Toll Brothers (TOL) AI Stock Analysis

• Market Cap: $12.97B
• Dividend Yield: 0.7%
• Average Volume (3M): 1.28M
• Price to Earnings (P/E): 16.4
• Beta (1Y): 1.05
• Revenue Growth: 1.11%
• EPS Growth: -10.03%
• Country: US
• Employees: 4,900
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Residential Construction
• EPS (TTM): 2.19
• Shares Outstanding: 94,707,000
• 10 Day Avg. Volume: 1,278,038
• 30 Day Avg. Volume: 1,281,929
• PEG Ratio: -0.96
• Price to Book (P/B): 1.61
• Price to Sales (P/S): 1.22
• P/FCF Ratio: 13.02
• Enterprise Value/Market Cap: 1.13
• Enterprise Value/Revenue: 1.30
• Enterprise Value/Gross Profit: 5.13
• Enterprise Value/Ebitda: 7.72
• 1Y Price Target: $168.46
• Price Target Upside: 23.02% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 13
• EPS Forecast (FY): 12.81
• Revenue Forecast (FY): $10.61B

• Rating: 69 Neutral
• Price Target: $159.00 ▲(16.11% Upside)
• Action: Downgraded Date: 03/12/26
• Date: Action: Downgraded 03/12/26

The score is driven by strong financial performance (solid profitability, strong free cash flow, and improving leverage) and a constructive earnings outlook with reiterated guidance and buyback plans. This is tempered by weak near-term technical momentum and only moderate valuation support due to a low dividend yield.

Positive Factors

Strong Free Cash Flow

Consistent, high free cash flow (TTM ~$1.45B; ~94% conversion) provides durable financial flexibility: funds share repurchases, land acquisitions, and debt reduction while cushioning operations through cyclical housing downturns and supporting capital allocation without relying on volatile markets.

Improved Leverage & Liquidity

Markedly improved leverage (D/E ~0.32; net debt-to-cap ~14%) and ~ $3.4B liquidity (cash + revolver) lower refinancing and solvency risk. Extended credit facilities to 2031 enhance financing optionality, supporting disciplined growth through community expansion and cyclical volatility.

Deep Land Pipeline & Backlog

A large owned/controlled lot base (~75k lots, ~2.7 years of owned land) and growing community count underpin multi-year delivery visibility and pricing power. This removes immediate land supply constraints, enables measured expansion, and supports margin sustainability via controlled lot selection.

Negative Factors

High Spec Inventory Exposure

Roughly half of revenues from spec homes increases inventory, timing and pricing risk. Completed specs needing elevated incentives compress margins and create cyclical sensitivity: in weaker demand periods incentives and holding costs can erode profitability and cash generation.

Margin Pressure & Mix Risk

Management expects a sequential gross-margin decline driven by mix and regional shifts, and TTM margins have softened from prior peaks. Persistent mix volatility and regional variability can reduce long-term margin sustainability and compress returns on capital during normalization.

Regional & Operational Headwinds

Localized market underperformance, weather-related disruptions and community-level write-offs ($11.7M) highlight execution risk across regions. Such recurring operational setbacks can impair localized margin recovery, delay sales, and necessitate additional incentives or write-downs, pressuring profitability.

Toll Brothers Business Overview & Revenue Model

Company Description

Toll Brothers, Inc., together with its subsidiaries, designs, builds, markets, sells, and arranges finance for a range of detached and attached homes in luxury residential communities in the United States. The company operates in two segments, Traditional Home Building and City Living. It also designs, builds, markets, and sells condominiums through Toll Brothers City Living. In addition, the company develops, owns, and operates golf courses and country clubs; develops and sells land; and develops, operates, and rents apartments, as well as provides various interior fit-out options, such as flooring, wall tile, plumbing, cabinets, fixtures, appliances, lighting, and home-automation and security technologies. Further, it owns and operates architectural, engineering, mortgage, title, insurance, smart home technology, landscaping, lumber distribution, house component assembly, and manufacturing operations. The company serves move-up, empty-nester, active-adult, and second-home buyers. It has a strategic partnership with Equity Residential to develop new rental apartment communities in the United States markets. The company was founded in 1967 and is headquartered in Fort Washington, Pennsylvania.

