Home Depot Inc. (NYSE:HD)

The financial data demonstrates notable fluctuations and overall growth in Home Depot's market valuation and invested capital over the six-year period from February 2020 to February 2025.

Market (fair) value

The market value experienced substantial growth from US$237,480 million in February 2020, peaking at US$377,475 million in January 2022. Following this peak, there was a decline in January 2023 to US$341,270 million, then a recovery to US$425,480 million by January 2024. The value slightly decreased again to US$407,112 million in February 2025. This pattern suggests periods of volatility, with a general upward trajectory over the observed timeframe.

Invested capital

The invested capital increased steadily from US$36,678 million in February 2020 to US$72,841 million in February 2025. Although there was a minor dip between January 2021 (US$49,973 million) and January 2022 (US$48,299 million), the overall trend points to rising capital investment, potentially reflecting expansion or reinvestment strategies.

Market value added (MVA)

MVA, representing the difference between market value and invested capital, reflects the value creation beyond the capital invested. It rose sharply from US$200,802 million in February 2020 to a high of US$329,176 million in January 2022. Subsequently, MVA decreased to US$286,159 million in January 2023 but recovered to US$369,596 million in January 2024 before declining to US$334,271 million in February 2025. This fluctuation mirrors the market value changes and emphasizes periods of varying investor confidence or market performance relative to invested capital.

In summary, the data indicates an overall growth in market value and invested capital for the company, with some volatility in market valuations and value creation metrics. The steady increase in invested capital suggests ongoing investment in business operations, while the fluctuations in market value and MVA imply sensitivity to market conditions or company-specific events impacting investor perceptions and value generation.

The financial data reflects significant fluctuations and trends across the reported periods, focusing on market value added (MVA), invested capital, and the MVA spread ratio.

Market Value Added (MVA)

The MVA demonstrates an overall increasing tendency from 200,802 million US$ in early 2020, reaching a peak of 369,596 million US$ by early 2024. However, there is notable volatility, with a decline observed in 2023 to 286,159 million US$, followed by a partial recovery in 2024 and a subsequent decrease in 2025 to 334,271 million US$. This pattern suggests variable market perceptions of the company’s value creation over time.

Invested Capital

The invested capital shows a consistent upward trend throughout the years, increasing from 36,678 million US$ in 2020 to 72,841 million US$ by 2025. This doubling of invested capital indicates expanding financial commitment or asset base, which may underpin operational or strategic growth initiatives during the period.

MVA Spread Ratio

The MVA spread ratio, reflecting the efficiency in creating market value over invested capital, reaches its highest level in early 2022 at 681.54%, indicating a period when the company generated exceptional value relative to its capital. However, this ratio declines notably in subsequent years, dropping to 458.91% by 2025, signaling a reduction in relative value creation efficiency despite increasing invested capital. This decline could imply rising costs, lower returns, or changing market conditions impacting perceived value generation.

In summary, while invested capital steadily increased, market value added experienced significant variations with peaks and troughs, and the efficiency represented by the MVA spread ratio diminished in the latter years. These observations highlight a complex dynamic between investment and value creation, warranting further analysis into operational effectiveness and strategic decisions influencing these trends.

Market Value Added (MVA)

The market value added displayed a general increasing trend over the observed periods, starting at 200,802 million US dollars in early 2020 and reaching a peak of 369,596 million US dollars in early 2024. A notable dip occurred in early 2023 when the MVA decreased to 286,159 million US dollars. By early 2025, the MVA slightly declined from the previous year, recording 334,271 million US dollars, reflecting some volatility after the peak.

Adjusted Net Sales

Adjusted net sales exhibited consistent growth from 110,559 million US dollars in early 2020 to 156,871 million US dollars by early 2023. After this peak, a minor decrease occurred in early 2024 to 152,367 million US dollars, followed by another increase in early 2025 to 159,362 million US dollars. This pattern indicates overall expansion in sales with slight fluctuations in the latter periods.

MVA Margin

The MVA margin showed significant variability throughout the years. It began at 181.62% in early 2020, rose sharply to 237.6% in early 2021, and then declined to 216.66% in early 2022. Another notable decrease occurred in early 2023 to 182.42%, followed by a strong recovery to 242.57% in early 2024. The margin settled at 209.76% in early 2025, suggesting fluctuating profitability relative to the market value generated.