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Toll Brothers (TOL) Unveils New Design Studio in Sacramento

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In a bid to enhance customers’ retail-like shopping experience, Toll Brothers, Inc. (TOL - Free Report) has stepped into the greater Sacramento market with the opening of its new Design Studio, located at 161 Parkshore Drive in Folsom, CA.

This nearly 4,000-square-foot Design Studio offers a choice of luxury interior design options and premium products from top brands.

The new Design Studio features state-of-the-art design vignettes showcasing the latest trends and curated collections of pre-selected palettes, fixtures, and finishes for design style inspiration. The company’s expert design consultants will guide visitors to personalize their new home through step by step selection process.

Lisa McClelland, the senior vice president of TOL’s Design Studios, said, “The Design Studio process is something that truly sets Toll Brothers apart as a luxury builder. Now more than ever, buyers want the ability to personalize their home with the features and finishes that will make it their dream home. With the help of our dedicated professional design consultants, it is easier than ever for our buyers to make that dream a reality.”

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Currently, Toll Brothers operates 35 Design Studios across the country. Earlier, the company introduced two new home communities in the greater Sacramento. It has been actively selling homes at Skyline, an enclave of single-family homes in Rocklin, and Regency at Folsom Ranch, a 55+ active-adult gated master-planned community offering five collections of single-family and duet homes. This luxury homebuilder is planning to open a new home community in the neighboring area of El Dorado Hills.

Favorable Housing Markets Bode Well

Owing to favorable housing market fundamentals, Toll Brothers has witnessed a rise in consumer demand, which in turn drove new orders. For fiscal 2021, the number of net signed contracts or orders was up 26% year over year. The value of net signed contracts also increased 44% from the year-ago period.

At fiscal 2021-end, it had a backlog of 10,302 homes, representing a 32% year-over-year increase. Potential revenues from backlog also grew 49% year over year to $9.50 billion. This provides more visibility into top-line growth going forward.

Demand for new single-family homes has been accelerating throughout the country and Toll Brothers is not an exception. A combination of lower interest rates and the rising need for more work-at-home space positively impacted affordability, thereby helping the company deliver a solid performance.

Shares of Toll Brothers have gained 6% in the past six months compared with the industry's 1.8% growth. The upside is likely to continue, given accretive acquisitions, its focus on affordable luxury communities and a solid housing market backdrop.

Zacks Rank & Other Key Picks

Toll Brothers currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today's Zacks #1 Rank stocks here.

Other top-ranked stocks in the same industry include PulteGroup, Inc. (PHM - Free Report) , Meritage Homes Corporation (MTH - Free Report) and D.R. Horton, Inc. (DHI - Free Report) , each carrying a Zacks Rank #2 (Buy).

PulteGroup: This Atlanta, GA-based homebuilder engages in homebuilding and financial services businesses, primarily in the United States. Its annual land acquisition strategies have been resulting in improved volumes, revenues and profitability for quite some time now.

PHM’s earnings are expected to grow 37.3% in 2021 and 23.8% in the next.

Meritage Homes: Based in Scottsdale, AZ, Meritage Homes is one of the leading designers and builders of single-family homes. Its focus on entry-level LiVE.NOW homes has been a major driving factor.

MTH’s earnings are expected to grow 74.1% in 2021 and 23.7% in the next.

D.R. Horton: This Texas-based prime homebuilder continues to gain from industry-leading market share, a solid acquisition strategy, a well-stocked supply of land, lots, and homes along with affordable product offerings across multiple brands.

DHI’s earnings are expected to rise 27.1% in fiscal 2022.