How the Company Makes Money

Toll Brothers generates revenue primarily through the sale of residential properties. The company builds homes in various communities and markets, often selling directly to consumers. Its revenue model is largely driven by home sales, which includes both new constructions and the sale of homes in existing communities. Additionally, Toll Brothers earns income from the development and sale of land, as well as from its various subsidiaries that offer related services, such as mortgage financing and insurance. Strategic partnerships with land developers, suppliers, and local governments also contribute to its earnings, as these collaborations can enhance project feasibility and profitability. The company's ability to maintain strong demand in luxury housing markets and effectively manage construction and operational costs plays a critical role in its financial performance.

Toll Brothers Financial Statement Overview

Summary

Strong profitability and cash generation (TTM FCF ~$1.45B with ~94% FCF-to-net-income) support a healthy financial profile, and leverage has improved (debt-to-equity ~0.32; net debt-to-cap 14.2% noted). Offsetting this, margins and returns have cooled from FY2024 peaks, consistent with a more normalized cycle.

Income Statement

TTM (Trailing-Twelve-Months) revenue is modestly higher (about $11.25B) with healthy profitability (roughly 25% gross margin and ~12% net margin). Compared with FY2024, margins and earnings power have come down (net margin ~14% in FY2024 vs. ~12% TTM), suggesting peak-cycle profitability has cooled. Still, the company remains solidly profitable with strong operating margins for the industry, and recent revenue growth is positive versus the prior annual period.

Balance Sheet

Leverage looks moderate and improving: debt-to-equity is ~0.32 in TTM (Trailing-Twelve-Months) versus higher levels in earlier years (roughly 0.44–0.72), and equity has grown to about $8.4B. Returns remain attractive (TTM return on equity ~17%), though down from the ~20%+ levels seen in FY2022–FY2024. Overall balance sheet risk appears contained, but the business remains cyclical and still carries meaningful absolute debt (~$2.7B).

Cash Flow

Cash generation is a clear strength. TTM (Trailing-Twelve-Months) operating cash flow (~$1.54B) and free cash flow (~$1.45B) are strong, with a sharp improvement in free cash flow growth versus the prior year. Free cash flow is closely aligned with earnings (free cash flow is ~94% of net income), supporting earnings quality. A watch item is that cash flow does not fully cover accounting operating profit in TTM (Trailing-Twelve-Months), which can reflect working-capital swings typical in homebuilding, but overall cash conversion remains solid.

Breakdown	TTM	Oct 2025	Oct 2024	Oct 2023	Oct 2022	Oct 2021
Income Statement
Total Revenue	11.25B	10.97B	10.85B	9.99B	10.28B	8.79B
Gross Profit	2.85B	2.85B	3.02B	2.63B	2.49B	1.94B
EBITDA	1.89B	1.87B	2.12B	1.80B	1.59B	1.10B
Net Income	1.38B	1.35B	1.57B	1.37B	1.29B	833.63M
Balance Sheet
Total Assets	14.43B	14.52B	13.37B	12.53B	12.29B	11.54B
Cash, Cash Equivalents and Short-Term Investments	1.20B	1.26B	1.30B	1.30B	1.35B	1.64B
Total Debt	2.85B	2.92B	2.96B	2.98B	3.47B	3.80B
Total Liabilities	6.01B	6.23B	5.68B	5.71B	6.27B	6.20B
Stockholders Equity	8.41B	8.27B	7.67B	6.80B	6.01B	5.30B
Cash Flow
Free Cash Flow	1.45B	1.03B	936.52M	1.19B	915.09M	1.24B
Operating Cash Flow	1.54B	1.11B	1.01B	1.27B	986.82M	1.30B
Investing Cash Flow	-2.90M	-310.03M	-167.62M	-150.60M	-153.18M	-4.24M
Financing Cash Flow	-913.95M	-833.88M	-816.46M	-1.17B	-1.12B	-1.01B

Toll Brothers Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 136.94
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TOL, the sentiment is Negative. The current price of 136.94 is below the 20-day moving average (MA) of 150.17, below the 50-day MA of 149.46, and above the 200-day MA of 134.55, indicating a neutral trend. The MACD of -3.74 indicates Positive momentum. The RSI at 32.51 is Neutral, neither overbought nor oversold. The STOCH value of 21.82 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for TOL.

