How much a stock's price changes over time is important for most investors, since price performance can both impact your investment portfolio and help you compare investment results across sectors and industries.

Another factor that can influence investors is FOMO, or the fear of missing out, especially with tech giants and popular consumer-facing stocks.

What if you'd invested in Toll Brothers (TOL Quick QuoteTOL - Free Report) ten years ago? It may not have been easy to hold on to TOL for all that time, but if you did, how much would your investment be worth today?

Toll Brothers' Business In-Depth

With that in mind, let's take a look at Toll Brothers' main business drivers.

Based in Horsham, PA, Toll Brothers Inc. builds single-family detached and attached home communities; master planned luxury residential resort-style golf communities; and urban low, mid, and high-rise communities, principally on the land it develops and improves.

Notably, during fourth-quarter fiscal 2022 earnings call, the company concluded that City Living operations no longer meet the definition of an operating segment, primarily due to the change in structure and a shift in strategy for its operations.

Toll Brothers now operates in five geographical segments — North (accounted for 14.9% of fiscal 2023 sales), Mid-Atlantic (11.8%), South (22.1%), Mountain (26.6%) and Pacific (23.3%).

Since November 2018, the company started reporting land sale activities under the Land sales and other category (1.3%).

Toll Brothers is also building homes for rental apartment projects. Toll Brothers Apartment Living, Toll Brothers Realty Trust and Toll Brothers Campus Living are brands offered under this rental apartment project. These rental projects operate in lucrative markets like metro-Boston to metro-Washington, D.C. corridor and Atlanta.

At the end of the fiscal third quarter, Toll Brothers had more than $2.66 billion of total liquidity, comprising $893.4 million in cash and cash equivalents and $1.77 billion available under the revolver capacity. The revolving bank credit facility will not mature until February 2028. Also, total debt at the fiscal third-quarter end was $2.82 billion, down from $2.86 billion at the fiscal 2023 end. Debt to capital was 27.6% at the fiscal third-quarter end, down from 29.6% at the fiscal 2023-end.

Bottom Line

Putting together a successful investment portfolio takes a combination of research, patience, and a little bit of risk. For Toll Brothers, if you bought shares a decade ago, you're likely feeling really good about your investment today.

According to our calculations, a $1000 investment made in November 2014 would be worth $4,891.06, or a 389.11% gain, as of November 11, 2024. Investors should keep in mind that this return excludes dividends but includes price appreciation.

In comparison, the S&P 500 gained 195.07% and the price of gold went up 121.31% over the same time frame.

Analysts are forecasting more upside for TOL too.

Toll Brothers outperformed the industry in the past six-months. Its emphasis on affordable luxury communities, build-to-order model and land acquisition strategies bodes well. The lack of competition in the luxury housing market is a competitive advantage adding to the company’s growth. During third-quarter fiscal 2024, homes delivered increased 11% year over year to 2,814 units. The company is balancing spec and build-to-order methods to fuel growth. This strategy allows it to respond effectively to changes in demand. Owing to solid quarterly results and expectations for the fiscal fourth quarter, TOL raised its full-year guidance for all key home building metrics. Earnings estimates for fiscal 2024 have increased in the past 60 days, depicting analysts' optimism. However, high rates and higher land and labor costs, are raising concern.

Shares have gained 5.16% over the past four weeks and there have been 2 higher earnings estimate revisions for fiscal 2024 compared to none lower. The consensus estimate has moved up as well.