In a market where value is scarce, NYSE:TOL offers a refreshing opportunity with its solid fundamentals.

Last update: Apr 12, 2024

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.

Evaluating Valuation: NYSE:TOL

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 8 reflects its valuation:

Based on the Price/Earnings ratio of 9.30, the valuation of TOL can be described as reasonable.
TOL's Price/Earnings ratio is rather cheap when compared to the industry. TOL is cheaper than 80.60% of the companies in the same industry.
The average S&P500 Price/Earnings ratio is at 25.85. TOL is valued rather cheaply when compared to this.
TOL is valuated reasonably with a Price/Forward Earnings ratio of 8.71.
Based on the Price/Forward Earnings ratio, TOL is valued cheaply inside the industry as 85.07% of the companies are valued more expensively.
Compared to an average S&P500 Price/Forward Earnings ratio of 22.18, TOL is valued rather cheaply.
70.15% of the companies in the same industry are more expensive than TOL, based on the Enterprise Value to EBITDA ratio.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of TOL indicates a somewhat cheap valuation: TOL is cheaper than 68.66% of the companies listed in the same industry.
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.

Assessing Profitability for NYSE:TOL

ChartMill utilizes a Profitability Rating to assess stocks, scoring them on a scale of 0 to 10. This rating takes into account a variety of profitability ratios and margins, both in absolute terms and in comparison to industry peers. NYSE:TOL has earned a 9 out of 10:

Looking at the Return On Assets, with a value of 11.34%, TOL belongs to the top of the industry, outperforming 83.58% of the companies in the same industry.
Looking at the Return On Equity, with a value of 20.23%, TOL belongs to the top of the industry, outperforming 82.09% of the companies in the same industry.
TOL has a better Return On Invested Capital (13.82%) than 88.06% of its industry peers.
The last Return On Invested Capital (13.82%) for TOL is above the 3 year average (11.30%), which is a sign of increasing profitability.
TOL has a better Profit Margin (13.97%) than 89.55% of its industry peers.
TOL's Profit Margin has improved in the last couple of years.
TOL has a Operating Margin of 17.79%. This is amongst the best in the industry. TOL outperforms 91.04% of its industry peers.
In the last couple of years the Operating Margin of TOL has grown nicely.
In the last couple of years the Gross Margin of TOL has grown nicely.

How do we evaluate the Health for NYSE:TOL?

ChartMill utilizes a Health Rating to assess stocks, scoring them on a scale of 0 to 10. This rating takes into account a variety of liquidity and solvency ratios, both in absolute terms and in comparison to industry peers. NYSE:TOL has earned a 6 out of 10:

An Altman-Z score of 4.20 indicates that TOL is not in any danger for bankruptcy at the moment.
TOL has a Altman-Z score of 4.20. This is in the better half of the industry: TOL outperforms 71.64% of its industry peers.
TOL has a debt to FCF ratio of 2.18. This is a good value and a sign of high solvency as TOL would need 2.18 years to pay back of all of its debts.
Looking at the Debt to FCF ratio, with a value of 2.18, TOL is in the better half of the industry, outperforming 62.69% of the companies in the same industry.
TOL has a Debt/Equity ratio of 0.39. This is a healthy value indicating a solid balance between debt and equity.
TOL has a Current Ratio of 3.97. This indicates that TOL is financially healthy and has no problem in meeting its short term obligations.
TOL's Current ratio of 3.97 is fine compared to the rest of the industry. TOL outperforms 71.64% of its industry peers.

A Closer Look at Growth for NYSE:TOL

ChartMill employs its own Growth Rating system for all stocks. This score, ranging from 0 to 10, is derived by evaluating different growth factors, such as EPS and revenue growth, taking into account both past performance and future projections. NYSE:TOL has earned a 4 for growth:

The Earnings Per Share has grown by an impressive 22.08% over the past year.
Measured over the past years, TOL shows a very strong growth in Earnings Per Share. The EPS has been growing by 21.45% on average per year.

Our Decent Value screener lists more Decent Value stocks and is updated daily.

For an up to date full fundamental analysis you can check the fundamental report of TOL

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.