Toll Brothers Inc. Common Stock (TOL)

FairStock Score: 76/100 — HIGH CONVICTION

Key Financials

AI Analysis

AI-generated, general educational analysis — not personal investment advice.

I am wary of cyclical businesses dressed as growth stories. Toll Brothers builds luxury homes, a business with real brand appeal but no wide moat; customers can buy from other builders, and earnings follow the housing cycle. The figures show a cyclical: FairStock labels it Residential Construction, and fiscal 2025 net income was $1.3B, down from $1.6B in fiscal 2024, even as revenue edged up to $11.0B from $10.8B. Yet the balance sheet is sturdy: debt-to-equity 0.34, Altman Z-Score 3.17, trailing free cash flow $1.1B, and an 8.9% FCF yield. In fiscal Q3 2026, the quarter ended 2026-07-31, revenue was $2.7B, net income $280.1M, and diluted EPS $2.97; that followed $2.5B revenue and $2.72 diluted EPS in fiscal Q2 2026, and $2.1B revenue and $2.19 diluted EPS in fiscal Q1 2026. Full fiscal 2025 diluted EPS was $13.49, down from $15.01 in fiscal 2024. At $132.65 on 2026-10-13, FairStock calculates a P/E of 10.69, P/B of 1.44, EV/EBITDA of 8.99, and a Graham Number of $160.59, implying a 17.40% margin of safety. ROE is 14.39%, but ROCE is only 6.90%, reminding me this is capital-intensive. Piotroski F-Score is 6/9. I would call this a reasonably priced cyclical with a solid balance sheet, not a bargain requiring no caution. The price may discount a downturn, but the business must prove earnings have not peaked.

In plain English: Toll Brothers builds luxury homes in the United States. The company is profitable and carries manageable debt, but homebuilding is a cyclical business and profits have softened recently. At the recent stock price, the shares look reasonably valued to somewhat cheap against the company's earnings and asset values, though the housing cycle remains a real risk.

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Data as of 2026-10-13 close · note generated 2026-10-15 · model deepseek-flash

Sources (SEC EDGAR): fiscal Q3 2026 10-Q (period ended 2026-07-31) · fiscal Q2 2026 10-Q (period ended 2026-04-30) · fiscal Q1 2026 10-Q (period ended 2026-01-31) · fiscal Q4 2025 10-K (period ended 2025-10-31) · FY2025 10-K (period ended 2025-10-31) · FY2024 10-K (period ended 2024-10-31) · FY2023 10-K (period ended 2023-10-31)

Fundamentals from company filings and market-data providers; prices are end-of-day, not real-time. AI-generated analysis is general and educational — not personal investment advice. Scoring methodology · Score test · Disclaimer