Don't overlook NYSE:TOL—it's a hidden gem with strong fundamentals and an attractive price tag.

Our stock screener has spotted TOLL BROTHERS INC (NYSE:TOL) as an undervalued stock with solid fundamentals. NYSE:TOL shows decent health and profitability. At the same time it remains remains attractively priced. We'll dive into each aspect below.

A Closer Look at Valuation for NYSE:TOL

To assess a stock's valuation, ChartMill utilizes a Valuation Rating on a scale of 0 to 10. This comprehensive assessment considers various valuation aspects, comparing price to earnings and cash flows, while factoring in profitability and growth. NYSE:TOL has achieved a 7 out of 10:

• The Price/Earnings ratio is 10.33, which indicates a very decent valuation of TOL.
• TOL's Price/Earnings ratio is a bit cheaper when compared to the industry. TOL is cheaper than 69.23% of the companies in the same industry.
• TOL is valuated cheaply when we compare the Price/Earnings ratio to 29.93, which is the current average of the S&P500 Index.
• Based on the Price/Forward Earnings ratio of 9.65, the valuation of TOL can be described as reasonable.
• Based on the Price/Forward Earnings ratio, TOL is valued a bit cheaper than the industry average as 72.31% of the companies are valued more expensively.
• TOL is valuated cheaply when we compare the Price/Forward Earnings ratio to 21.45, which is the current average of the S&P500 Index.
• TOL's Enterprise Value to EBITDA ratio is a bit cheaper when compared to the industry. TOL is cheaper than 76.92% of the companies in the same industry.
• Based on the Price/Free Cash Flow ratio, TOL is valued a bit cheaper than the industry average as 73.85% of the companies are valued more expensively.
• 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.

What does the Profitability looks like for 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:

• TOL has a better Return On Assets (11.94%) than 81.54% of its industry peers.
• TOL's Return On Equity of 21.64% is fine compared to the rest of the industry. TOL outperforms 80.00% of its industry peers.
• TOL has a better Return On Invested Capital (14.73%) 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.
• The Profit Margin of TOL (15.07%) is better than 90.77% of its industry peers.
• In the last couple of years the Profit Margin of TOL has grown nicely.
• Looking at the Operating Margin, with a value of 19.12%, TOL belongs to the top of the industry, outperforming 92.31% 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.

What does the Health looks like for NYSE:TOL

To gauge a stock's financial health, ChartMill utilizes a Health Rating on a scale of 0 to 10. This comprehensive evaluation encompasses liquidity and solvency, both in absolute terms and in comparison to industry peers. NYSE:TOL has earned a 6 out of 10:

• TOL has an Altman-Z score of 4.25. This indicates that TOL is financially healthy and has little risk of bankruptcy at the moment.
• Looking at the Altman-Z score, with a value of 4.25, TOL is in the better half of the industry, outperforming 64.62% of the companies in the same industry.
• TOL has a debt to FCF ratio of 2.35. This is a good value and a sign of high solvency as TOL would need 2.35 years to pay back of all of its debts.
• The Debt to FCF ratio of TOL (2.35) is better than 69.23% of its industry peers.
• A Debt/Equity ratio of 0.39 indicates that TOL is not too dependend on debt financing.
• 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 64.62% of its industry peers.

Growth Examination 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:

• 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.
• The Earnings Per Share is expected to grow by 9.21% on average over the next years. This is quite good.
• The Revenue is expected to grow by 8.32% on average over the next years. This is quite good.

More Decent Value stocks can be found in our Decent Value screener.

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

Disclaimer

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.