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

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Toll Brothers (TOL - Free Report) closed the most recent trading day at $45.71, moving -1.83% from the previous trading session. This move lagged the S&P 500's daily gain of 0.21%. At the same time, the Dow added 0.19%, and the tech-heavy Nasdaq gained 0.01%.

Prior to today's trading, shares of the home builder had lost 8.35% over the past month. This has lagged the Construction sector's loss of 5.67% and the S&P 500's loss of 8.08% in that time.

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 $1.58 per share, which would represent year-over-year growth of 56.44%. Our most recent consensus estimate is calling for quarterly revenue of $2.15 billion, up 11.23% from the year-ago period.

TOL's full-year Zacks Consensus Estimates are calling for earnings of $9.93 per share and revenue of $10.3 billion. These results would represent year-over-year changes of +49.77% and +17.18%, respectively.

Investors should also note any recent changes to analyst estimates for Toll Brothers. These revisions typically reflect the latest short-term business trends, which can change frequently. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Our research shows that these estimate changes are directly correlated with near-term stock prices. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 1.13% lower. Toll Brothers is currently sporting a Zacks Rank of #3 (Hold).

Digging into valuation, Toll Brothers currently has a Forward P/E ratio of 4.69. This valuation marks a premium compared to its industry's average Forward P/E of 4.24.

It is also worth noting that TOL currently has a PEG ratio of 0.61. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. Building Products - Home Builders stocks are, on average, holding a PEG ratio of 0.56 based on yesterday's closing prices.

The Building Products - Home Builders industry is part of the Construction sector. This group has a Zacks Industry Rank of 173, putting it in the bottom 32% 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.

You can find more information on all of these metrics, and much more, on Zacks.com.


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