Home Depot Expands Pro Market With GMS and SRS Pairing

The Home Depot, Inc. HD has broadened its professional market reach through the acquisition of GMS by its SRS Distribution business. GMS is a prominent distributor of specialty building products, including drywall, ceilings and steel framing, which are essential for complex remodeling and new construction. This integration enables Home Depot to leverage GMS' specialized product categories and customer relationships, enhancing its multi-category distribution model.This pairing is significant because it brings differentiated customer relationships and product categories that are highly complementary to the existing SRS business. By combining GMS' specialty distribution with Home Depot's retail reach and SRS' roofing strength, the company is positioning itself as a one-stop shop for complex professional projects. The acquisition has contributed roughly $900 million in sales during just eight weeks of the third quarter.For fiscal 2025, GMS is expected to contribute about $2 billion in incremental sales to Home Depot's top line. This expansion into technical specialty trade categories effectively broadens the company's total addressable market within the professional segment. By focusing on specialized building products, the company can better serve professional contractors working on intricate builds that require reliable material delivery and advanced project planning tools.With more than 1,200 SRS locations in the network, the addition of GMS expands Home Depot’s participation in specialty building products distribution and increases its ability to serve professional customers through a wider set of trade categories tied to construction-related spending.What the Latest Metrics Say About Home DepotHome Depot, which competes with Floor & Decor Holdings, Inc. FND and Lowe's Companies, Inc. LOW, has seen its shares fall 10.1% in the past year compared with the industry’s decline of 15.7%. While shares of Floor & Decor Holdings have declined 37.2%, Lowe’s has fallen 0.9% in the said period. Image Source: Zacks Investment ResearchFrom a valuation standpoint, Home Depot trades at a forward price-to-earnings ratio of 23.24, higher than the industry’s 21.14. HD carries a Value Score of F. Home Depot is trading at a discount to Floor & Decor Holdings (with a forward 12-month P/E ratio of 29.43) but at a premium to Lowe’s (18.89).  Image Source: Zacks Investment ResearchThe Zacks Consensus Estimate for Home Depot’s current financial-year sales implies year-over-year growth of 3.2%, while the same for earnings per share suggests a decline of 4.8%. Image Source: Zacks Investment ResearchHome Depot currently carries a Zacks Rank #5 (Strong Sell).You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.Radical New Technology Could Hand Investors Huge GainsQuantum Computing is the next technological revolution, and it could be even more advanced than AI.While some believed the technology was years away, it is already present and moving fast. Large hyperscalers, such as Microsoft, Google, Amazon, Oracle, and even Meta and Tesla, are scrambling to integrate quantum computing into their infrastructure.Senior Stock Strategist Kevin Cook reveals 7 carefully selected stocks poised to dominate the quantum computing landscape in his report, Beyond AI: The Quantum Leap in Computing Power.Kevin was among the early experts who recognized NVIDIA's enormous potential back in 2016. Now, he has keyed in on what could be "the next big thing" in quantum computing supremacy. Today, you have a rare chance to position your portfolio at the forefront of this opportunity.See Top Quantum Stocks Now >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Lowe's Companies, Inc. (LOW): Free Stock Analysis Report The Home Depot, Inc. (HD): Free Stock Analysis Report Floor & Decor Holdings, Inc. (FND): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks