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Toll Brothers (TOL) Gains As Market Dips: What You Should Know

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Toll Brothers (TOL - Free Report) closed at $67.27 in the latest trading session, marking a +0.22% move from the prior day. This change outpaced the S&P 500's 1.42% loss on the day. Meanwhile, the Dow lost 0.49%, and the Nasdaq, a tech-heavy index, lost 0.47%.

Coming into today, shares of the home builder had lost 5.65% in the past month. In that same time, the Construction sector lost 4.33%, while the S&P 500 gained 0.39%.

Investors will be hoping for strength from Toll Brothers as it approaches its next earnings release. On that day, Toll Brothers is projected to report earnings of $1.14 per share, which would represent year-over-year growth of 50%. Meanwhile, our latest consensus estimate is calling for revenue of $1.76 billion, up 12.74% from the prior-year quarter.

TOL's full-year Zacks Consensus Estimates are calling for earnings of $9.70 per share and revenue of $10.35 billion. These results would represent year-over-year changes of +46.3% and +17.75%, respectively.

Investors might also notice recent changes to analyst estimates for Toll Brothers. These revisions help to show the ever-changing nature of near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

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. The Zacks Consensus EPS estimate remained stagnant within the past month. Toll Brothers currently has a Zacks Rank of #1 (Strong Buy).

Looking at its valuation, Toll Brothers is holding a Forward P/E ratio of 6.92. This valuation marks a premium compared to its industry's average Forward P/E of 5.75.

It is also worth noting that TOL currently has a PEG ratio of 0.26. 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. The Building Products - Home Builders industry currently had an average PEG ratio of 0.27 as of yesterday's close.

The Building Products - Home Builders industry is part of the Construction sector. This group has a Zacks Industry Rank of 55, putting it in the top 22% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our 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.

Make sure to utilize Zacks.com to follow all of these stock-moving metrics, and more, in the coming trading sessions.


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