We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Toll Brothers Inc. (TOL) Hit a 52 Week High, Can the Run Continue?
Read MoreHide Full Article
Have you been paying attention to shares of Toll Brothers (TOL - Free Report) ? Shares have been on the move with the stock up 8.9% over the past month. The stock hit a new 52-week high of $64.89 in the previous session. Toll Brothers has gained 27.7% since the start of the year compared to the 13.9% move for the Zacks Construction sector and the 31% return for the Zacks Building Products - Home Builders industry.
What's Driving the Outperformance?
The stock has a great record of positive earnings surprises, as it hasn't missed our earnings consensus estimate in any of the last four quarters. In its last earnings report on February 21, 2023, Toll Brothers reported EPS of $1.7 versus consensus estimate of $1.37.
For the current fiscal year, Toll Brothers is expected to post earnings of $8.66 per share on $8.37 billion in revenues. This represents a -12.88% change in EPS on a -18.56% change in revenues. For the next fiscal year, the company is expected to earn $8.06 per share on $8.35 billion in revenues. This represents a year-over-year change of -6.93% and -0.28%, respectively.
Valuation Metrics
Toll Brothers may be at a 52-week high right now, but what might the future hold for the stock? A key aspect of this question is taking a look at valuation metrics in order to determine if the company has run ahead of itself.
On this front, we can look at the Zacks Style Scores, as these give investors a variety of ways to comb through stocks (beyond looking at the Zacks Rank of a security). These styles are represented by grades running from A to F in the categories of Value, Growth, and Momentum, while there is a combined VGM Score as well. The idea behind the style scores is to help investors pick the most appropriate Zacks Rank stocks based on their individual investment style.
Toll Brothers has a Value Score of A. The stock's Growth and Momentum Scores are D and B, respectively, giving the company a VGM Score of B.
In terms of its value breakdown, the stock currently trades at 7.4X current fiscal year EPS estimates, which is not in-line with the peer industry average of 8.8X. On a trailing cash flow basis, the stock currently trades at 5.8X versus its peer group's average of 5.4X. Additionally, the stock has a PEG ratio of 0.67. This isn't enough to put the company in the top echelon of all stocks we cover from a value perspective.
Zacks Rank
We also need to consider the stock's Zacks Rank, as this supersedes any trend on the style score front. Fortunately, Toll Brothers currently has a Zacks Rank of #2 (Buy) thanks to rising earnings estimates.
Since we recommend that investors select stocks carrying Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B, it looks as if Toll Brothers passes the test. Thus, it seems as though Toll Brothers shares could have potential in the weeks and months to come.
How Does TOL Stack Up to the Competition?
Shares of TOL have been soaring, and the company still appears to be a decent choice, but what about the rest of the industry? One industry peer that looks good is Beazer Homes USA, Inc. (BZH - Free Report) . BZH has a Zacks Rank of # 1 (Strong Buy) and a Value Score of A, a Growth Score of B, and a Momentum Score of A.
Earnings were strong last quarter. Beazer Homes USA, Inc. beat our consensus estimate by 34.52%, and for the current fiscal year, BZH is expected to post earnings of $3.95 per share on revenue of $2.05 billion.
Shares of Beazer Homes USA, Inc. have gained 27.2% over the past month, and currently trade at a forward P/E of 5.06X and a P/CF of 2.67X.
The Building Products - Home Builders industry is in the top 6% of all the industries we have in our universe, so it looks like there are some nice tailwinds for TOL and BZH, even beyond their own solid fundamental situation.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Toll Brothers Inc. (TOL) Hit a 52 Week High, Can the Run Continue?
Have you been paying attention to shares of Toll Brothers (TOL - Free Report) ? Shares have been on the move with the stock up 8.9% over the past month. The stock hit a new 52-week high of $64.89 in the previous session. Toll Brothers has gained 27.7% since the start of the year compared to the 13.9% move for the Zacks Construction sector and the 31% return for the Zacks Building Products - Home Builders industry.
What's Driving the Outperformance?
The stock has a great record of positive earnings surprises, as it hasn't missed our earnings consensus estimate in any of the last four quarters. In its last earnings report on February 21, 2023, Toll Brothers reported EPS of $1.7 versus consensus estimate of $1.37.
For the current fiscal year, Toll Brothers is expected to post earnings of $8.66 per share on $8.37 billion in revenues. This represents a -12.88% change in EPS on a -18.56% change in revenues. For the next fiscal year, the company is expected to earn $8.06 per share on $8.35 billion in revenues. This represents a year-over-year change of -6.93% and -0.28%, respectively.
Valuation Metrics
Toll Brothers may be at a 52-week high right now, but what might the future hold for the stock? A key aspect of this question is taking a look at valuation metrics in order to determine if the company has run ahead of itself.
On this front, we can look at the Zacks Style Scores, as these give investors a variety of ways to comb through stocks (beyond looking at the Zacks Rank of a security). These styles are represented by grades running from A to F in the categories of Value, Growth, and Momentum, while there is a combined VGM Score as well. The idea behind the style scores is to help investors pick the most appropriate Zacks Rank stocks based on their individual investment style.
Toll Brothers has a Value Score of A. The stock's Growth and Momentum Scores are D and B, respectively, giving the company a VGM Score of B.
In terms of its value breakdown, the stock currently trades at 7.4X current fiscal year EPS estimates, which is not in-line with the peer industry average of 8.8X. On a trailing cash flow basis, the stock currently trades at 5.8X versus its peer group's average of 5.4X. Additionally, the stock has a PEG ratio of 0.67. This isn't enough to put the company in the top echelon of all stocks we cover from a value perspective.
Zacks Rank
We also need to consider the stock's Zacks Rank, as this supersedes any trend on the style score front. Fortunately, Toll Brothers currently has a Zacks Rank of #2 (Buy) thanks to rising earnings estimates.
Since we recommend that investors select stocks carrying Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B, it looks as if Toll Brothers passes the test. Thus, it seems as though Toll Brothers shares could have potential in the weeks and months to come.
How Does TOL Stack Up to the Competition?
Shares of TOL have been soaring, and the company still appears to be a decent choice, but what about the rest of the industry? One industry peer that looks good is Beazer Homes USA, Inc. (BZH - Free Report) . BZH has a Zacks Rank of # 1 (Strong Buy) and a Value Score of A, a Growth Score of B, and a Momentum Score of A.
Earnings were strong last quarter. Beazer Homes USA, Inc. beat our consensus estimate by 34.52%, and for the current fiscal year, BZH is expected to post earnings of $3.95 per share on revenue of $2.05 billion.
Shares of Beazer Homes USA, Inc. have gained 27.2% over the past month, and currently trade at a forward P/E of 5.06X and a P/CF of 2.67X.
The Building Products - Home Builders industry is in the top 6% of all the industries we have in our universe, so it looks like there are some nice tailwinds for TOL and BZH, even beyond their own solid fundamental situation.