Toll Brothers Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
TMHC	77 Outperform	$5.60B	8.21	12.83%	―	6.98%	9.74%
PHM	76 Outperform	$22.50B	10.46	17.51%	0.78%	1.76%	-4.24%
NVR	75 Outperform	$18.11B	15.79	34.29%	―	3.61%	-6.94%
DHI	73 Outperform	$39.76B	17.70	13.81%	1.14%	-6.93%	-19.41%
TOL	69 Neutral	$12.97B	16.39	16.86%	0.70%	1.11%	-10.03%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
LEN	57 Neutral	$23.28B	30.47	8.04%	1.91%	-3.78%	-44.21%

Toll Brothers Corporate Events

Toll Brothers Shareholders Back Board, Auditor and Pay

Toll Brothers reported the results of its March 10, 2026 annual meeting, where shareholders voted on board elections, auditor ratification, and executive pay. All nine director nominees received strong majority support despite some variation in opposition levels, ensuring continuity in the company’s board leadership.

Shareholders also approved the re-appointment of the independent registered public accounting firm by a wide margin and backed the non-binding say-on-pay resolution for executive compensation. The outcomes signal broad investor support for Toll Brothers’ governance, financial oversight, and pay practices, reducing near-term uncertainty around corporate direction for stakeholders.

The most recent analyst rating on (TOL) stock is a Buy with a $185.00 price target. To see the full list of analyst forecasts on Toll Brothers stock, see the TOL Stock Forecast page.

Toll Brothers Extends Credit Facilities and Modifies Loan Terms

On February 5, 2026, Toll Brothers and its wholly owned subsidiary First Huntingdon Finance Corp. amended their $2.35 billion senior unsecured revolving credit agreement, slightly increasing total commitments to $2.375 billion, extending the facility’s maturity from February 7, 2030 to February 5, 2031, and revising the interest rate structure by eliminating the 10-basis-point SOFR credit spread adjustment. On the same date, they also amended a $650 million senior unsecured term loan agreement, extending the maturity of $548.4 million of outstanding loans to February 5, 2031 while leaving $101.6 million still due on February 7, 2030, and similarly removing the SOFR credit spread adjustment from substantially all outstanding loans, steps that collectively refine the company’s capital structure, lengthen debt maturities, and modestly adjust borrowing costs for the homebuilding group and its subsidiaries that guarantee these obligations.

The most recent analyst rating on (TOL) stock is a Buy with a $170.00 price target. To see the full list of analyst forecasts on Toll Brothers stock, see the TOL Stock Forecast page.

Toll Brothers Announces CEO Succession and Leadership Transition

On January 7, 2026, Toll Brothers announced a planned leadership transition effective March 30, 2026, under which long-time Chairman and Chief Executive Officer Douglas C. Yearley, Jr., who has led the company as CEO since 2010 and as Board Chair since 2018, will move into the role of Executive Chairman while continuing to guide strategic initiatives and oversee a smooth handover. Executive Vice President Karl K. Mistry, a 22-year company veteran who currently oversees homebuilding operations across 15 Eastern states and has held progressively senior roles since joining Toll Brothers in 2004, will succeed Yearley as Chief Executive Officer and join the Board, a move the company’s directors present as the culmination of a deliberate succession process that leverages its deep internal talent bench and is intended to sustain operational continuity, support the firm’s national expansion, and reinforce value creation for shareholders, employees, and homeowners.

The most recent analyst rating on (TOL) stock is a Buy with a $141.00 price target. To see the full list of analyst forecasts on Toll Brothers stock, see the TOL Stock Forecast page.