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Is Toll Brothers (TOL) a Great Value Stock Right Now?

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Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore strong picks.

Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader market. Value investors use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.

In addition to the Zacks Rank, investors looking for stocks with specific traits can utilize our Style Scores system. Of course, value investors will be most interested in the system's "Value" category. Stocks with "A" grades for Value and high Zacks Ranks are among the best value stocks available at any given moment.

One company value investors might notice is Toll Brothers (TOL - Free Report) . TOL is currently sporting a Zacks Rank of #1 (Strong Buy), as well as a Value grade of A. The stock holds a P/E ratio of 7.19, while its industry has an average P/E of 7.50. Over the last 12 months, TOL's Forward P/E has been as high as 11.65 and as low as 6.50, with a median of 8.04.

We also note that TOL holds a PEG ratio of 0.27. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. TOL's industry has an average PEG of 0.49 right now. Over the last 12 months, TOL's PEG has been as high as 0.75 and as low as 0.18, with a median of 0.58.

Investors should also recognize that TOL has a P/B ratio of 1.63. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. This company's current P/B looks solid when compared to its industry's average P/B of 1.67. Within the past 52 weeks, TOL's P/B has been as high as 1.70 and as low as 1.08, with a median of 1.45.

These are only a few of the key metrics included in Toll Brothers's strong Value grade, but they help show that the stock is likely undervalued right now. When factoring in the strength of its earnings outlook, TOL looks like an impressive value stock at the moment.


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