Toll Brothers Inc. Common Stock (TOL)

FairStock Score: 76/100 — HIGH CONVICTION

Key Financials

Strengths

• Generates $876 million in annual free cash flow (6.2% yield on market cap)
• Solid return on equity of 17.0% above cost of capital
• Conservative balance sheet with debt-to-equity of just 0.34, providing financial flexibility
• Revenue growth of 15.4% demonstrates strong top-line momentum
• FairStock composite score of 76/100 places it in the top tier across value, quality, and momentum factors

AI Analysis

Toll Brothers Inc. Common Stock is a mid-cap consumer cyclical company valued at $14.0 billion. The business generates $11.3 billion in annual revenue with a 1.9% net margin and $876 million in free cash flow. From a quality standpoint, Toll shows healthy Altman Z-Score of 3.3 and adequate 17% ROE. On valuation, the stock is attractively valued at 10.7x earnings, with a modest 11% margin of safety vs Graham Number. Growth dynamics show revenue growing at 15.4% and profit growth of 18.7%. Our composite FairStock Score of 76/100 reflects strong fundamentals overall. This combination of reasonable valuation, solid returns, and conservative leverage makes it worth a closer look for value-oriented portfolios.

Bull Case

Toll's 15% revenue growth trajectory could accelerate as it captures additional market share in the consumer cyclical sector. With $876 million in annual free cash flow (6.2% yield), management has ample capital for buybacks, dividends, or accretive acquisitions.

Bear Case

Macro headwinds or sector-specific disruption could pressure margins, particularly if competitive intensity increases in the consumer cyclical space. Regulatory changes, input cost inflation, or demand normalization represent underappreciated risks that could materially impact forward estimates.

Data from SEC filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer