Toll Brothers (TOL) AI Stock Analysis

• Market Cap: $12.98B
• Dividend Yield: 0.73%
• Average Volume (3M): 1.61M
• Price to Earnings (P/E): 9.7
• Beta (1Y): 1.24
• Revenue Growth: 3.26%
• EPS Growth: -6.40%
• Country: US
• Employees: 4,900
• Sector: Consumer Cyclical
• Sector Strength: 70
• Industry: Residential Construction
• EPS (TTM): 3.73
• Shares Outstanding: 98,181,000
• 10 Day Avg. Volume: 1,559,993
• 30 Day Avg. Volume: 1,611,821
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 1.07
• Enterprise Value/Revenue: 1.30
• Enterprise Value/Gross Profit: 4.97
• Enterprise Value/Ebitda: 7.44
• 1Y Price Target: $147.27
• Price Target Upside: 11.92% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 15

• Rating: 79 Outperform
• Price Target: $151.00 ▲(14.76% Upside)

Toll Brothers' strong financial performance and strategic positioning are the most significant factors contributing to its score. The company's robust profitability, efficient cost management, and solid balance sheet underpin its financial health. Technical indicators show positive momentum, though caution is advised due to potential overbought conditions. Valuation metrics suggest the stock may be undervalued, offering potential upside. The recent earnings call and corporate events further support the company's growth prospects and financial stability.

Positive Factors

Financial Performance

Toll Brothers reported higher than expected revenues, earnings before taxes, and earnings per share in the third quarter.

Gross Margins

Toll Brothers' gross margin percentage in the third quarter exceeded expectations, driven by efficiency across products and regions.

Shareholder Value

Toll Brothers repurchased 1.8 million shares for $201 million, which can be seen as a positive for shareholders.

Negative Factors

Guidance

Guidance for fiscal year 2025 was provided at the low end of the prior range, indicating potential caution.

Order Performance

Net orders of homes missed expectations, and cancellation rates increased.

Uncertainty in Deliveries

There is uncertainty around fiscal year 2026 deliveries, as precise guidance was not provided, creating a black box situation.

Toll Brothers Business Overview & Revenue Model

Company Description

Toll Brothers, Inc. is a leading American luxury homebuilder headquartered in Horsham, Pennsylvania. Founded in 1967, the company primarily operates in the residential construction sector, focusing on the design, construction, and sale of high-end homes. Toll Brothers offers a diverse range of products, including single-family homes, townhomes, and condominiums, across various markets in the United States. The company also provides related services such as land development and home financing through its subsidiaries, enhancing its position in the luxury real estate market.

How the Company Makes Money

Toll Brothers generates revenue primarily through the sale of residential properties, which includes luxury single-family homes, townhomes, and condominiums. The company's revenue model relies on the construction and sale of homes in various communities, often targeting affluent buyers looking for customizations and high-quality finishes. Key revenue streams include the direct sale of completed homes, as well as revenue from home sales made through pre-construction contracts. Additionally, Toll Brothers earns income from its subsidiaries, which offer mortgage financing and title insurance services to homebuyers, further diversifying its revenue sources. The company has also established strategic partnerships with various suppliers and subcontractors, ensuring a steady flow of quality materials and labor, which contributes to its operational efficiency and profitability.

Toll Brothers Financial Statement Overview

Summary

Toll Brothers demonstrates strong profitability with high gross and net profit margins, efficient cost management, and robust operational efficiency. The balance sheet shows financial stability with manageable leverage, though a slight increase in debt levels requires monitoring. Cash flow management is strong, with effective conversion from profits despite some variability in growth rates.

Income Statement

Toll Brothers demonstrates strong profitability with a consistently high gross profit margin and net profit margin. The TTM gross profit margin is 25.8%, and the net profit margin is 12.9%, indicating efficient cost management. Revenue growth has been steady, though slightly fluctuating, with a recent TTM decrease of 1.7% compared to the previous year. Despite this, the company maintains robust EBIT and EBITDA margins at 16.7% and 17.2% respectively, reflecting good operational efficiency.

Balance Sheet

The balance sheet reflects a solid equity base with an equity ratio of 56.0% in the TTM period, suggesting financial stability. The debt-to-equity ratio is 0.37, indicating manageable leverage. ROE is strong at 17.4%, highlighting effective use of equity to generate profits. However, a slight increase in debt levels compared to the prior year could pose a potential risk if not managed carefully.

