Toll Brothers (TOL)
NYSE:TOL
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Toll Brothers
(NYSE:TOL)
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Rating:69Neutral
Price Target:
$159.00
▲(13.47% Upside)
Action:DowngradedDate: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.
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.
Read all positive and negative factors
Positive Factors
Negative 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.
Read all positive factors
Toll Brothers (TOL) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$13.27B
Dividend Yield0.7%
Average Volume (3M)1.27M
Price to Earnings (P/E)16.4
Beta (1Y)1.03
Revenue Growth1.11%
EPS Growth-10.03%
CountryUS
Employees4,900
SectorConsumer Cyclical
Sector Strength84
IndustryResidential Construction
Share Statistics
EPS (TTM)2.19
Shares Outstanding94,707,000
10 Day Avg. Volume1,069,806
30 Day Avg. Volume1,272,183
Financial Highlights & Ratios
PEG Ratio-0.96
Price to Book (P/B)1.61
Price to Sales (P/S)1.22
P/FCF Ratio13.02
Enterprise Value/Market Cap1.13
Enterprise Value/Revenue1.34
Enterprise Value/Gross Profit5.28
Enterprise Value/Ebitda7.94
Forecast
1Y Price Target
$169.09Price Target Upside20.68% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering12
EPS Forecast (FY)12.78
Revenue Forecast (FY)$10.63B
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, Tra...
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 includ...
Toll Brothers Earnings Call Summary
Earnings Call Date:Feb 17, 2026
(Q1-2026)
| % Change Since: |
Next Earnings Date:May 26, 2026
Earnings Call Sentiment Positive
The call presented a predominantly positive operational and financial picture: Toll Brothers beat guidance across multiple metrics (revenue, EPS, gross margin and SG&A margin), strengthened liquidity and reduced leverage, realized significant one-time JV/land sale proceeds, and reiterated controlled growth targets for communities and deliveries. Offsetting factors include a forecasted sequential margin dip in Q2 driven by mix, modest write-offs, regional softness in some markets, and remaining demand and cost uncertainties (spec exposure, lumber and immigration-related buyer hesitancy). On balance, the positive beats, strong balance sheet and healthy buyer profile outweigh the highlighted headwinds.Positive Updates
Exceeded Revenue and EPS Guidance
Delivered 1,899 homes and generated $1.85 billion of homebuilding revenue (~$24 million above the midpoint of guidance). GAAP diluted EPS of $2.19, a 25% increase vs. prior-year Q1 ($1.75) and $0.05 above implied guidance.
Negative Updates
Sequential Margin Headwind in Q2
Company projects a 100-basis-point sequential decline in adjusted gross margin from Q1 (26.5%) to Q2 (25.5%), attributed primarily to mix (less Pacific region exposure) despite full-year gross margin guidance of 26.0% being maintained.
Read all updates
Q1-2026 Updates
Positive
Negative
Exceeded Revenue and EPS Guidance
Delivered 1,899 homes and generated $1.85 billion of homebuilding revenue (~$24 million above the midpoint of guidance). GAAP diluted EPS of $2.19, a 25% increase vs. prior-year Q1 ($1.75) and $0.05 above implied guidance.
Read all positive updates
Company Guidance
Management reiterated fiscal‑2026 guidance: Q2 deliveries of ~2,400–2,500 homes with an average delivered price of $975k–$985k and a Q2 adjusted gross margin of 25.5% (full‑year adjusted gross margin maintained at 26.0%); full‑year deliveries 10,300–10,700 homes at an average price of $970k–$990k. They forecast interest & cost of sales of ~1.1% (Q2 and FY), Q2 SG&A ≈10.7% of home sales (FY 10.25%), other income/land JV gross profit breakeven in Q2 and $130M for the year (already realized $72M), a Q2 tax rate ≈26% (FY ≈25.5%), weighted average shares ~96M (Q2) / ~95M (FY) and a targeted $650M of share repurchases (mostly later in the year); community count is expected to grow 8%–10% to 480–490 communities (445 at Q1 end; selling from ~455 at Q2 end), liquidity was about $3.4B (≈$1.2B cash + $2.2B revolver) with Q1 net debt‑to‑capital of 14.2% and a longer‑term net debt‑to‑cap target in the mid‑teens.Toll Brothers Financial Statement Overview
Summary
Income Statement
78
Positive
Balance Sheet
74
Positive
Cash Flow
84
Very Positive
| 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
Positive
140.12
Price Trends
146.60
Negative
142.54
Negative
136.55
Positive
Market Momentum
-2.16
Negative
50.69
Neutral
77.65
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 140.12 is above the 20-day moving average (MA) of 136.34, below the 50-day MA of 146.60, and above the 200-day MA of 136.55, indicating a neutral trend. The MACD of -2.16 indicates Negative momentum. The RSI at 50.69 is Neutral, neither overbought nor oversold. The STOCH value of 77.65 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TOL.
Toll Brothers Risk Analysis
Toll Brothers disclosed 29 risk factors in its most recent earnings report. Toll Brothers reported the most risks in the "Production" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Toll Brothers Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
77 Outperform | $5.72B | 8.21 | 12.83% | ― | 6.98% | 9.74% | |
76 Outperform | $23.05B | 10.46 | 17.51% | 0.78% | 1.76% | -4.24% | |
75 Outperform | $18.75B | 15.79 | 34.29% | ― | 3.61% | -6.94% | |
72 Outperform | $41.32B | 17.70 | 13.81% | 1.14% | -6.93% | -19.41% | |
69 Neutral | $13.27B | 16.39 | 16.86% | 0.70% | 1.11% | -10.03% | |
61 Neutral | $18.38B | 12.79 | -2.54% | 3.03% | 1.52% | -15.83% | |
56 Neutral | $21.84B | 30.47 | 8.04% | 1.91% | -3.78% | -44.21% |
* Consumer Cyclical Sector Average
TOL
Toll Brothers
140.12
46.63
49.88%
DHI
DR Horton
142.64
23.03
19.26%
LEN
Lennar
88.97
-15.24
-14.62%
NVR
NVR
6,750.04
-490.94
-6.78%
PHM
PulteGroup
120.33
25.65
27.09%
TMHC
Taylor Morrison
59.41
3.44
6.15%
Toll Brothers Corporate Events
Executive/Board ChangesShareholder Meetings
Toll Brothers Shareholders Back Board, Auditor and Pay
Positive
Mar 12, 2026
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 op...
Business Operations and StrategyPrivate Placements and Financing
Toll Brothers Extends Credit Facilities and Modifies Loan Terms
Positive
Feb 5, 2026
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 facil...
Business Operations and StrategyExecutive/Board Changes
Toll Brothers Announces CEO Succession and Leadership Transition
Positive
Jan 7, 2026
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 ...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.