The Toro Company (TTC) AI Stock Analysis

• Market Cap: $6.65B
• Dividend Yield: 2.26%
• Average Volume (3M): 942.29K
• Price to Earnings (P/E): 17.3
• Beta (1Y): 1.17
• Revenue Growth: 2.98%
• EPS Growth: 54.13%
• Country: US
• Employees: 11,108
• Sector: Industrials
• Sector Strength: 87
• Industry: Manufacturing - Tools & Accessories
• EPS (TTM): 1.42
• Shares Outstanding: 98,685,270
• 10 Day Avg. Volume: 1,325,416
• 30 Day Avg. Volume: 942,289
• PEG Ratio: 76.95
• Price to Book (P/B): 9.58
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 33.68
• Enterprise Value/Market Cap: 1.32
• Enterprise Value/Revenue: 0.48
• Enterprise Value/Gross Profit: 5.76
• Enterprise Value/Ebitda: 3.22
• 1Y Price Target: $82.75
• Price Target Upside: 22.87% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 4

• Rating: 64 Neutral
• Price Target: $72.00 ▲(6.90%Upside)

The Toro Company's overall stock score reflects a combination of solid financial performance and fair valuation, overshadowed by weak technical indicators and challenges highlighted in the earnings call. While operational efficiency and strategic initiatives are positives, macroeconomic headwinds and segment-specific issues weigh on the outlook.

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 Business Overview & Revenue Model

Company Description

The 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 Money

The 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 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.

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.

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.

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
	EBIT
509.70M	533.30M	430.70M	575.66M	518.28M	426.36M
	EBITDA
679.00M	702.90M	578.40M	697.09M	627.79M	535.84M
	Net Income Common Stockholders
398.80M	418.90M	329.70M	443.30M	409.90M	329.70M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
176.50M	199.50M	193.10M	188.25M	405.61M	479.89M
	Total Assets
3.79B	3.58B	3.64B	3.56B	2.94B	2.85B
	Total Debt
1.21B	1.04B	1.16B	1.07B	761.28M	873.21M
	Net Debt
1.04B	841.70M	970.00M	881.87M	355.67M	393.32M
	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

• Technical Analysis Sentiment: Negative
• Last Price: 67.35
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TTC, the sentiment is Negative. The current price of 67.35 is below the 20-day moving average (MA) of 73.89, below the 50-day MA of 71.05, and below the 200-day MA of 78.88, indicating a bearish trend. The MACD of -0.84 indicates Positive momentum. The RSI at 36.29 is Neutral, neither overbought nor oversold. The STOCH value of 15.93 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for TTC.

The Toro Company Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
LECO	77 Outperform	$11.24B	24.84	34.83%	1.49%	-2.29%	-14.49%
RBC	77 Outperform	$11.66B	48.24	8.51%	―	4.87%	19.66%
SNA	74 Outperform	$16.21B	16.22	19.15%	2.76%	-0.88%	0.04%
TKR	72 Outperform	$4.94B	15.25	11.85%	1.98%	-3.69%	-11.76%
SWK	66 Neutral	$10.10B	27.72	4.03%	5.03%	-3.04%	―
Sector *	66 Neutral	$4.47B	12.22	5.40%	3.65%	4.14%	-12.00%
TTC	64 Neutral	$6.65B	17.25	25.50%	2.26%	2.98%	54.13%