Cash Flow

Toll Brothers exhibits strong cash flow management with a TTM free cash flow of $723 million. Although free cash flow decreased compared to the previous period, the free cash flow to net income ratio remains healthy at 0.52, indicating a good conversion of profits into cash. The operating cash flow to net income ratio is 0.58, showing consistent cash generation ability, albeit with some fluctuations in growth rates.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	10.66B	10.85B	9.99B	10.28B	8.79B	7.08B
Gross Profit	2.79B	3.02B	2.63B	2.49B	1.94B	1.42B
EBITDA	1.86B	2.12B	1.80B	1.59B	1.10B	676.51M
Net Income	1.38B	1.57B	1.37B	1.29B	833.63M	446.62M
Balance Sheet
Total Assets	14.20B	13.37B	12.53B	12.29B	11.54B	11.07B
Cash, Cash Equivalents and Short-Term Investments	686.47M	1.30B	1.30B	1.35B	1.64B	1.37B
Total Debt	2.93B	2.96B	2.98B	3.47B	3.80B	4.21B
Total Liabilities	6.23B	5.68B	5.71B	6.27B	6.20B	6.14B
Stockholders Equity	7.95B	7.67B	6.80B	6.01B	5.30B	4.88B
Cash Flow
Free Cash Flow	723.34M	936.52M	1.19B	915.09M	1.24B	898.55M
Operating Cash Flow	800.19M	1.01B	1.27B	986.82M	1.30B	1.01B
Investing Cash Flow	-254.69M	-167.62M	-150.60M	-153.18M	-4.24M	-177.84M
Financing Cash Flow	-871.28M	-816.46M	-1.17B	-1.12B	-1.01B	-753.31M

Toll Brothers Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 131.58
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TOL, the sentiment is Positive. The current price of 131.58 is above the 20-day moving average (MA) of 126.62, above the 50-day MA of 119.85, and above the 200-day MA of 120.63, indicating a bullish trend. The MACD of 3.55 indicates Negative momentum. The RSI at 63.35 is Neutral, neither overbought nor oversold. The STOCH value of 68.64 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TOL.

Toll Brothers Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
TOL	79 Outperform	$12.98B	9.71	17.73%	0.73%	3.26%	-6.40%
DHI	78 Outperform	$50.12B	13.47	16.27%	0.98%	-7.31%	-16.37%
TMHC	76 Outperform	$6.80B	7.70	15.59%	―	13.77%	28.57%
LEN	74 Outperform	$34.59B	11.10	13.04%	1.52%	-1.26%	-17.78%
PHM	73 Outperform	$25.72B	9.75	23.05%	0.68%	5.04%	2.07%
NVR	69 Neutral	$23.67B	16.95	38.10%	―	5.87%	-1.74%
Sector *	60 Neutral	C$4.76B	7.23	23.69%	3.62%	3.22%	5.88%

Toll Brothers Corporate Events

Toll Brothers Announces New CFO Appointment

On July 10, 2025, Toll Brothers announced that Gregg Ziegler will succeed Marty Connor as Chief Financial Officer at the end of the fiscal year on October 31, 2025. Marty Connor will continue as a senior advisor for a year to ensure a smooth transition and provide strategic advice. Ziegler, with extensive experience in finance and investor relations, is expected to maintain the company’s financial success and stakeholder value.

Toll Brothers Announces Redemption of Senior Notes

On June 13, 2025, Toll Brothers Finance Corp., a subsidiary of Toll Brothers, Inc., announced its plan to redeem all $350 million of its outstanding 4.875% Senior Notes due 2025. The redemption, scheduled for July 15, 2025, will be executed at a price of either 100% of the principal amount or the present value of the remaining payments, whichever is greater, impacting the company’s financial strategy and potentially influencing its market positioning.

Toll Brothers Completes $500M Senior Notes Offering

On June 10, 2025, Toll Brothers Finance Corp., a subsidiary of Toll Brothers, Inc., completed a public offering of $500 million in 5.600% Senior Notes due 2035. This move, underwritten by several financial institutions, aims to support general corporate purposes, including refinancing existing debt. The Senior Notes are unsecured and unsubordinated, with interest payable semi-annually, and are subject to certain covenants and redemption conditions. This financial maneuver is expected to bolster the company’s liquidity and financial flexibility, potentially impacting its market positioning and stakeholder interests.