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Why Is Toll Brothers (TOL) Up 5.5% Since the Last Earnings Report?
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It has been about a month since the last earnings report for Toll Brothers Inc. (TOL - Free Report) . Shares have added about 5.5% in that time frame, outperforming the market.
Will the recent positive trend continue leading up to the stock's next earnings release, or is it due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Toll Brothers reported adjusted earnings of $0.42 per share in the first quarter of fiscal 2017, beating the Zacks Consensus Estimate of $0.35 by 20%. Adjusted earnings also improved 5% year over year.
Toll Brothers reported revenues of $920.7 million in the fiscal first quarter, surpassing the Zacks Consensus Estimate of $875 million by nearly 5.2%. Revenues were however down a slight 0.8% year over year.
Quarter Detail
Toll Brothers offers homes under two segments – Traditional Home Building Product and City Living.
Traditional Home Building revenues during the quarter totaled $902.8 million, up 14% year over year. However, City Living reported revenues of $17.9 million were down from $137 million in the prior-year quarter due to a lower number of homes delivered.
Consolidated homebuilding deliveries rose 11.9% year over year to 1,190 units in the first quarter of fiscal 2017. Deliveries increased across all West, North and Mid-Atlantic regions,barring California and South regions.
Average price of homes delivered was $773,700 in the quarter, down 11.4% year over year.
The number of net orders signed was 1,522 units in the first quarter, up 21.8% year over year. Value of net orders signed during the quarter was $1.24 billion, up 14.4% year over year.
At the end of the fiscal first quarter, Toll Brothers had a backlog of 5,145 homes, up 21% year over year. Potential housing revenues from backlog grew 18.6% year over year to $4.35 billion. The average price of backlog was $844,500 in the first quarter, compared with $861,600 in the prior-year quarter.
The company’s homebuilding adjusted gross margin (excluding interest impairments and changes in reserves) decreased 300 basis points (bps) to 23.9% in the quarter.
As a percentage of revenues, SG&A expenses increased to 14.9% compared with 13.1% in the first quarter of fiscal 2016.
Other Update
On Feb 21, 2017, the company announced that its board of directors approved the initiation of a cash dividend for shareholders. The first quarterly dividend of $0.08 per share, equivalent to approximately 1% annualized of the company’s current share price ($33.93 as on Feb 22) will be paid on Apr 28, 2017, to shareholders of record as on the close of business on Apr 14, 2017.
Fiscal 2017 Outlook
The company maintained its guidance for fiscal 2017.
The company expects home deliveries between 1,350 units and 1,650 units in the second quarter of fiscal 2017 with an average price of $810,000 to $835,000. For fiscal 2017, home deliveries are now anticipated in the range of 6,700 (6,500 previously) to 7,500 units with an average price of $775,000–$825,000.
Revenues are expected to range between $5.19 billion and $6.19 billion for fiscal 2017, compared to $5.17 billion in fiscal 2016.
Adjusted gross margin in fiscal 2017 is expected in the range of 24.8–25.3% of revenues, reflecting the impact of the Coleman Homes acquisition and changes in product deliveries mix. Second-quarter adjusted gross margin will likely be between 23.8% and 24.2% of revenues.
Second-quarter fiscal 2017 SG&A is expected to be approximately 11.4% of revenues. SG&A, as a percentage of fiscal 2017 revenues, is expected to be approximately 10.6%.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimate flatlined during the past month. There have been two revisions higher for the current quarter compared to two lower.
At this time, Toll Brothers' stock has a poor Growth Score of 'F', however its Momentum is doing a bit better with a 'C'. However, the stock was allocated a grade of 'B' on the value side, putting it in the top 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of 'D'. If you aren't focused on one strategy, this score is the one you should be interested in.
The company's stock is more suitable for value than momentum based on our styles scores.
Outlook
Notably, the stock has a Zacks Rank #3 (Hold). We are looking for an inline return from the stock in the next few months.
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Why Is Toll Brothers (TOL) Up 5.5% Since the Last Earnings Report?
