For those who appreciate value investing, NYSE:TOL is a compelling option with its solid fundamentals.

Last update: Aug 15, 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.

Valuation Insights: NYSE:TOL

An integral part of ChartMill's stock analysis is the Valuation Rating, which spans from 0 to 10. This rating evaluates diverse valuation factors, including price to earnings and cash flows, while considering the stock's profitability and growth. NYSE:TOL has received a 8 out of 10:

With a Price/Earnings ratio of 9.41, the valuation of TOL can be described as very reasonable.
Compared to the rest of the industry, the Price/Earnings ratio of TOL indicates a somewhat cheap valuation: TOL is cheaper than 72.31% of the companies listed in the same industry.
When comparing the Price/Earnings ratio of TOL to the average of the S&P500 Index (29.02), we can say TOL is valued rather cheaply.
The Price/Forward Earnings ratio is 8.89, which indicates a very decent valuation of TOL.
Based on the Price/Forward Earnings ratio, TOL is valued a bit cheaper than the industry average as 73.85% of the companies are valued more expensively.
When comparing the Price/Forward Earnings ratio of TOL to the average of the S&P500 Index (20.56), we can say TOL is valued rather cheaply.
Based on the Enterprise Value to EBITDA ratio, TOL is valued cheaply inside the industry as 81.54% 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 78.46% 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.

Looking at the Profitability

ChartMill employs its own Profitability Rating system for stock evaluation. This score, ranging from 0 to 10, is derived from an analysis of diverse profitability metrics and margins. In the case of NYSE:TOL, the assigned 9 is noteworthy for profitability:

TOL's Return On Assets of 11.94% is amongst the best of the industry. TOL outperforms 81.54% of its industry peers.
Looking at the Return On Equity, with a value of 21.64%, TOL belongs to the top of the industry, outperforming 81.54% of the companies in the same industry.
The Return On Invested Capital of TOL (14.73%) is better than 83.08% of its industry peers.
The last Return On Invested Capital (14.73%) for TOL is above the 3 year average (11.30%), which is a sign of increasing profitability.
TOL has a better Profit Margin (15.07%) than 89.23% of its industry peers.
In the last couple of years the Profit Margin of TOL has grown nicely.
TOL has a Operating Margin of 19.12%. This is amongst the best in the industry. TOL outperforms 92.31% of its industry peers.
In the last couple of years the Operating Margin of TOL has grown nicely.
TOL's Gross Margin has improved in the last couple of years.

Health Insights: NYSE:TOL

ChartMill assigns a Health Rating to every stock. This score ranges from 0 to 10 and evaluates the different health aspects like liquidity and solvency, both absolutely, but also relative to the industry peers. NYSE:TOL scores a 6 out of 10:

An Altman-Z score of 4.14 indicates that TOL is not in any danger for bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 4.14, TOL is in the better half of the industry, outperforming 64.62% of the companies in the same industry.
The Debt to FCF ratio of TOL is 2.35, which is a good value as it means it would take TOL, 2.35 years of fcf income to pay off all of its debts.
TOL's Debt to FCF ratio of 2.35 is fine compared to the rest of the industry. TOL outperforms 70.77% of its industry peers.
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 3.75 indicates that TOL has no problem at all paying its short term obligations.
TOL has a better Current ratio (3.75) than 63.08% of its industry peers.

Assessing Growth for NYSE:TOL

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:

The Earnings Per Share has grown by an nice 16.12% 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.
TOL is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 9.21% yearly.
TOL is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 8.32% yearly.

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

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. 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.