Toll Brothers, Inc. Fundamental Analysis (NYSE: TOL)
Toll Brothers, Inc. Fundamental Analysis (NYSE: TOL)
Toll Brothers, Inc. (NYSE: TOL) shows moderate financial fundamentals with a PE ratio of 11.72, profit margin of 11.14%, and ROE of 14.23%. The company generates $10.6B in annual revenue with weak year-over-year growth of 1.11%.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 53.6/100 based on profitability, valuation, growth, and balance sheet metrics. The C grade reflects average fundamentals, with notable risks in certain areas.
Fundamental Health Score
We analyze TOL's fundamental strength across five key dimensions:
Efficiency Score
WeakTOL struggles to generate sufficient returns from assets.
Valuation Score
ExcellentTOL trades at attractive valuation levels.
Growth Score
WeakTOL faces weak or negative growth trends.
Financial Health Score
ModerateTOL shows balanced financial health with some risks.
Profitability Score
WeakTOL struggles to sustain strong margins.
Key Financial Metrics
Is TOL Expensive or Cheap?
P/E Ratio
TOL trades at 11.72 times earnings. This suggests potential undervaluation.
PEG Ratio
When adjusting for growth, TOL's PEG of -1.36 indicates potential undervaluation.
Price to Book
The market values Toll Brothers, Inc. at 1.64 times its book value. This may indicate undervaluation.
EV/EBITDA
Enterprise value stands at 6.01 times EBITDA. This is generally considered low.
How Well Does TOL Make Money?
Net Profit Margin
For every $100 in sales, Toll Brothers, Inc. keeps $11.14 as profit after all expenses.
Operating Margin
Core operations generate 13.84 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $14.23 in profit for every $100 of shareholder equity.
ROA
Toll Brothers, Inc. generates $-1.13 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
Toll Brothers, Inc. produces operating cash flow of $1.29B, showing steady but balanced cash generation.
Free Cash Flow
Toll Brothers, Inc. generates strong free cash flow of $1.20B, providing ample flexibility for dividends, buybacks, or growth.
FCF Per Share
Each share generates $12.81 in free cash annually.
FCF Yield
TOL converts 8.82% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
11.72
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
-1.36
vs 25 benchmark
P/B Ratio
Price to book value ratio
1.64
vs 25 benchmark
P/S Ratio
Price to sales ratio
1.28
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
0.32
vs 25 benchmark
Current Ratio
Current assets to current liabilities
-0.36
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
0.14
vs 25 benchmark
ROA
Return on assets percentage
-1.13
vs 25 benchmark
ROCE
Return on capital employed
-0.37
vs 25 benchmark
How TOL Stacks Against Its Sector Peers
| Metric | TOL Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 11.72 | 26.29 | Better (Cheaper) |
| ROE | 14.23% | 966.00% | Weak |
| Net Margin | 11.14% | -4927.00% (disorted) | Strong |
| Debt/Equity | 0.32 | 0.60 | Strong (Low Leverage) |
| Current Ratio | -0.36 | 2.32 | Weak Liquidity |
| ROA | -113.28% | 295.00% | Weak |
TOL outperforms its industry in 3 out of 6 key metrics, particularly excelling in Net Margin, but lagging in ROE.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews Toll Brothers, Inc.'s 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
103.66%
Industry Style: Cyclical, Growth, Discretionary
High GrowthEPS CAGR
296.26%
Industry Style: Cyclical, Growth, Discretionary
High GrowthFCF CAGR
45.04%
Industry Style: Cyclical, Growth, Discretionary
High Growth