We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Toll Brothers (TOL) Up 175% Over a Year: More Room to Run?
Read MoreHide Full Article
There’s no denying that the U.S. housing data was weak for February as severe cold weather, rise in lumber prices and a lack of supply took a toll on sales’ pace and pushed average home prices higher nationwide.
Nonetheless, builders are witnessing higher demand amid the COVID 19 pandemic, with Americans seeking more space for offices and classrooms.
Toll Brothers Inc. (TOL - Free Report) is one such company that continues to display strength in several areas. Adding the stock to your portfolio should not be a disappointment. The company mostly caters to luxury move-up buyers who already possess a residence but are looking to shift to larger and better homes. These homebuyers are less sensitive to price changes. Toll Brothers enjoys greater pricing power than other homebuilding companies.
Shares of Toll Brothers have gained 175.2% over the past year compared with the industry’s 120.8% rally. Earnings estimates for Toll Brothers have exhibited an uptrend, reflecting optimism in the stock’s prospects. The Zacks Consensus Estimate for the company’s earnings for the current year has moved up 9.5% over the past 60 days. Also, estimates for fiscal 2022 have climbed 18.2% over the same time frame. Let us delve deeper into the other factors that make this Zacks Rank #1 (Strong Buy) stock a lucrative pick.
What Makes the Stock an Attractive Pick?
Favorable Housing Market Backdrop: Although mortgage rates have been inching higher from its historically low level, builder backlogs remain elevated, indicating that residential construction will stay firm in the coming months and contribute to economic growth. Despite the hiccups stemming from extremely tight supply and rising prices, home sales have been increasing at a solid pace. In fact, for February 2021, the new home sales reading moved 17% north from a year ago, depicting the housing market’s strength.
For fiscal first-quarter 2021, the number of net signed contracts or orders was 2,874 units, up 59.1% year over year. The value of net signed contracts was $2.51 billion, reflecting a 68.5% increase from the year-ago quarter. At fiscal first quarter-end, it had a backlog of 8,888 homes, representing a 37.6% year-over-year increase. Potential revenues from backlog also grew 37% year over year to $7.47 billion. This provides more visibility for strong top-line growth going forward.
Solid Prospects: Toll Brothers has solid prospects, as is evident from the Zacks Consensus Estimate for earnings of $5.21 per share for the current year, indicating 53.2% year-over-year growth. Meanwhile, the company’s sales are expected to increase 17.4% in the current year.
Acquisitions: It has been expanding geographically via selective acquisitions. In September 2020, Toll Brothers expanded into the Colorado Springs market through the acquisition of Keller Homes, one of the top private home building companies in Colorado Springs. Colorado Springs is a dynamic housing market, which complements Toll Brothers’ operations in metro Denver and Fort Collins. The said market is rated as “#1 Hottest U.S. Housing Market” by USA Today and #3 “Best Place to Live” by U.S. News & World Report in 2020 and 2019, respectively. Importantly, Toll Brothers also acquired the rights to purchase more than 300 lots that Keller controls throughout Colorado Springs.
Toll Brothers acquired all assets and operations of Thrive Residential — an urban in-fill builder with operations in Atlanta, Georgia and Nashville, TN — during second-quarter fiscal 2020. Management is now targeting community count growth of 320 for second-quarter fiscal 2021 and 340 for fiscal 2021, which will reflect accelerating land acquisition and development to meet the resurgence in homebuyer demand.
Other Stocks to Consider
Other top-ranked stocks in the same space include KB Home (KBH - Free Report) , Lennar (LEN - Free Report) and M.D.C. Holdings, Inc. .
KB Home sports a Zacks Rank #1 and is likely to witness a rise of 74.8% in earnings for the current fiscal year.
M.D.C, also a Zacks Rank #2 stock, is expected to witness 34.6% growth in 2021 earnings.
These Stocks Are Poised to Soar Past the Pandemic
The COVID-19 outbreak has shifted consumer behavior dramatically, and a handful of high-tech companies have stepped up to keep America running. Right now, investors in these companies have a shot at serious profits. For example, Zoom jumped 108.5% in less than 4 months while most other stocks were sinking.
Our research shows that 5 cutting-edge stocks could skyrocket from the exponential increase in demand for “stay at home” technologies. This could be one of the biggest buying opportunities of this decade, especially for those who get in early.
Image: Bigstock
Toll Brothers (TOL) Up 175% Over a Year: More Room to Run?
