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Toll Brothers (TOL) Outpaces Stock Market Gains: What You Should Know

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Toll Brothers (TOL - Free Report) closed the most recent trading day at $72.32, moving +1.08% from the previous trading session. This move outpaced the S&P 500's daily gain of 0.14%. Elsewhere, the Dow gained 0.25%, while the tech-heavy Nasdaq lost 0.34%.

Coming into today, shares of the home builder had gained 12.73% in the past month. In that same time, the Construction sector gained 4.7%, while the S&P 500 gained 4.32%.

Investors will be hoping for strength from Toll Brothers as it approaches its next earnings release. On that day, Toll Brothers is projected to report earnings of $1.14 per share, which would represent year-over-year growth of 50%. Meanwhile, our latest consensus estimate is calling for revenue of $1.76 billion, up 12.74% from the prior-year quarter.

TOL's full-year Zacks Consensus Estimates are calling for earnings of $9.70 per share and revenue of $10.35 billion. These results would represent year-over-year changes of +46.3% and +17.75%, respectively.

Investors might also notice recent changes to analyst estimates for Toll Brothers. These revisions help to show the ever-changing nature of near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Within the past 30 days, our consensus EPS projection has moved 9.87% higher. Toll Brothers is holding a Zacks Rank of #1 (Strong Buy) right now.

Investors should also note Toll Brothers's current valuation metrics, including its Forward P/E ratio of 7.38. For comparison, its industry has an average Forward P/E of 6.87, which means Toll Brothers is trading at a premium to the group.

It is also worth noting that TOL currently has a PEG ratio of 0.28. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. The Building Products - Home Builders industry currently had an average PEG ratio of 0.36 as of yesterday's close.

The Building Products - Home Builders industry is part of the Construction sector. This industry currently has a Zacks Industry Rank of 84, which puts it in the top 34% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

To follow TOL in the coming trading sessions, be sure to utilize Zacks.com.


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