It has been about a month since the last earnings report for Toll Brothers Inc. (TOL - Free Report) . Shares have added about 5.5% in that time frame, outperforming the market.
Will the recent positive trend continue leading up to the stock's next earnings release, or is it due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Toll Brothers Tops Q1 Earnings, Revenues; Keeps View
Toll Brothers reported adjusted earnings of $0.42 per share in the first quarter of fiscal 2017, beating the Zacks Consensus Estimate of $0.35 by 20%. Adjusted earnings also improved 5% year over year.
Toll Brothers reported revenues of $920.7 million in the fiscal first quarter, surpassing the Zacks Consensus Estimate of $875 million by nearly 5.2%. Revenues were however down a slight 0.8% year over year.
Quarter Detail
Toll Brothers offers homes under two segments – Traditional Home Building Product and City Living.
Traditional Home Building revenues during the quarter totaled $902.8 million, up 14% year over year. However, City Living reported revenues of $17.9 million were down from $137 million in the prior-year quarter due to a lower number of homes delivered.
Consolidated homebuilding deliveries rose 11.9% year over year to 1,190 units in the first quarter of fiscal 2017. Deliveries increased across all West, North and Mid-Atlantic regions,barring California and South regions.
Average price of homes delivered was $773,700 in the quarter, down 11.4% year over year.
The number of net orders signed was 1,522 units in the first quarter, up 21.8% year over year. Value of net orders signed during the quarter was $1.24 billion, up 14.4% year over year.
At the end of the fiscal first quarter, Toll Brothers had a backlog of 5,145 homes, up 21% year over year. Potential housing revenues from backlog grew 18.6% year over year to $4.35 billion. The average price of backlog was $844,500 in the first quarter, compared with $861,600 in the prior-year quarter.
The company’s homebuilding adjusted gross margin (excluding interest impairments and changes in reserves) decreased 300 basis points (bps) to 23.9% in the quarter.
As a percentage of revenues, SG&A expenses increased to 14.9% compared with 13.1% in the first quarter of fiscal 2016.
Other Update
On Feb 21, 2017, the company announced that its board of directors approved the initiation of a cash dividend for shareholders. The first quarterly dividend of $0.08 per share, equivalent to approximately 1% annualized of the company’s current share price ($33.93 as on Feb 22) will be paid on Apr 28, 2017, to shareholders of record as on the close of business on Apr 14, 2017.
Fiscal 2017 Outlook
The company maintained its guidance for fiscal 2017.
The company expects home deliveries between 1,350 units and 1,650 units in the second quarter of fiscal 2017 with an average price of $810,000 to $835,000. For fiscal 2017, home deliveries are now anticipated in the range of 6,700 (6,500 previously) to 7,500 units with an average price of $775,000–$825,000.
Revenues are expected to range between $5.19 billion and $6.19 billion for fiscal 2017, compared to $5.17 billion in fiscal 2016.
Adjusted gross margin in fiscal 2017 is expected in the range of 24.8–25.3% of revenues, reflecting the impact of the Coleman Homes acquisition and changes in product deliveries mix. Second-quarter adjusted gross margin will likely be between 23.8% and 24.2% of revenues.
Second-quarter fiscal 2017 SG&A is expected to be approximately 11.4% of revenues. SG&A, as a percentage of fiscal 2017 revenues, is expected to be approximately 10.6%.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimate flatlined during the past month. There have been two revisions higher for the current quarter compared to two lower.
Toll Brothers Inc. Price and Consensus
Toll Brothers Inc. Price and Consensus | Toll Brothers Inc. Quote
VGM Scores
At this time, Toll Brothers' stock has a poor Growth Score of 'F', however its Momentum is doing a bit better with a 'C'. However, the stock was allocated a grade of 'B' on the value side, putting it in the top 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of 'D'. If you aren't focused on one strategy, this score is the one you should be interested in.
The company's stock is more suitable for value than momentum based on our styles scores.
Outlook
Notably, the stock has a Zacks Rank #3 (Hold). We are looking for an inline return from the stock in the next few months.