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Toro Company (TTC)
:TTC
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The Toro Company
(NYSE:TTC)
Rating:71Outperform
Price Target:
$81.00
▲(8.01%Upside)
Positive Factors
Product Demand
Autonomy and labor-saving products expected to thrive, with most courses going autonomous with mowers if labor is not available.
Technology
TTC appears well positioned for upcoming battery/autonomous technology shifts.
Valuation
Valuation nearing a 5-year low, suggesting value players might find it attractive at current levels.
Negative Factors
Backlog
Backlog conversion/possible air pocket still remains a concern.
Inventory
Extra inventory and challenging consumer leading to expectations for flat year.
The Toro Company (TTC) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$7.49B
Dividend Yield2%
Average Volume (3M)1.06M
Price to Earnings (P/E)19.5
Beta (1Y)1.17
Revenue Growth2.98%
EPS Growth54.13%
CountryUS
Employees11,108
SectorIndustrials
Sector Strength92
IndustryManufacturing - Tools & Accessories
Share Statistics
EPS (TTM)1.42
Shares Outstanding98,685,270
10 Day Avg. Volume684,596
30 Day Avg. Volume1,057,285
Financial Highlights & Ratios
PEG Ratio76.95
Price to Book (P/B)9.58
Price to Sales (P/S)0.00
P/FCF Ratio33.68
Enterprise Value/Market Cap1.17
Enterprise Value/Revenue0.48
Enterprise Value/Gross Profit5.76
Enterprise Value/Ebitda3.22
Forecast
1Y Price Target
$80.60Price Target Upside7.48% Upside
Rating ConsensusHold
Number of Analyst Covering5
The Toro Company Business Overview & Revenue Model
Company DescriptionThe Toro Company engages in the designing, manufacturing, marketing, and selling professional and residential equipment worldwide. The company's Professional segment offers turf and landscape equipment products, including sports fields and grounds mowing and maintenance equipment, golf course mowing and maintenance equipment, landscape contractor mowing equipment, landscape creation and renovation equipment, and other maintenance equipment; rental, specialty, and underground construction equipment; and snow and ice management equipment, such as snowplows, brush, snow thrower attachment, salt and sand spreaders, and related parts and accessories for light and medium duty trucks, utility task vehicles, skid steers, and front-end loaders. It also provides irrigation and lighting products that consist of sprinkler heads, electric and hydraulic valves, controllers, computer irrigation central control systems, coupling systems, and ag-irrigation drip tape and hose products, as well as professionally installed landscape lighting products offered through distributors and landscape contractors. This segment sells its products primarily through a network of distributors and dealers to professional users engaged in maintaining golf courses, sports fields, municipal properties, agricultural fields, residential and commercial landscapes, and removing snow and ice, as well as directly to government customers, rental companies, and retailers. Its Residential segment provides walk power mowers, zero-turn riding mowers, snow throwers, replacement parts, and home solution products that include grass and hedge trimmers, leaf blowers, blower-vacuums, chainsaws, string trimmers, hoses, and hose-end retail irrigation products. This segment sells its products to homeowners through a network of distributors and dealers; and home centers, hardware retailers, and mass retailers, as well as online. The Toro Company was founded in 1914 and is headquartered in Bloomington, Minnesota.
How the Company Makes MoneyThe Toro Company generates revenue primarily through the sale of its wide range of products, which include turf and landscape equipment, snow and ice management products, and irrigation systems. Key revenue streams are derived from both the professional segment, which serves commercial clients such as golf courses, sports fields, and municipalities, and the residential segment, which targets homeowners with products like lawnmowers and snow blowers. The company also benefits from a robust aftermarket parts and accessories business, which provides ongoing revenue from existing customers. Strategic partnerships and acquisitions further enhance Toro's market position and revenue, as they expand the company's product offerings and access to new markets. Additionally, Toro's focus on innovation and sustainability helps drive sales by meeting evolving customer demands for efficiency and environmentally friendly solutions.
