Toll Brothers (TOL) AI Stock Analysis

• Market Cap: $15.12B
• Dividend Yield: 0.7%
• Average Volume (3M): 1.21M
• Price to Earnings (P/E): 11.4
• Beta (1Y): 1.03
• Revenue Growth: 1.11%
• EPS Growth: -10.03%
• Country: US
• Employees: 4,900
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Residential Construction
• EPS (TTM): 2.19
• Shares Outstanding: 94,749,886
• 10 Day Avg. Volume: 1,260,550
• 30 Day Avg. Volume: 1,209,679
• 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: 1.09
• Enterprise Value/Revenue: 1.50
• Enterprise Value/Gross Profit: 5.84
• Enterprise Value/Ebitda: 8.94
• 1Y Price Target: $166.67
• Price Target Upside: 5.06% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 13
• EPS Forecast (FY): 12.8
• Revenue Forecast (FY): $10.59B

• Rating: 79 Outperform
• Price Target: $188.00 ▲(18.50% Upside)
• Action: Reiterated Date: 02/18/26
• Date: Action: Reiterated 02/18/26

The score is driven primarily by strong fundamentals (profitability, cash conversion, and improving leverage) and a constructive earnings update with reiterated guidance and strong liquidity. Technicals support the uptrend but overbought indicators raise near-term risk, while valuation is reasonable on earnings but supported by a low dividend yield.

Positive Factors

Strong margins and profitability

Sustained gross margins above 20% and improving net margins indicate durable pricing power in the luxury segment and operational efficiency. This margin profile supports predictable cash generation, resilience to input cost shocks, and the ability to fund land acquisition, options and shareholder returns over the medium term.

Solid balance sheet & liquidity

Large liquidity reserves, materially lower net leverage and extended maturities materially reduce refinancing and funding risk for multi-year developments. This financial flexibility enables controlled community growth, opportunistic land buys, and planned buybacks while cushioning cyclical downturns in housing demand.

Resilient buyer profile and low cancellations

Low cancellations and a high share of all‑cash or modest LTV buyers reduce sales volatility and default risk across cycles. A financially strong buyer mix supports stable conversion of backlog into revenues and preserves margins, making revenue and cash flow more predictable over the next several quarters.

Negative Factors

Q2 sequential margin headwind

A guided one-percentage-point gross margin dip driven by geographic and product mix highlights vulnerability to region-specific shifts and product sequencing. If mix-driven margin pressure persists, it could erode the structural margin advantage and reduce free cash flow available for land investment or share repurchases.

High spec inventory exposure

Roughly half of revenues from spec homes increases sensitivity to sales pacing and incentive spending. Completed inventory holding costs and elevated incentives compress margins if absorption slows, making earnings and cash conversion more cyclical and dependent on steady demand for finished homes.

Local market softness and write-offs

Community-specific write-offs and underperformance in multiple regions show execution and localized demand risk. Concentrated market weakness can force price or incentive actions, impair lot profitability and increase the risk that localized issues spread to other markets, pressuring margins and returns on invested capital.

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

Strong profitability and revenue growth with healthy margins and improving leverage. Cash generation is solid with free cash flow rebounding in 2025, though the slight margin decline in 2025 vs. 2024 warrants monitoring.

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	Oct 2025	Oct 2024	Oct 2023	Oct 2022	Oct 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: Positive
• Last Price: 158.65
• 50DMA: Positive
• 100DMA: Positive
• 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 Positive. The current price of 158.65 is above the 20-day moving average (MA) of 156.07, above the 50-day MA of 147.16, and above the 200-day MA of 131.68, indicating a bullish trend. The MACD of 3.86 indicates Positive momentum. The RSI at 57.57 is Neutral, neither overbought nor oversold. The STOCH value of 30.87 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	$15.12B	11.40	17.03%	0.70%	1.11%	-10.03%
TMHC	77 Outperform	$6.44B	8.42	12.87%	―	6.98%	9.74%
PHM	76 Outperform	$27.07B	12.67	17.67%	0.78%	1.76%	-4.24%
NVR	75 Outperform	$20.97B	16.66	33.18%	―	3.61%	-6.94%
DHI	73 Outperform	$47.50B	14.89	13.63%	1.14%	-6.93%	-19.41%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
LEN	60 Neutral	$28.50B	14.58	8.26%	1.91%	-3.78%	-44.21%

Toll Brothers Corporate Events

Toll Brothers Extends Credit Facilities and Modifies Loan Terms

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 facility’s maturity from February 7, 2030 to February 5, 2031, and revising the interest rate structure by eliminating the 10-basis-point SOFR credit spread adjustment. On the same date, they also amended a $650 million senior unsecured term loan agreement, extending the maturity of $548.4 million of outstanding loans to February 5, 2031 while leaving $101.6 million still due on February 7, 2030, and similarly removing the SOFR credit spread adjustment from substantially all outstanding loans, steps that collectively refine the company’s capital structure, lengthen debt maturities, and modestly adjust borrowing costs for the homebuilding group and its subsidiaries that guarantee these obligations.

The most recent analyst rating on (TOL) stock is a Buy with a $170.00 price target. To see the full list of analyst forecasts on Toll Brothers stock, see the TOL Stock Forecast page.

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.