NYSE:TOL is an undervalued gem with solid fundamentals.

Last update: Jun 10, 2024

Our stock screener has spotted TOLL BROTHERS INC (NYSE:TOL) as an undervalued stock with solid fundamentals. NYSE:TOL shows decent health and profitability. At the same time it remains remains attractively priced. We'll dive into each aspect below.

A Closer Look at Valuation for NYSE:TOL

ChartMill employs its own Valuation Rating system for all stocks. This score, ranging from 0 to 10, is determined by evaluating different valuation factors, including price to earnings and free cash flow, both in absolute terms and relative to the market and industry. NYSE:TOL has earned a 8 for valuation:

TOL is valuated reasonably with a Price/Earnings ratio of 8.69.
Based on the Price/Earnings ratio, TOL is valued a bit cheaper than 78.79% of the companies in the same industry.
Compared to an average S&P500 Price/Earnings ratio of 28.12, TOL is valued rather cheaply.
With a Price/Forward Earnings ratio of 8.46, the valuation of TOL can be described as very reasonable.
TOL's Price/Forward Earnings ratio is a bit cheaper when compared to the industry. TOL is cheaper than 75.76% of the companies in the same industry.
TOL is valuated cheaply when we compare the Price/Forward Earnings ratio to 19.99, which is the current average of the S&P500 Index.
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of TOL indicates a rather cheap valuation: TOL is cheaper than 80.30% of the companies listed in the same industry.
TOL's Price/Free Cash Flow ratio is a bit cheaper when compared to the industry. TOL is cheaper than 71.21% of the companies in the same industry.
The low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
The excellent profitability rating of TOL may justify a higher PE ratio.

Exploring NYSE:TOL's Profitability

Discover ChartMill's exclusive Profitability Rating, a proprietary metric that assesses stocks on a scale of 0 to 10. It takes into consideration various profitability ratios and margins, both in absolute terms and relative to industry peers. Notably, NYSE:TOL has achieved a 9:

TOL has a Return On Assets of 11.94%. This is amongst the best in the industry. TOL outperforms 86.36% of its industry peers.
The Return On Equity of TOL (21.64%) is better than 84.85% of its industry peers.
TOL has a better Return On Invested Capital (14.73%) than 89.39% of its industry peers.
The 3 year average ROIC (11.30%) for TOL is below the current ROIC(14.73%), indicating increased profibility in the last year.
TOL has a better Profit Margin (15.07%) than 89.39% of its industry peers.
TOL's Profit Margin has improved in the last couple of years.
The Operating Margin of TOL (19.12%) is better than 92.42% of its industry peers.
In the last couple of years the Operating Margin of TOL has grown nicely.
TOL's Gross Margin has improved in the last couple of years.

A Closer Look at Health for NYSE:TOL

ChartMill utilizes a Health Rating to assess stocks, scoring them on a scale of 0 to 10. This rating takes into account a variety of liquidity and solvency ratios, both in absolute terms and in comparison to industry peers. NYSE:TOL has earned a 6 out of 10:

An Altman-Z score of 4.04 indicates that TOL is not in any danger for bankruptcy at the moment.
TOL has a Altman-Z score of 4.04. This is in the better half of the industry: TOL outperforms 66.67% of its industry peers.
TOL has a debt to FCF ratio of 2.35. This is a good value and a sign of high solvency as TOL would need 2.35 years to pay back of all of its debts.
With a decent Debt to FCF ratio value of 2.35, TOL is doing good in the industry, outperforming 69.70% of the companies in the same industry.
A Debt/Equity ratio of 0.39 indicates that TOL is not too dependend on debt financing.
A Current Ratio of 3.75 indicates that TOL has no problem at all paying its short term obligations.
TOL has a better Current ratio (3.75) than 60.61% of its industry peers.

ChartMill's Evaluation of Growth

To evaluate a stock's growth potential, ChartMill utilizes a Growth Rating on a scale of 0 to 10. This comprehensive assessment considers various growth aspects, including historical and estimated EPS and revenue growth. NYSE:TOL has achieved a 4 out of 10:

The Earnings Per Share has grown by an nice 16.12% over the past year.
TOL shows a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 21.45% yearly.
Based on estimates for the next years, TOL will show a quite strong growth in Earnings Per Share. The EPS will grow by 8.38% on average per year.

More Decent Value stocks can be found in our Decent Value screener.

Check the latest full fundamental report of TOL for a complete fundamental analysis.

Keep in mind

Important Note: The content of this article is not intended as trading advice. It is essential to perform your own analysis and exercise caution when making trading decisions. The article presents observations created by automated analysis but does not guarantee any trading or investment outcomes. Always trade responsibly and make independent judgments.