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Investors pay 22.3 times earnings for Home Depot (HD) stock. That valuation is higher than for its closest rival, Lowe’s, or for Amazon, but lower than for Walmart or Costco. Among these five large retailers, Home Depot retains the highest share of its sales as operating profit, yet it recorded the slowest sales growth over each company’s latest four quarters. So how much extra are you paying for Home Depot’s margin?
Home Depot Costs A Third More Than Lowe’s
As the only other home improvement retailer in the group, Lowe’s trades at 16.7 times earnings. This means a dollar of Home Depot’s profit costs investors about a third more. That premium buys a wider margin: Home Depot recorded a 12.4% operating margin over its latest four quarters, compared with 11.4% at Lowe’s. It does not buy faster growth. Lowe’s increased its sales by 8.2% over its own latest four quarters, while Home Depot saw sales rise 2.5%.
Both home improvement stocks lost ground in the year to October 27, 2026. Home Depot fell 15.3% including dividends and Lowe’s dropped 16.6%, while Amazon, Walmart and Costco all posted gains. Walmart and Costco cost more than Home Depot and grew faster, but both operate as consumer staples retailers with operating margins of 4.4% and 3.9%. Amazon, a broadline retailer, trades at a lower multiple of earnings and grew faster, with a margin only slightly thinner. But its $135 billion of net income ran above its $93.7 billion operating profit, so on operating profit alone it costs more than Home Depot.
Is Home Depot’s Margin Its Thinnest In A Decade?
On a twelve-month basis, it is. Over the four quarters to August 2, 2026, Home Depot reported its lowest operating margin at any quarter end in the past ten years, falling from a high of 15.3%.
The latest quarter benefited from tariff refunds. Home Depot booked $685 million of refunds against the cost of products it had already sold, which management said added about 145 basis points to gross margin. Rising fuel, energy and input costs, alongside a product mix shift toward GMS and Mingledorff’s, two businesses Home Depot bought, took most of that back, management said. Even with that benefit, the quarter’s operating margin was 14.3%, down from 14.5% a year earlier.
