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1. Company Snapshot

1.a. 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.

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1.b. Last Insights on TOL

Toll Brothers' recent performance was negatively impacted by decreased institutional investor holdings. Dynamic Technology Lab Private Ltd reduced its stake by 73.4%, selling 9,405 shares. Additionally, the company faces a challenging industry backdrop, with affordability issues and rising land and labor costs. Despite a recent dividend increase, builder stocks, including Toll Brothers, have experienced an 11.6% decline. Brokerages have given the stock a "Moderate Buy" rating, with one sell, six hold, and ten buy recommendations.

1.c. Company Highlights

2. Toll Brothers' Q1 FY2026 Earnings: A Strong Start to the Year

Toll Brothers delivered a robust first quarter, with 1,899 homes sold, generating $1.85 billion in homebuilding revenue. The company's adjusted gross margin and SG&A margin exceeded guidance by 25 and 30 basis points, respectively. Earnings per diluted share came in at $2.19, a 25% increase from the $1.75 earned in the same quarter last year, beating analyst estimates of $2.05. The strong EPS performance was driven by the company's ability to maintain a stable incentive rate of 8% while controlling costs.

Publication Date: Feb -19

📋 Highlights
  • Revenue & Profit Growth: Delivered $1.85B homebuilding revenue and $2.19 EPS, up 25% YoY.
  • Margin Expansion: Adjusted gross margin and SG&A margin exceeded guidance by 25 and 30 bps, respectively.
  • Stable Incentives & Pricing: Maintained 8% sales incentives, with 3% revenue growth from 2,303 net contracts ($2.4B).
  • Land Position: Controlled 75,000 lots (55% optioned) and 70% luxury-focused business, targeting mid-teens net debt/cap.
  • Guidance: Q2 deliveries: 2,400–2,500 homes ($975k–$985k avg price); FY2026: 10,300–10,700 homes ($970k–$990k avg).

Operational Highlights

The company signed 2,303 net contracts for $2.4 billion, flat in units but up 3% in dollars compared to the first quarter of fiscal 2025. Toll Brothers' land bank, comprising approximately 75,000 lots, with 55% optioned, is well-located in desirable areas, providing a solid foundation for future growth. As Karl Mistry noted, "We have a broadly diversified portfolio and affluent buyer profile, which positions us to capitalize on any further improvement in homebuyer demand."

Guidance and Outlook

Toll Brothers expects fiscal 2026 second-quarter deliveries of approximately 2,400 to 2,500 homes with an average delivered price between $975,000 and $985,000. For the full fiscal year 2026, the company maintains its projected deliveries of between 10,300 and 10,700 homes with an average price between $970,000 and $990,000. The guidance suggests a steady pace of deliveries and revenue growth, driven by the company's strong land bank and affluent customer base.

Valuation and Growth Prospects

With a P/E Ratio of 11.1 and an ROE of 16.86%, Toll Brothers appears to be reasonably valued. Analysts estimate revenue growth at 7.6% for the next year, indicating a positive outlook. The company's ability to maintain a stable incentive rate, control costs, and leverage its scale to minimize expenses should support its growth prospects. The dividend yield of 0.62% and Free Cash Flow Yield of 6.75% add to the attractiveness of the stock.

3. NewsRoom

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Toll Brothers Announces New Luxury Townhome Community Coming Soon to Charlotte, North Carolina

Apr -02

Source: globenewswire.com

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Toll Brothers Honored at the New Jersey Builders Association Awards

Apr -02

Source: globenewswire.com

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Toll Brothers Announces New Luxury Condominium Community Coming Soon to Scottsdale, Arizona

Apr -01

Source: globenewswire.com

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Toll Brothers Announces New Luxury Waterfront Community Coming Soon to Marion, Massachusetts

Apr -01

Source: globenewswire.com

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New Home Sites Released at Monterey at Lakewood Ranch by Toll Brothers

Apr -01

Source: globenewswire.com

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Toll Brothers Announces New Shallowford Pointe Community Coming Soon to Marietta, Georgia

Mar -31

Source: globenewswire.com

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Toll Brothers Inc. (NYSE:TOL) Receives Consensus Recommendation of “Moderate Buy” from Brokerages

Mar -31

Source: defenseworld.net

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Toll Brothers Announces Final Opportunity to Build a New Luxury Home at Weston Reserve in Apex, North Carolina

Mar -30

Source: globenewswire.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (7.99%)

6. Segments

Home Building

Expected Growth: 8%

Toll Brothers' 8% growth in Home Building is driven by increasing demand for luxury homes, strategic expansion into new markets, and a strong backlog of orders. Additionally, the company's focus on affordability, quality, and customer service has led to higher sales volumes and average selling prices. Furthermore, Toll Brothers' diversified product offerings and geographic presence have helped mitigate market risks, contributing to its robust growth.

