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Toll Brothers (TOL) Dips More Than Broader Markets: What You Should Know

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Toll Brothers (TOL - Free Report) closed at $65.31 in the latest trading session, marking a -1.03% move from the prior day. This change lagged the S&P 500's 0.46% loss on the day. At the same time, the Dow lost 0.7%, and the tech-heavy Nasdaq lost 0.68%.

Coming into today, shares of the home builder had gained 9.18% in the past month. In that same time, the Construction sector gained 8.84%, while the S&P 500 gained 4.05%.

Toll Brothers will be looking to display strength as it nears its next earnings release, which is expected to be December 7, 2021. The company is expected to report EPS of $2.48, up 60% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $2.91 billion, up 14.46% from the year-ago period.

It is also important to note the recent changes to analyst estimates for Toll Brothers. Recent revisions tend to reflect the latest near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 0.21% higher. Toll Brothers currently has a Zacks Rank of #2 (Buy).

In terms of valuation, Toll Brothers is currently trading at a Forward P/E ratio of 7.47. Its industry sports an average Forward P/E of 7.3, so we one might conclude that Toll Brothers is trading at a premium comparatively.

Meanwhile, TOL's PEG ratio is currently 0.19. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. TOL's industry had an average PEG ratio of 0.34 as of yesterday's close.

The Building Products - Home Builders industry is part of the Construction sector. This industry currently has a Zacks Industry Rank of 66, which puts it in the top 26% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.


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