Home Depot or FGI Industries: Where Should Investors Place Their Bets?

The home improvement market is vast, competitive and constantly evolving, and in this space, The Home Depot Inc. HD and FGI Industries Ltd. FGI represent two contrasting yet compelling business models. Home Depot is a retail giant with a dominant market share, a robust supply chain and a stronghold in both DIY and professional segments across North America. Its massive scale, brand equity and omnichannel reach make it a household name and a clear leader in the industry.In contrast, FGI Industries operates as a specialized manufacturer and distributor, focusing on bath and kitchen products, including vanities, sinks and storage solutions. Though much smaller in size, FGI’s nimbleness, cost efficiency and focus on niche categories give it a unique edge, especially in value-driven and private-label segments.As housing trends shift and consumer behavior evolves, this face-off raises a key question: Can focus and agility compete with scale and brand power in today’s home improvement landscape?The Case for HD: Scale, Strategy & Staying PowerHome Depot stands as a cornerstone in the vast U.S. home improvement industry, commanding significant market share and influencing trends across both professional and DIY segments. With a vast network of stores and a broad assortment that spans construction materials, home décor, appliances, and tools, the company has cemented its position as a go-to destination for homeowners and contractors alike.HD’s balanced customer base, equally weighted between Pro and DIY, enhances its resilience and allows it to capture demand from both individual home projects and large-scale renovations. In an industry supported by aging housing stock and chronic supply shortages, Home Depot’s scale and brand strength give it a powerful edge.Home Depot continues to strengthen its competitive moat with its "One Home Depot" strategy, an integrated omnichannel approach that blends digital and in-store experiences. Customers benefit from flexible shopping, real-time inventory and smooth fulfillment. Recent expansions into specialty trade services and Pro-focused partnerships boost its value proposition, helping the company capture more wallet share and become more deeply embedded in professional workflows.Financially, Home Depot remains a solid performer with disciplined execution and a long-term growth focus. Despite macro headwinds, it maintains strong profitability, driven by efficiency and brand trust. As a one-stop home improvement destination, it serves a broad customer base. Continued investments in supply-chain upgrades, digital tools and contractor services support sustainable growth. For long-term investors, Home Depot offers a compelling case, backed by market leadership, operational strength and a commitment to innovation.The Case for FGI: Strategic Growth in Kitchen & Bath InnovationFGI Industries, a global kitchen and bath solutions provider, continues to carve out a growing niche in the consumer goods space with a diversified portfolio and strategic brand positioning. In first-quarter 2025, the company reported an 8% year-over-year revenue increase to $33.2 million, significantly outpacing the broader market amid tariff headwinds. The Bath Furniture and Covered Bridge cabinetry segments led the charge with 32.7% and 135.7% growth, respectively, highlighting FGI’s strength in tapping high-growth categories and expanding geographic and dealer footprints.At the heart of FGI’s business strategy is a focus on repair-and-remodel demand, bolstered by partnerships across retail, wholesale and digital channels. Its AI-driven Isla Porter platform is an emerging growth driver, engaging the premium kitchen design market with tailored offerings and digital customization. The company’s multi-brand strategy enables it to address diverse consumer demographics, from value-seeking remodelers to upscale renovators, while steadily building brand equity across North America and select international markets.Despite a net loss of $0.6 million in the quarter due to increased investments and tariff-related pressures, FGI is positioning itself for long-term profitability. The company ended first-quarter with $14.3 million in liquidity and reaffirmed its $135-$145 million revenue guidance for 2025, underscoring confidence in its brand-led growth and digital-forward initiatives.How Does the Zacks Consensus Estimate Compare for HD & FGI?Home Depot’s fiscal 2025 sales are projected to grow 3.1% year over year to $164.5 billion and EPS is expected to decline 1.3% year over year to $15.04. HD’s EPS estimates for fiscal 2025 were unchanged in the last 30 days. Home Depot’s annual sales and earnings are slated to increase 4.4% and 9.2% year over year, respectively, in fiscal 2026.HD’s Estimate Revision Trend Image Source: Zacks Investment Research FGI Industries’ 2025 sales are expected to increase 5.5% year over year to $139 million, and loss per share is anticipated to be 18 cents, whereas it incurred a loss of 10 cents in the year-ago quarter. FGI’s bottom-line estimates for 2025 have been unchanged in the past 30 days.FGI’s Estimate Revision Trend Image Source: Zacks Investment Research This clearly illustrates that EPS estimates for both Home Depot and FGI Industries have been unchanged in the past 30 days. However, FGI’s estimates indicate soft top and bottom-line performances for 2025.Price Performance & Valuation Comparisons of HD & FGIIn the past year, Home Depot’s stock has an edge in terms of performance, recording growth of 1.3%. This has noticeably lagged the benchmark S&P 500’s return of 13.3% but has outperformed FGI Industries’ 22.8% decline.1-Year Price Performance Image Source: Zacks Investment Research From a valuation perspective, Home Depot trades at a forward price-to-earnings (P/E) multiple of 23.21X, which is above its 3-year median of 21.5X. Meanwhile, FGI is trading at 20.82X, above its 5-year median of 5.88X, but below HD’s multiple.Home Depot’s stock seems pricey. Its premium valuations reflect its superior alignment with Pro customers, and well-recognized and trusted private-label portfolio, reinforcing its market leadership. If the company sustains its aggressive focus on Pro contractors and investments in supply-chain efficiency, the premium can be warranted.Conversely, FGI Industries appears undervalued from a valuation standpoint. The company’s accelerating growth, strategic diversification and digital innovation, especially through its AI-powered Isla Porter platform, position it for scalable, higher-margin expansion. Its ongoing geographic growth strengthens the outlook. Given FGI’s smaller scale and early stage in digital transformation, there is meaningful potential for multiple expansion as execution improves. On a relative basis, the stock looks attractively priced, offering notable upside if the strategy delivers. Image Source: Zacks Investment Research ConclusionIn the fast-paced home improvement market, both Home Depot and FGI Industries bring compelling strengths. However, Home Depot currently holds a clear advantage. Its strong stock performance, robust brand equity and disciplined execution highlight its dominance. Continued investments in digital tools, supply-chain modernization, and Pro customer services reinforce its position as a long-term leader. Moreover, stable earnings estimates suggest growing investor confidence in its performance outlook.FGI Industries, though significantly smaller, is gaining traction with its niche focus on kitchen and bath solutions and innovations like its AI-driven Isla Porter platform. The company’s agility, strategic partnerships and focus on remodel-driven demand signal long-term promise. Yet, with softer earnings expectations and limited scale, it remains in the growth phase of its journey.For now, Home Depot’s unmatched scale, operational strength and investor optimism position it ahead in the race, though FGI’s innovation-driven approach makes it one to watch. Both HD and FGI currently carry a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.Zacks' Research Chief Names "Stock Most Likely to Double"Our team of experts has just released the 5 stocks with the greatest probability of gaining +100% or more in the coming months. Of those 5, Director of Research Sheraz Mian highlights the one stock set to climb highest.This top pick is a little-known satellite-based communications firm. Space is projected to become a trillion dollar industry, and this company's customer base is growing fast. Analysts have forecasted a major revenue breakout in 2025. Of course, all our elite picks aren't winners but this one could far surpass earlier Zacks' Stocks Set to Double like Hims & Hers Health, which shot up +209%.Free: See Our Top Stock And 4 Runners UpWant 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 The Home Depot, Inc. (HD): Free Stock Analysis Report FGI Industries Ltd. (FGI): 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