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

Toll Brothers (TOL) closed at $64.31 in the latest trading session, marking a -0.25% move from the prior day. This move lagged the S&P 500's daily gain of 1.32%. Meanwhile, the Dow gained 0.68%, and the Nasdaq, a tech-heavy index, lost 0.15%.

Prior to today's trading, shares of the home builder had gained 7.15% over the past month. This has outpaced the Construction sector's gain of 4.73% and the S&P 500's gain of 3.61% in that time.

Toll Brothers will be looking to display strength as it nears its next earnings release, which is expected to be December 7, 2021. In that report, analysts expect Toll Brothers to post earnings of $2.48 per share. This would mark year-over-year growth of 60%. Meanwhile, our latest consensus estimate is calling for revenue of $2.91 billion, up 14.46% from the prior-year quarter.

Investors might also notice recent changes to analyst estimates for Toll Brothers. These revisions typically reflect the latest short-term business trends, which can change frequently. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

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 0.21% higher. Toll Brothers currently has a Zacks Rank of #2 (Buy).

Looking at its valuation, Toll Brothers is holding a Forward P/E ratio of 7.3. Its industry sports an average Forward P/E of 7.13, so we one might conclude that Toll Brothers is trading at a premium comparatively.

Meanwhile, TOL's PEG ratio is currently 0.19. 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. The Building Products - Home Builders industry currently had an average PEG ratio of 0.33 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 80, putting it in the top 32% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual 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.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.


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