Many stocks have been testing new highs in 2020, and one of the most notable is Toll Brothers Inc. (TOL). Currently, TOL is trading at $35.06 and the avg recommendation for the stock is Moderate Buy. while the current analyst price target stands at $34.67.
To add more color to this target, the company’s high over the last year is $49.31 and the low is $13.28. Over the last 52 weeks, TOL is down -28.90% while the S&P 500 is up 1.21%. The catalyst for this interesting swing was the company’s recent earnings report.
A Notable Earnings Report
In the last quarter, TOL reported a profit of $239.25 million. Toll Brothers Inc. also saw revenues increase to $1.33 billion. In addition, TOL has free cash flow of -$393.25 million as of 01-2020 The company’s EBITDA came in at $62.16 million which compares well with its peers.
TOL booked profit margins of 8.40%, its Return on Equity (ROE) is 12.00%, and its Return on Assets is 5.60%. All told, it is clear that, TOL needs to be on your watchlist.
About Toll Brothers Inc.
If readers are unfamiliar, Toll Brothers, Inc., together with its subsidiaries, designs, builds, markets, sells, and arranges finance for detached and attached homes in luxury residential communities in the United States. The company operates in two segments, Traditional Home Building and City Living. It also designs, builds, markets, and sells homes in urban infill markets through Toll Brothers City Living. In addition, the company develops, owns, and operates golf courses and country clubs; develops and sells land; and develops, operates, and rents apartments, as well as provides homeowners with home automation and technology options. Further, it owns and operates architectural, engineering, mortgage, title, landscaping, lumber distribution, house component assembly, and manufacturing operations. The company serves move-up, empty-nester, active-adult, and second-home buyers. Toll Brothers, Inc. was founded in 1967 and is headquartered in Horsham, Pennsylvania.
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Of course, we must look beyond the financials and question how well those numbers represent the sustainable earnings power of the business. Investors need to know how sustainable this current run. TOL has a short ratio of 2.36 and outstanding shares of 138.15M.
TOL has seen increased volume after this news and investors are putting their support behind the value proposition. Furthermore, 10-day volume stands at 2.94 million and more growth is possible in the weeks ahead. Traders will also note the company’s earnings per share came in at 3.40. Toll Brothers Inc. TOL also noted assets of $10.59 billion at the end of the last quarter. Investors should also keep an eye on sector updates as TOL has historically followed its peers on positive news.
All told, Toll Brothers Inc. TOL has strung together solid data and demonstrated underlying fundamentals. At its current valuation, TOL represents an interesting risk/reward case. Traders should stay tuned to see if this recent report will push the stock to test recent resistance levels.
Toll Brothers Inc. TOL is now commanding a market cap of 4.21B and a float of 111.83M. TOL is increasing its credibility in this sector and that could lead to more upside down the line. Sign-up for continuing coverage on shares of TOL stock, as well as other hot stock picks, get our free newsletter today and get our next breakout pick!
Disclosure: we hold no position in TOL, either long or short, and we have not been compensated for this article.