Toll Brothers (TOL) AI Stock Analysis

• Market Cap: $12.88B
• Dividend Yield: 0.7%
• Average Volume (3M): 1.15M
• Price to Earnings (P/E): 10.8
• Beta (1Y): 1.06
• Revenue Growth: 1.11%
• EPS Growth: -10.03%
• Country: US
• Employees: 4,900
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Residential Construction
• EPS (TTM): 4.58
• Shares Outstanding: 95,003,000
• 10 Day Avg. Volume: 727,011
• 30 Day Avg. Volume: 1,145,453
• 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: 1.14
• Enterprise Value/Revenue: 1.34
• Enterprise Value/Gross Profit: 5.22
• Enterprise Value/Ebitda: 7.99
• 1Y Price Target: $150.00
• Price Target Upside: 10.65% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 13
• EPS Forecast (FY): 12.8
• Revenue Forecast (FY): $10.44B

• Rating: 75 Outperform
• Price Target: $153.00 ▲(12.87% Upside)

The score is driven primarily by strong financial performance (growth, profitability, and cash generation) and supportive valuation (low P/E). The outlook is tempered by mixed near-term technical momentum and some operational/guidance-related caution from the latest earnings call, while the CEO transition is viewed as a modest net positive with limited incremental risk.

Positive Factors

Strong revenue and healthy margins

Record home sales and sustained gross margins reflect durable demand in the luxury segment and pricing power. Higher ASPs and margin durability support long-term profitability and reinvestment capacity, underpinning structural earnings resilience across housing cycles.

Robust cash generation and returns

Strong operating cash flow and meaningful shareholder returns indicate high cash conversion and disciplined capital allocation. Reliable free cash generation supports debt servicing, buybacks, dividends, and funding for community expansion, enhancing long-term financial flexibility.

Orderly internal CEO succession

Planned, internal succession leverages 22-year company tenure and preserves institutional knowledge. An orderly handover reduces execution risk, supports continuity of strategy and operations, and helps maintain relationships with land partners and local markets over the coming years.

Negative Factors

Slight margin deterioration in 2025

A decline in margins, even modest, can signal rising input or overhead pressures in a cyclical construction business. If persistent, it could compress long-term profitability and reduce cash flow available for reinvestment or shareholder returns, requiring margin management focus.

Softening demand metrics

Declines in net agreements and flat Q4 deliveries point to emerging demand headwinds that can persist through housing cycles. Sustained weakness in contracts reduces forward revenue visibility, risks higher inventory, and pressures absorption timelines and margins over months.

High speculative inventory exposure

A large share of speculative homes increases exposure to market absorption and pricing volatility. In a downturn or slower sales environment, elevated spec inventory can tie up capital, raise carrying costs, and amplify margin compression over the medium term.

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

Toll Brothers exhibits strong financial performance with consistent revenue growth, solid profitability, and effective cash flow management. The company has improved its leverage position and maintains a healthy return on equity. Minor fluctuations in margins and cash flow growth are noted, but the overall trajectory remains positive.

Income Statement

Toll Brothers has demonstrated strong revenue growth over the years, with a notable increase in total revenue from 2020 to 2025. The company maintains healthy profit margins, with a gross profit margin consistently above 20% and a net profit margin improving to over 12% in 2025. The EBIT and EBITDA margins also show robust performance, indicating effective cost management and operational efficiency. However, there was a slight decline in margins in 2025 compared to 2024, which could be a point of concern if the trend continues.

Balance Sheet

The balance sheet reflects a solid financial position with a decreasing debt-to-equity ratio, indicating improved leverage management. The return on equity remains strong, showcasing efficient use of equity to generate profits. The equity ratio is stable, suggesting a balanced approach to financing assets. However, the company should continue to monitor its debt levels to ensure they remain manageable, especially in a potentially volatile construction market.

Cash Flow

Toll Brothers has shown positive cash flow trends, with free cash flow growth rebounding in 2025 after a decline in 2024. The operating cash flow to net income ratio is healthy, indicating strong cash generation relative to net income. The free cash flow to net income ratio is consistently high, reflecting the company's ability to convert earnings into cash effectively. Continued focus on cash flow management will be crucial to support future growth and investment opportunities.

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

Toll Brothers Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 135.56
• 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 135.56 is below the 20-day moving average (MA) of 137.99, below the 50-day MA of 135.87, and above the 200-day MA of 123.21, indicating a neutral trend. The MACD of -0.33 indicates Positive momentum. The RSI at 45.53 is Neutral, neither overbought nor oversold. The STOCH value of 37.23 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
TOL	75 Outperform	$12.88B	10.77	16.89%	0.70%	1.11%	-10.03%
TMHC	71 Outperform	$6.39B	7.31	14.31%	―	6.98%	9.74%
NVR	70 Outperform	$20.97B	16.21	34.80%	―	3.61%	-6.94%
PHM	70 Outperform	$25.77B	10.18	21.57%	0.78%	1.76%	-4.24%
DHI	66 Neutral	$42.61B	13.60	14.48%	1.14%	-6.93%	-19.41%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
LEN	59 Neutral	$27.67B	14.94	8.28%	1.91%	-3.78%	-44.21%

Toll Brothers Corporate Events

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.