Land Sales and Other

Expected Growth: 7%

Toll Brothers' 7% growth in Land Sales and Other is driven by increasing demand for land and higher prices, fueled by a strong housing market and limited supply. Additionally, the company's strategic land acquisition and development efforts, as well as its focus on high-margin land sales, contribute to this growth.

Corporate and Other

Expected Growth: 6%

Toll Brothers' Corporate and Other segment growth of 6% is driven by increased land sales, strategic investments, and cost savings initiatives. Additionally, the company's focus on luxury living and urban development, as well as its expansion into new markets, contribute to the segment's growth.

7. Detailed Products

Luxury Homes

Toll Brothers builds luxury homes in various communities across the United States, offering a range of floor plans, architectural styles, and customization options.

Active Adult Communities

Toll Brothers offers active adult communities designed for residents 55+, featuring low-maintenance living, resort-style amenities, and social activities.

City Living

Toll Brothers develops luxury condominiums and townhomes in urban centers, offering modern amenities and convenient access to city attractions.

Resort Communities

Toll Brothers creates resort-style communities with amenities like golf courses, clubhouses, and recreational facilities, often located near popular vacation destinations.

Master-Planned Communities

Toll Brothers develops large-scale, master-planned communities featuring a range of home styles, amenities, and community facilities.

8. Toll Brothers, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Toll Brothers, Inc. faces moderate threat from substitutes, as customers have limited alternatives for luxury homes. However, the company's focus on quality and customer service helps to mitigate this threat.

Bargaining Power Of Customers

Toll Brothers, Inc. has a diverse customer base, which reduces the bargaining power of individual customers. Additionally, the company's luxury homes are often customized, making it difficult for customers to negotiate prices.

Bargaining Power Of Suppliers

Toll Brothers, Inc. relies on various suppliers for materials and labor. While the company has some bargaining power due to its size, suppliers can still exert some pressure, particularly in times of high demand.

Threat Of New Entrants

Entering the luxury homebuilding market requires significant capital and expertise, which creates a barrier to entry for new competitors. Toll Brothers, Inc. has established a strong brand and has a large market share, making it difficult for new entrants to gain traction.

Intensity Of Rivalry

The luxury homebuilding market is highly competitive, with several established players competing for market share. Toll Brothers, Inc. faces intense rivalry from companies like KB Home, Lennar Corporation, and Taylor Morrison, which can lead to pricing pressure and increased marketing expenses.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 30.51%
Debt Cost 3.95%
Equity Weight 69.49%
Equity Cost 12.20%
WACC 9.68%
Leverage 43.91%

11. Quality Control: Toll Brothers, Inc. passed 7 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
M/I Homes

A-Score: 5.4/10

Value: 8.0

Growth: 8.2

Quality: 7.0

Yield: 0.0

Momentum: 3.5

Volatility: 6.0

1-Year Total Return ->

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Stock-Card
Toll Brothers

A-Score: 5.4/10

Value: 6.9

Growth: 7.3

Quality: 6.6

Yield: 2.0

Momentum: 3.5

Volatility: 6.3

1-Year Total Return ->

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Stock-Card
Meritage Homes

A-Score: 5.4/10

Value: 8.6

Growth: 5.3

Quality: 6.5

Yield: 4.0

Momentum: 2.5

Volatility: 5.7

1-Year Total Return ->

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Stock-Card
Taylor Morrison

A-Score: 5.1/10

Value: 8.0

Growth: 5.7

Quality: 6.4

Yield: 0.0

Momentum: 3.5

Volatility: 7.0

1-Year Total Return ->

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Stock-Card
Century Communities

A-Score: 5.1/10

Value: 8.0

Growth: 7.6

Quality: 4.7

Yield: 3.0

Momentum: 2.0

Volatility: 5.3

1-Year Total Return ->

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Stock-Card
KB Home

A-Score: 4.9/10

Value: 7.8

Growth: 4.6

Quality: 5.3

Yield: 3.0

Momentum: 2.5

Volatility: 6.0

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

135.83$

Current Price

135.83$

Potential

-0.00%

Expected Cash-Flows