NYSE:TOL stands out as a stock that provides good value for the fundamentals it showcases.

Last update: May 17, 2024

Our stock screening tool has pinpointed TOLL BROTHERS INC (NYSE:TOL) as an undervalued stock. NYSE:TOL maintains a solid financial footing. Furthermore, it remains attractively priced. Let's delve into the specifics below.

Evaluating Valuation: NYSE:TOL

ChartMill employs its own Valuation Rating system for all stocks. This score, ranging from 0 to 10, is determined by evaluating different valuation factors, including price to earnings and free cash flow, both in absolute terms and relative to the market and industry. NYSE:TOL has earned a 7 for valuation:

Based on the Price/Earnings ratio of 10.13, the valuation of TOL can be described as reasonable.
TOL's Price/Earnings ratio is a bit cheaper when compared to the industry. TOL is cheaper than 72.73% of the companies in the same industry.
The average S&P500 Price/Earnings ratio is at 28.83. TOL is valued rather cheaply when compared to this.
With a Price/Forward Earnings ratio of 9.45, the valuation of TOL can be described as very reasonable.
TOL's Price/Forward Earnings ratio is a bit cheaper when compared to the industry. TOL is cheaper than 78.79% of the companies in the same industry.
TOL is valuated cheaply when we compare the Price/Forward Earnings ratio to 20.47, which is the current average of the S&P500 Index.
Based on the Enterprise Value to EBITDA ratio, TOL is valued a bit cheaper than the industry average as 65.15% of the companies are valued more expensively.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of TOL indicates a somewhat cheap valuation: TOL is cheaper than 65.15% 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.
TOL has an outstanding profitability rating, which may justify a higher PE ratio.

Assessing Profitability for NYSE:TOL

ChartMill's Profitability Rating offers a unique perspective on stock analysis, providing scores from 0 to 10. These ratings consider a wide range of profitability metrics and margins, both in comparison to industry peers and on their own merits. For NYSE:TOL, the assigned 9 is a significant indicator of profitability:

With an excellent Return On Assets value of 11.34%, TOL belongs to the best of the industry, outperforming 81.82% of the companies in the same industry.
TOL has a Return On Equity of 20.23%. This is amongst the best in the industry. TOL outperforms 83.33% of its industry peers.
TOL's Return On Invested Capital of 13.82% is amongst the best of the industry. TOL outperforms 84.85% of its industry peers.
The 3 year average ROIC (11.30%) for TOL is below the current ROIC(13.82%), indicating increased profibility in the last year.
TOL has a better Profit Margin (13.97%) than 89.39% of its industry peers.
TOL's Profit Margin has improved in the last couple of years.
Looking at the Operating Margin, with a value of 17.79%, TOL belongs to the top of the industry, outperforming 90.91% of the companies in the same industry.
TOL's Operating Margin has improved in the last couple of years.
TOL's Gross Margin has improved in the last couple of years.

Health Analysis for NYSE:TOL

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 6 out of 10:

An Altman-Z score of 4.32 indicates that TOL is not in any danger for bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 4.32, TOL is in the better half of the industry, outperforming 68.18% of the companies in the same industry.
The Debt to FCF ratio of TOL is 2.18, which is a good value as it means it would take TOL, 2.18 years of fcf income to pay off 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 68.18% 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.
A Current Ratio of 3.97 indicates that TOL has no problem at all paying its short term obligations.
Looking at the Current ratio, with a value of 3.97, TOL is in the better half of the industry, outperforming 68.18% of the companies in the same industry.

Unpacking NYSE:TOL's Growth Rating

Every stock receives a Growth Rating from ChartMill, ranging from 0 to 10. This rating assesses various growth aspects, including historical and projected EPS and revenue growth. NYSE:TOL boasts a 5 out of 10:

TOL shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 22.08%, which is quite impressive.
TOL shows a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 21.45% yearly.
Based on estimates for the next years, TOL will show a quite strong growth in Earnings Per Share. The EPS will grow by 8.38% on average per year.

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

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

Disclaimer

This is not investing advice! The article highlights some of the observations at the time of writing, but you should always make your own analysis and invest based on your own insights.