Toll Brothers (TOL) AI Stock Analysis

• Market Cap: $14.16B
• Dividend Yield: 0.65%
• Average Volume (3M): 1.70M
• Price to Earnings (P/E): 10.5
• Beta (1Y): 1.20
• Revenue Growth: 3.26%
• EPS Growth: -6.40%
• Country: US
• Employees: 4,900
• Sector: Consumer Cyclical
• Sector Strength: 75
• Industry: Residential Construction
• EPS (TTM): 3.73
• Shares Outstanding: 96,383,000
• 10 Day Avg. Volume: 1,791,522
• 30 Day Avg. Volume: 1,697,216
• 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: 0.98
• Enterprise Value/Revenue: 1.28
• Enterprise Value/Gross Profit: 4.94
• Enterprise Value/Ebitda: 7.45
• 1Y Price Target: $148.77
• Price Target Upside: 1.24% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 13

• Rating: 78 Outperform
• Price Target: $158.00 ▲(7.52% Upside)

Toll Brothers receives a strong overall score driven by solid financial performance and strategic positioning in the residential construction industry. The company's attractive valuation and positive earnings call further bolster its outlook. However, technical indicators suggest caution due to overbought conditions, and there are concerns about declining sales volumes.

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: 146.95
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• 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 146.95 is above the 20-day moving average (MA) of 138.70, above the 50-day MA of 128.60, and above the 200-day MA of 119.96, indicating a bullish trend. The MACD of 5.38 indicates Negative momentum. The RSI at 69.77 is Neutral, neither overbought nor oversold. The STOCH value of 66.24 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	78 Outperform	$14.16B	10.52	17.73%	0.65%	3.26%	-6.40%
DHI	78 Outperform	$52.51B	14.12	16.27%	0.88%	-7.31%	-16.37%
PHM	78 Outperform	$26.72B	10.12	23.05%	0.64%	5.04%	2.07%
TMHC	76 Outperform	$6.89B	8.05	15.59%	―	13.77%	28.57%
LEN	74 Outperform	$36.11B	11.29	13.04%	1.42%	-1.26%	-17.78%
NVR	69 Neutral	$24.49B	18.01	38.10%	―	5.87%	-1.74%
Sector *	61 Neutral	$18.09B	12.97	-1.60%	2.98%	1.42%	-15.92%

Toll Brothers Corporate Events

Toll Brothers Announces New CFO Appointment

On July 10, 2025, Toll Brothers announced that Gregg Ziegler will succeed Marty Connor as Chief Financial Officer at the end of the fiscal year on October 31, 2025. Marty Connor will continue as a senior advisor for a year to ensure a smooth transition and provide strategic advice. Ziegler, with extensive experience in finance and investor relations, is expected to maintain the company’s financial success and stakeholder value.

Toll Brothers Announces Redemption of Senior Notes

On June 13, 2025, Toll Brothers Finance Corp., a subsidiary of Toll Brothers, Inc., announced its plan to redeem all $350 million of its outstanding 4.875% Senior Notes due 2025. The redemption, scheduled for July 15, 2025, will be executed at a price of either 100% of the principal amount or the present value of the remaining payments, whichever is greater, impacting the company’s financial strategy and potentially influencing its market positioning.

Toll Brothers Completes $500M Senior Notes Offering

On June 10, 2025, Toll Brothers Finance Corp., a subsidiary of Toll Brothers, Inc., completed a public offering of $500 million in 5.600% Senior Notes due 2035. This move, underwritten by several financial institutions, aims to support general corporate purposes, including refinancing existing debt. The Senior Notes are unsecured and unsubordinated, with interest payable semi-annually, and are subject to certain covenants and redemption conditions. This financial maneuver is expected to bolster the company’s liquidity and financial flexibility, potentially impacting its market positioning and stakeholder interests.