The Toro Company Earnings Call Summary
Earnings Call Date:Jun 05, 2025
(Q2-2025)
| % Change Since: -0.23%|
Next Earnings Date:Sep 04, 2025
Earnings Call Sentiment Neutral
The earnings call presented a mix of achievements and challenges. The company exceeded EPS expectations and maintained strong performance in its Professional segment, while the Residential segment faced revenue declines and higher costs. Tariff headwinds are an ongoing concern, but mitigation strategies are in place. Overall, the company's efforts to navigate the dynamic environment and focus on operational excellence are evident, though challenges remain.Q2-2025 Updates
Positive Updates
EPS Exceeds Expectations
Adjusted earnings per share grew to $1.42, exceeding expectations despite a challenging macroeconomic environment and unfavorable weather conditions.
Professional Segment Growth
Professional segment net sales for the second quarter were just over $1 billion, up about 1% year over year, driven by higher shipments of golf and grounds products.
AMP Program Success
The AMP program generated $70 million in run-rate savings, with a goal of achieving $100 million by 2027.
Strong Cash Flow and Shareholder Returns
Free cash flow through the second quarter was $84.7 million, and the company deployed $200 million towards share repurchases year-to-date.
ACE Hardware Vendor of the Year Award
The Toro Company was awarded the 2024 ACE Hardware Vendor of the Year for substantial sales growth and innovative products.
Negative Updates
Decline in Revenue
Total revenue declined 2.3% year over year to $1.3 billion, affected by weak consumer confidence and late spring in many regions.
Residential Segment Challenges
Residential segment net sales were $297 million, down 11% year over year, primarily due to lower shipments and higher costs.
Tariff Headwinds
Tariffs are expected to impact approximately 3% of annual cost of goods sold, with mitigation efforts underway but still posing a challenge.
Inventory Valuation Adjustments
Residential segment margins were negatively impacted by inventory valuation adjustments due to lower-than-expected battery adoption rates.
Company Guidance
During The Toro Company's Second Quarter 2025 Earnings Conference Call, the company shared several key metrics and guidance for the remainder of the fiscal year. The second quarter saw adjusted earnings per share grow to $1.42, surpassing expectations, despite a 2.3% year-over-year decline in revenue to $1.3 billion. This decline was attributed to weak consumer confidence and a late spring, affecting top-line growth in some segments. However, the Professional segment experienced a 1% increase in net sales, driven by golf and grounds products, while Residential segment sales fell by 11%, impacted by lower shipments of certain mowers and power products. Looking ahead, Toro anticipates flat to slightly up net sales for the third quarter, with Professional segment sales growing mid-single digits and Residential segment sales declining in the high teens. Full-year revenue is expected to be flat to down 3%, with adjusted diluted EPS revised to $4.15-$4.30, reflecting slight year-over-year growth amidst macroeconomic headwinds. The company continues to focus on operational excellence and strategic initiatives to mitigate tariff impacts and drive long-term value.The Toro Company Financial Statement Overview
Summary
The Toro Company demonstrates stable financial performance with a strong equity position and efficient cash generation. However, slight declines in revenue growth and free cash flow suggest areas for improvement in sales strategies and capital management.Income Statement
The Toro Company's income statement shows a stable financial performance with a consistent revenue base. The TTM gross profit margin is 33.5%, indicating efficient production and pricing strategies. However, the net profit margin has slightly decreased to 8.8% due to increased expenses. The revenue growth rate over the past year is slightly negative, suggesting a need for strategic initiatives to boost sales. The EBIT and EBITDA margins are solid at 11.2% and 14.9%, respectively, reflecting operational efficiency.72
