135 of 247 cases where HD Aroon's Indicator entered an Uptrend, the price rose further within the following month. The odds of a continued Uptrend are 55%.
Bearish Trend Analysis
The RSI Oscillator demonstrated that the stock has entered the overbought zone. This may point to a price pull-back soon.
The Stochastic Oscillator demonstrated that the ticker has stayed in the overbought zone for 17 days. The longer the ticker stays in the overbought zone, the sooner a price pull-back is expected.
Following a 3-day decline, the stock is projected to fall further. Considering past instances where HD declined for three days, the price rose further in 50 of 62 cases within the following month. The odds of a continued downward trend are 60%.
HD broke above its upper Bollinger Band on November 04, 2026. This could be a sign that the stock is set to drop as the stock moves back below the upper band and toward the middle band. You may want to consider selling the stock or exploring put options.
Fundamental Analysis (Ratings)
The Tickeron SMR rating for this company is 14 (best 1 - 100 worst), indicating very strong sales and a profitable business model. SMR (Sales, Margin, Return on Equity) rating is based on comparative analysis of weighted Sales, Income Margin and Return on Equity values compared against S&P 500 index constituents. The weighted SMR value is a proprietary formula developed by Tickeron and represents an overall profitability measure for a stock.
The Tickeron Price Growth Rating for this company is 45 (best 1 - 100 worst), indicating steady price growth. HD’s price grows at a higher rate over the last 12 months as compared to S&P 500 index constituents.
The Tickeron PE Growth Rating for this company is 60 (best 1 - 100 worst), pointing to consistent earnings growth. The PE Growth rating is based on a comparative analysis of stock PE ratio increase over the last 12 months compared against S&P 500 index constituents.
The Tickeron Profit vs. Risk Rating rating for this company is 70 (best 1 - 100 worst), indicating that the returns do not compensate for the risks. HD’s unstable profits reported over time resulted in significant Drawdowns within these last five years. A stable profit reduces stock drawdown and volatility. The average Profit vs. Risk Rating rating for the industry is 84, placing this stock better than average.
The Tickeron Seasonality Score of 85 (best 1 - 100 worst) indicates that the company is significantly overvalued in the industry. The Tickeron Seasonality score describes the variance of predictable price changes around the same period every calendar year. These changes can be tied to a specific month, quarter, holiday or vacation period, as well as a meteorological or growing season.
The Tickeron Valuation Rating of 90 (best 1 - 100 worst) indicates that the company is significantly overvalued in the industry. This rating compares market capitalization estimated by our proprietary formula with the current market capitalization. This rating is based on the following metrics, as compared to industry averages: HD's P/B Ratio (21.341) is slightly higher than the industry average of (1.560). P/E Ratio (24.839) is within average values for comparable stocks, (15.054). HD's Projected Growth (PEG Ratio) (2.446) is slightly higher than the industry average of (1.177). Dividend Yield (0.026) settles around the average of (0.223) among similar stocks. HD's P/S Ratio (1.781) is slightly higher than the industry average of (0.937).
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General Information
a retailer of assortment of building materials and home improvement products
Industry HomeImprovementChains
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