NYSE:TOL is a prime example of a stock that offers more than what meets the eye in terms of fundamentals.

Last update: Oct 3, 2023

Our stock screener has singled out TOLL BROTHERS INC (NYSE:TOL) as a stellar value proposition. NYSE:TOL not only scores well in profitability, solvency, and liquidity but also maintains a very reasonable price point. We'll explore this further.

Analyzing Valuation Metrics

ChartMill assigns a Valuation Rating to each stock, ranging from 0 to 10. This rating is calculated by analyzing different valuation elements, such as price to earnings and free cash flow, both in absolute terms and relative to the market and industry. In the case of NYSE:TOL, the assigned 9 reflects its valuation:

TOL is valuated cheaply with a Price/Earnings ratio of 5.62.
Compared to the rest of the industry, the Price/Earnings ratio of TOL indicates a rather cheap valuation: TOL is cheaper than 86.36% of the companies listed in the same industry.
The average S&P500 Price/Earnings ratio is at 25.50. TOL is valued rather cheaply when compared to this.
With a Price/Forward Earnings ratio of 6.20, the valuation of TOL can be described as very cheap.
84.85% of the companies in the same industry are more expensive than TOL, based on the Price/Forward Earnings ratio.
TOL's Price/Forward Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 18.66.
80.30% of the companies in the same industry are more expensive than TOL, based on the Enterprise Value to EBITDA ratio.
78.79% of the companies in the same industry are more expensive than TOL, based on the Price/Free Cash Flow ratio.
TOL's low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
The excellent profitability rating of TOL may justify a higher PE ratio.

Profitability Insights: NYSE:TOL

Discover ChartMill's exclusive Profitability Rating, a proprietary metric that assesses stocks on a scale of 0 to 10. It takes into consideration various profitability ratios and margins, both in absolute terms and relative to industry peers. Notably, NYSE:TOL has achieved a 8:

Looking at the Return On Assets, with a value of 12.69%, TOL belongs to the top of the industry, outperforming 81.82% of the companies in the same industry.
With an excellent Return On Equity value of 23.41%, TOL belongs to the best of the industry, outperforming 84.85% of the companies in the same industry.
TOL has a better Return On Invested Capital (14.64%) than 81.82% of its industry peers.
The last Return On Invested Capital (14.64%) for TOL is above the 3 year average (8.48%), which is a sign of increasing profitability.
Looking at the Profit Margin, with a value of 14.66%, TOL belongs to the top of the industry, outperforming 89.39% of the companies in the same industry.
TOL's Profit Margin has improved in the last couple of years.
TOL has a Operating Margin of 17.37%. This is amongst the best in the industry. TOL outperforms 86.36% of its industry peers.
TOL's Operating Margin has improved in the last couple of years.
In the last couple of years the Gross Margin of TOL has grown nicely.

Understanding NYSE:TOL's Health

A critical element of ChartMill's stock evaluation is the Health Rating, which spans from 0 to 10. This rating considers multiple health factors, including liquidity and solvency, both in absolute terms and relative to industry peers. NYSE:TOL has received a 8 out of 10:

An Altman-Z score of 3.75 indicates that TOL is not in any danger for bankruptcy at the moment.
TOL's Altman-Z score of 3.75 is fine compared to the rest of the industry. TOL outperforms 68.18% of its industry peers.
The Debt to FCF ratio of TOL is 1.54, which is an excellent value as it means it would take TOL, only 1.54 years of fcf income to pay off all of its debts.
Looking at the Debt to FCF ratio, with a value of 1.54, TOL is in the better half of the industry, outperforming 69.70% of the companies in the same industry.
TOL has a Debt/Equity ratio of 0.42. This is a healthy value indicating a solid balance between debt and equity.
A Current Ratio of 3.85 indicates that TOL has no problem at all paying its short term obligations.
TOL has a Current ratio of 3.85. This is in the better half of the industry: TOL outperforms 66.67% of its industry peers.
The current and quick ratio evaluation for TOL is rather negative, while it does have excellent solvency and profitability. These ratios do not necessarly indicate liquidity issues and need to be evaluated against the specifics of the business.

A Closer Look at Growth for NYSE:TOL

ChartMill assigns a proprietary Growth Rating to each stock. The score is computed by evaluating various growth aspects, like EPS and revenue growth. We take into account the history as well as the estimated future numbers. NYSE:TOL was assigned a score of 5 for growth:

The Earnings Per Share has grown by an impressive 53.43% over the past year.
TOL shows a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 27.41% yearly.
The Revenue has grown by 11.27% in the past year. This is quite good.
The Revenue has been growing by 12.06% on average over the past years. This is quite good.

Every day, new Decent Value stocks can be found on ChartMill in our Decent Value screener.

Our latest full fundamental report of TOL contains the most current fundamental analsysis.

Keep in mind

This article should in no way be interpreted as advice in any way. The article is based on the observed metrics at the time of writing, but you should always make your own analysis and trade or invest at your own responsibility.