Toll Brothers (TOL) AI Stock Analysis

• Market Cap: $13.48B
• Dividend Yield: 0.7%
• Average Volume (3M): 971.49K
• Price to Earnings (P/E): 10.3
• Beta (1Y): 1.09
• Revenue Growth: 3.26%
• EPS Growth: -6.40%
• Country: US
• Employees: 4,900
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Residential Construction
• EPS (TTM): 3.73
• Shares Outstanding: 96,383,000
• 10 Day Avg. Volume: 970,194
• 30 Day Avg. Volume: 971,487
• PEG Ratio: 0.45
• Price to Book (P/B): 1.98
• Price to Sales (P/S): 1.40
• P/FCF Ratio: 16.21
• Enterprise Value/Market Cap: 1.03
• Enterprise Value/Revenue: 1.28
• Enterprise Value/Gross Profit: 4.94
• Enterprise Value/Ebitda: 7.45
• 1Y Price Target: $148.67
• Price Target Upside: 6.28% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 7
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 78 Outperform
• Price Target: $152.00 ▲(8.66% Upside)

Toll Brothers demonstrates strong financial performance and attractive valuation, which are the most significant factors contributing to its score. The company's strategic positioning and growth prospects are reinforced by a positive earnings call. However, technical indicators suggest some short-term bearish momentum, which slightly tempers the overall score.

Positive Factors

Revenue Growth

Record revenue growth indicates strong demand for luxury homes and effective pricing strategies, reinforcing the company's market position.

Strong Balance Sheet

A strong balance sheet with low leverage and high liquidity enhances financial stability and supports strategic investments.

Community Count Growth

Expanding community count reflects strategic growth and increased market penetration, supporting long-term revenue potential.

Negative Factors

Decline in Sales Volumes

Declining sales volumes suggest potential challenges in demand, which could pressure future revenue and profitability.

Increased Incentives

Rising incentives indicate competitive pressures and may erode margins, impacting long-term profitability.

Spec Home Margin Pressure

Margin pressure on spec homes suggests potential profitability challenges, affecting overall financial performance.

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, 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 exhibits solid financial health with consistent revenue growth and strong profitability metrics. The company has effectively managed its debt levels, improving its financial leverage. While cash flow generation is strong, there is room for improvement in converting operating income to cash flow.

Income Statement

Toll Brothers has demonstrated strong revenue growth over the years, with a TTM revenue growth rate of 2.04%. The company maintains healthy margins, with a gross profit margin of 25.84% and a net profit margin of 12.64% in the TTM period. However, there is a slight decline in margins compared to the previous year, indicating some pressure on profitability.

Balance Sheet

The company has improved its financial stability, with a decreasing debt-to-equity ratio of 0.36 in the TTM period, down from 0.39 the previous year. Return on equity remains strong at 17.46%, reflecting efficient use of equity. However, the equity ratio is moderate, suggesting a balanced approach to leveraging assets.

Cash Flow

Toll Brothers shows a robust free cash flow growth rate of 26.96% in the TTM period, indicating strong cash generation capabilities. The operating cash flow to net income ratio is 0.35, which is lower than previous periods, suggesting a need for improvement in converting income to cash flow. The free cash flow to net income ratio remains high at 0.92, highlighting effective cash management.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	10.88B	10.85B	9.99B	10.28B	8.79B	7.08B
Gross Profit	2.81B	3.02B	2.63B	2.49B	1.94B	1.42B
EBITDA	1.87B	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	14.40B	13.37B	12.53B	12.29B	11.54B	11.07B
Cash, Cash Equivalents and Short-Term Investments	852.31M	1.30B	1.30B	1.35B	1.64B	1.37B
Total Debt	3.07B	2.96B	2.98B	3.47B	3.80B	4.21B
Total Liabilities	6.29B	5.68B	5.71B	6.27B	6.20B	6.14B
Stockholders Equity	8.10B	7.67B	6.80B	6.01B	5.30B	4.88B
Cash Flow
Free Cash Flow	918.34M	936.52M	1.19B	915.09M	1.24B	898.55M
Operating Cash Flow	994.89M	1.01B	1.27B	986.82M	1.30B	1.01B
Investing Cash Flow	-291.75M	-167.62M	-150.60M	-153.18M	-4.24M	-177.84M
Financing Cash Flow	-728.12M	-816.46M	-1.17B	-1.12B	-1.01B	-753.31M

Toll Brothers Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 139.88
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

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 139.88 is above the 20-day moving average (MA) of 133.05, above the 50-day MA of 134.60, and above the 200-day MA of 119.49, indicating a bullish trend. The MACD of 0.77 indicates Negative momentum. The RSI at 62.26 is Neutral, neither overbought nor oversold. The STOCH value of 93.15 is Negative, 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	78 Outperform	$13.48B	10.28	17.73%	0.70%	3.26%	-6.40%
PHM	70 Outperform	$24.79B	9.80	21.57%	0.77%	1.76%	-4.24%
TMHC	70 Neutral	$6.13B	7.55	14.31%	―	6.98%	9.74%
DHI	66 Neutral	$46.44B	13.74	14.48%	1.05%	-6.93%	-19.41%
LEN	64 Neutral	$33.24B	12.97	10.63%	1.52%	-4.69%	-32.95%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
NVR	61 Neutral	$21.32B	16.48	34.80%	―	3.61%	-6.94%

Toll Brothers Corporate Events

Kennedy Wilson to Acquire Toll Brothers’ Apartment Platform

On September 18, 2025, Kennedy Wilson, a global real estate investment company, announced its agreement to acquire Toll Brothers‘ Apartment Living platform for $347 million. This acquisition includes interests in a portfolio of apartment and student housing properties, which will significantly enhance Kennedy Wilson’s investment management platform by adding over $5 billion in assets under management. The transaction, expected to close in October 2025, will allow Toll Brothers to focus on its core homebuilding business while creating a new long-term relationship between the two companies for future investment opportunities in rental and for-sale housing.

The most recent analyst rating on (TOL) stock is a Buy with a $155.00 price target. To see the full list of analyst forecasts on Toll Brothers stock, see the TOL Stock Forecast page.

Toll Brothers Inc. Reports Strong Earnings Amid Challenges

Toll Brothers Inc. recently held its earnings call, revealing a strong financial performance and strategic positioning despite facing market challenges. The company achieved record revenues and maintained a healthy backlog with a low cancellation rate. However, concerns were raised about declining sales volumes and increased incentives impacting margins. Overall, Toll Brothers appears well-positioned for future growth, supported by strong community count expansion and a solid financial foundation.

Toll Brothers Reports Strong Q3 2025 Earnings

Toll Brothers, Inc., a leading builder of luxury homes in the United States, operates in the homebuilding sector, offering a range of services including architectural, engineering, and mortgage solutions. The company is known for its focus on luxury and high-end residential properties across various states.