Positive
Balance Sheet
The balance sheet reflects a strong equity position with a debt-to-equity ratio of 0.82, indicating a balanced approach to leverage. The equity ratio is 39.0%, providing a solid buffer against liabilities and risk. Return on equity is at 27.0%, showcasing the company's ability to generate returns from its equity base. Overall, the balance sheet demonstrates stability with manageable debt levels.78
Positive
Cash Flow
The cash flow analysis shows a robust operating cash flow to net income ratio of 1.40, highlighting effective conversion of earnings into cash. However, the free cash flow has decreased slightly, with a growth rate of -2.5% over the previous year. The free cash flow to net income ratio stands at 1.14, indicating a healthy cash generation capacity, but there is room for improvement in managing capital expenditures.68
Positive
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 4.55B | 4.58B | 4.55B | 4.51B | 3.96B | 3.38B |
| Gross Profit | 1.52B | 1.55B | 1.58B | 1.50B | 1.34B | 1.19B |
| EBITDA | 679.00M | 702.90M | 578.40M | 697.09M | 627.79M | 535.84M |
| Net Income | 398.80M | 418.90M | 329.70M | 443.30M | 409.90M | 329.70M |
Balance Sheet | ||||||
| Total Assets | 3.79B | 3.58B | 3.64B | 3.56B | 2.94B | 2.85B |
| Cash, Cash Equivalents and Short-Term Investments | 176.50M | 199.50M | 193.10M | 188.25M | 405.61M | 479.89M |
| Total Debt | 1.21B | 1.04B | 1.16B | 1.07B | 761.28M | 873.21M |
| Total Liabilities | 2.31B | 2.03B | 2.13B | 2.20B | 1.79B | 1.74B |
| Stockholders Equity | 1.48B | 1.55B | 1.51B | 1.35B | 1.15B | 1.11B |
Cash Flow | ||||||
| Free Cash Flow | 454.70M | 466.40M | 157.30M | 153.69M | 451.46M | 461.31M |
| Operating Cash Flow | 557.90M | 569.90M | 306.80M | 297.17M | 555.47M | 539.37M |
| Investing Cash Flow | -64.60M | -59.70M | -157.70M | -548.25M | -128.45M | -216.08M |
| Financing Cash Flow | -506.60M | -505.10M | -147.50M | 42.24M | -503.65M | 2.35M |
The Toro Company Technical Analysis
Positive
74.99
Price Trends
72.55
Positive
72.38
Positive
77.31
Negative
Market Momentum
0.94
Negative
59.19
Neutral
81.14
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TTC, the sentiment is Positive. The current price of 74.99 is above the 20-day moving average (MA) of 71.65, above the 50-day MA of 72.55, and below the 200-day MA of 77.31, indicating a neutral trend. The MACD of 0.94 indicates Negative momentum. The RSI at 59.19 is Neutral, neither overbought nor oversold. The STOCH value of 81.14 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TTC.
The Toro Company Risk Analysis
The Toro Company disclosed 35 risk factors in its most recent earnings report. The Toro Company 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
The Toro Company Peers Comparison
Overall Rating
UnderperformOutperform
Sector (65)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
77 Outperform | $11.96B | 49.33 | 8.51% | ― | 4.87% | 19.66% | |
76 Outperform | $12.48B | 27.58 | 34.83% | 1.34% | -2.29% | -14.49% | |
74 Outperform | $5.43B | 16.96 | 11.85% | 1.78% | -3.69% | -11.76% | |
72 Outperform | $16.77B | 16.78 | 19.15% | 2.67% | -0.88% | 0.04% | |
72 Outperform | $11.28B | 31.37 | 4.03% | 4.44% | -3.04% | ― | |
71 Outperform | $7.49B | 19.45 | 25.50% | 2.00% | 2.98% | 54.13% | |
65 Neutral | $10.89B | 15.56 | 5.22% | 1.87% | 3.09% | -26.84% |
* Industrials Sector Average
Performance Comparison
TTC
The Toro Company
74.99
-15.43
-17.06%
LECO
Lincoln Electric Holdings
222.78
28.82
14.86%
RBC
RBC Bearings
378.24
85.58
29.24%
SNA
Snap-on
317.57
54.76
20.84%
SWK
Stanley Black & Decker
72.87
-12.08
-14.22%
TKR
Timken Company
78.07
-3.84
-4.69%
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.