Toll Brothers Inc. (TOL)
NYSE:TOL
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Toll Brothers
(NYSE:TOL)
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Rating:69Neutral
Price Target:
$136.00
▼(-7.28% Downside)
Action:Downgraded
Date:05/20/26
The score is driven primarily by strong underlying financial performance (notably free-cash-flow strength and manageable leverage) and a constructive earnings update with raised full-year guidance and shareholder returns. These positives are tempered by weak technicals (price below major moving averages and negative MACD) and only moderate valuation support given a modest dividend yield.
Positive Factors
Cash generation & FCF conversion
Sustained high operating and free cash flow implies durable internal funding for land purchases, working capital and returns to shareholders. Strong cash conversion reduces refinancing risk in cycles and supports buybacks/dividends while enabling opportunistic M&A or land monetization without relying on markets.
Negative Factors
Demand softness & longer conversion cycles
Prolonged weaker demand and slower buyer conversions can depress throughput and extend working-capital needs, pressuring margins and cash flows. For a builder, multi-month conversion delays increase cycle risk and can erode returns if sustained across several quarters or regions.
Read all positive and negative factors
Positive Factors
Negative Factors
Cash generation & FCF conversion
Sustained high operating and free cash flow implies durable internal funding for land purchases, working capital and returns to shareholders. Strong cash conversion reduces refinancing risk in cycles and supports buybacks/dividends while enabling opportunistic M&A or land monetization without relying on markets.
Read all positive factors
Toll Brothers (TOL) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$12.72B
Dividend Yield0.7%
Average Volume (3M)1.04M
Price to Earnings (P/E)13.0
Beta (1Y)0.96
Revenue Growth3.62%
EPS Growth-2.11%
CountryUS
Employees4,900
SectorConsumer Cyclical
Sector Strength84
IndustryResidential Construction
Share Statistics
EPS (TTM)14.11
Shares Outstanding94,707,000
10 Day Avg. Volume1,265,015
30 Day Avg. Volume1,044,082
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 Cap1.12
Enterprise Value/Revenue1.27
Enterprise Value/Gross Profit5.01
Enterprise Value/Ebitda7.53
Forecast
1Y Price Target
$164.08Price Target Upside11.86% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering13
EPS Forecast (FY)12.81
Revenue Forecast (FY)$10.73B
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 primarily makes money by selling newly constructed homes and related real estate products. Its main revenue stream is home sales revenue recognized when a home is delivered/closed to the buyer; this includes the base home price and b...
Toll Brothers Earnings Call Summary
Earnings Call Date:May 19, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Aug 25, 2026
Earnings Call Sentiment Positive
The call presents a predominantly positive picture: the company beat guidance on revenue and earnings, raised full-year guidance on deliveries, prices and margins, demonstrated strong liquidity and balance sheet improvement, executed substantial share repurchases, reduced finished spec inventory and improved operating efficiencies. Negative items include a challenging demand backdrop with longer conversion times, regional softness in several markets, a material drop in joint venture/land sales income, $32.5M of write-offs, and near-term margin seasonality and potential input-cost inflation risks. On balance, the positive operational and financial results, guidance raise, strong liquidity and shareholder returns outweigh the listed challenges.Positive Updates
Beating Guidance on Top and Bottom Lines
Delivered 2,491 homes at an average price of $1,009,000 generating ~$2.5B of homebuilding revenue (~$110M above the midpoint of guidance); earned $260.6M ($2.72 per diluted share), a $0.18 beat vs. midpoint guidance.
Negative Updates
Challenging Demand Environment & Longer Conversions
Management reiterated that demand remains challenging and conversions are taking longer; per-community sales pace was flat and early-quarter deposits only modestly up year-over-year in the first three weeks of Q3.
Read all updates
Q2-2026 Updates
Positive
Negative
Beating Guidance on Top and Bottom Lines
Delivered 2,491 homes at an average price of $1,009,000 generating ~$2.5B of homebuilding revenue (~$110M above the midpoint of guidance); earned $260.6M ($2.72 per diluted share), a $0.18 beat vs. midpoint guidance.
Read all positive updates
Company Guidance
Guidance for fiscal 2026 calls for Q3 deliveries of about 2,600–2,700 homes with an average delivered price of $965,000–$985,000 and a Q3 adjusted gross margin of ~25.25% (implying Q4 ~26.3%), while full‑year deliveries were raised to 10,400–10,700 with an average delivered price of $985,000–$1,000,000 (midpoint +$12,500) and full‑year adjusted gross margin of 26.1% (up 10 bps); interest in cost of sales is expected at ~1.1% (Q3 and full year), Q3 SG&A ~10.0% and full‑year SG&A 10.1% (improved 15 bps), other income/JV/land sales ~$5M in Q3 and $120M for the year (already realized $81M), tax rate ~26.0% in Q3 and ~25.5% for the year, year‑end community count 480–490 (475 at Q3 end), weighted average shares ~95M (assumes $650M share repurchases for FY26), and a strong balance sheet with ~$3.3B liquidity ($1.1B cash, $2.2B revolver) and net debt‑to‑capital of 15.4% at quarter end.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
146.68
Price Trends
137.90
Negative
143.40
Negative
139.61
Negative
Market Momentum
-2.07
Negative
52.05
Neutral
85.16
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 146.68 is above the 20-day moving average (MA) of 135.45, above the 50-day MA of 137.90, and above the 200-day MA of 139.61, indicating a neutral trend. The MACD of -2.07 indicates Negative momentum. The RSI at 52.05 is Neutral, neither overbought nor oversold. The STOCH value of 85.16 is Negative, 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 |
|---|---|---|---|---|---|---|---|
72 Outperform | $40.76B | 15.24 | 13.24% | 1.14% | -5.57% | -19.40% | |
71 Outperform | $22.18B | 16.24 | 15.92% | 0.78% | -5.94% | -27.06% | |
69 Neutral | $12.72B | 12.97 | 15.49% | 0.70% | 3.62% | -2.11% | |
68 Neutral | $5.42B | 13.92 | 10.85% | ― | -8.99% | -22.26% | |
67 Neutral | $16.30B | 23.10 | 32.66% | ― | -7.05% | -16.31% | |
61 Neutral | $18.38B | 12.79 | -2.54% | 3.03% | 1.52% | -15.83% | |
56 Neutral | $21.82B | 30.47 | 8.04% | 1.91% | -7.52% | -49.33% |
* Consumer Cyclical Sector Average
TOL
Toll Brothers
137.85
30.75
28.71%
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Toll Brothers Corporate Events
Business Operations and StrategyExecutive/Board Changes
Toll Brothers Names Seth Ring President and COO
Positive
May 13, 2026
On May 13, 2026, Toll Brothers announced that Executive Vice President and 22-year company veteran Seth J. Ring will succeed Robert Parahus as President and Chief Operating Officer, effective June 30, 2026, and will join the board of directors. Pa...
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...
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.