There’s no denying that the U.S. housing data was weak for February as severe cold weather, rise in lumber prices and a lack of supply took a toll on sales’ pace and pushed average home prices higher nationwide.
.jpg)
Nonetheless, builders are witnessing higher demand amid the COVID 19 pandemic, with Americans seeking more space for offices and classrooms.
Toll Brothers Inc. (TOL - Free Report) is one such company that continues to display strength in several areas. Adding the stock to your portfolio should not be a disappointment. The company mostly caters to luxury move-up buyers who already possess a residence but are looking to shift to larger and better homes. These homebuyers are less sensitive to price changes. Toll Brothers enjoys greater pricing power than other homebuilding companies.
Shares of Toll Brothers have gained 175.2% over the past year compared with the industry’s 120.8% rally. Earnings estimates for Toll Brothers have exhibited an uptrend, reflecting optimism in the stock’s prospects. The Zacks Consensus Estimate for the company’s earnings for the current year has moved up 9.5% over the past 60 days. Also, estimates for fiscal 2022 have climbed 18.2% over the same time frame. Let us delve deeper into the other factors that make this Zacks Rank #1 (Strong Buy) stock a lucrative pick.
What Makes the Stock an Attractive Pick?
Favorable Housing Market Backdrop: Although mortgage rates have been inching higher from its historically low level, builder backlogs remain elevated, indicating that residential construction will stay firm in the coming months and contribute to economic growth. Despite the hiccups stemming from extremely tight supply and rising prices, home sales have been increasing at a solid pace. In fact, for February 2021, the new home sales reading moved 17% north from a year ago, depicting the housing market’s strength.
For fiscal first-quarter 2021, the number of net signed contracts or orders was 2,874 units, up 59.1% year over year. The value of net signed contracts was $2.51 billion, reflecting a 68.5% increase from the year-ago quarter. At fiscal first quarter-end, it had a backlog of 8,888 homes, representing a 37.6% year-over-year increase. Potential revenues from backlog also grew 37% year over year to $7.47 billion. This provides more visibility for strong top-line growth going forward.
Solid Prospects: Toll Brothers has solid prospects, as is evident from the Zacks Consensus Estimate for earnings of $5.21 per share for the current year, indicating 53.2% year-over-year growth. Meanwhile, the company’s sales are expected to increase 17.4% in the current year.
Acquisitions: It has been expanding geographically via selective acquisitions. In September 2020, Toll Brothers expanded into the Colorado Springs market through the acquisition of Keller Homes, one of the top private home building companies in Colorado Springs. Colorado Springs is a dynamic housing market, which complements Toll Brothers’ operations in metro Denver and Fort Collins. The said market is rated as “#1 Hottest U.S. Housing Market” by USA Today and #3 “Best Place to Live” by U.S. News & World Report in 2020 and 2019, respectively. Importantly, Toll Brothers also acquired the rights to purchase more than 300 lots that Keller controls throughout Colorado Springs.
Toll Brothers acquired all assets and operations of Thrive Residential — an urban in-fill builder with operations in Atlanta, Georgia and Nashville, TN — during second-quarter fiscal 2020. Management is now targeting community count growth of 320 for second-quarter fiscal 2021 and 340 for fiscal 2021, which will reflect accelerating land acquisition and development to meet the resurgence in homebuyer demand.
Other Stocks to Consider
Other top-ranked stocks in the same space include KB Home (KBH - Free Report) , Lennar (LEN - Free Report) and M.D.C. Holdings, Inc. .
KB Home sports a Zacks Rank #1 and is likely to witness a rise of 74.8% in earnings for the current fiscal year.
Lennar, a Zacks Rank #2 (Buy) stock, is expected to witness 39.9% growth in earnings this year. You can see the complete list of today’s Zacks #1 Rank stocks here.
M.D.C, also a Zacks Rank #2 stock, is expected to witness 34.6% growth in 2021 earnings.
These Stocks Are Poised to Soar Past the Pandemic
The COVID-19 outbreak has shifted consumer behavior dramatically, and a handful of high-tech companies have stepped up to keep America running. Right now, investors in these companies have a shot at serious profits. For example, Zoom jumped 108.5% in less than 4 months while most other stocks were sinking.
Our research shows that 5 cutting-edge stocks could skyrocket from the exponential increase in demand for “stay at home” technologies. This could be one of the biggest buying opportunities of this decade, especially for those who get in early.
See the 5 high-tech stocks now>>