Evaluating Toll Brothers stock fundamentals ahead of earnings
Toll Brothers, Inc. (NYSE:TOL) is one of the largest homebuilders in the United States. Below, we'll be taking a look at how TOL has performed in its most recent quarters, ahead of its next scheduled earnings on Dec. 7.
Toll Brothers has exceeded expectations on three of its four most recent earnings reports. In the fourth quarter of 2019, Toll Brothers stock beat expectations by $0.11. TOL reported an earnings per share (EPS) of $1.41. In the first quarter of 2020, Toll Brothers significantly decreased its reported EPS down to $0.41 and missed expectations by a margin of $0.04. Toll Brothers stock experienced an increase in EPS according to the earnings report for the second quarter of 2020. The company reported an earnings per share of $0.59 for TOL, beating expectations by a margin of $0.14. TOL's most recent quarterly performance report showed another increase in EPS. Toll Brothers reported $0.90 in EPS, beating expectations by $0.19. For its upcoming earnings report, due out next week, Toll Brothers is expected to reported a boost to its EPS for TOL up to $1.23.
So far in 2020, Toll Brothers stock has added 15% and demonstrated a strong recovery from its March lows. Toll Brothers stock is up 256% from its 52-week low of $13.28 and is currently 6% down just from its 52-week high of $50.42.
The fundamental positives for Toll Brothers stock are its price-earnings ratio, book value, and revenue growth. TOL has a price-earnings ratio of 14.20 and a forward price-earnings ratio of 10.85, which are both very promising numbers for potential investors. Toll Brothers stock's price-book value ratio is at 1.28, meaning the company’s market value is nearly the same as its total equity. In addition, Toll Brothers has piled up more than $1 billion in revenue since 2017.
On the flip side, the fundamental negatives for TOL are its declining net income and large debt load. Toll Brothers totes $3.99 billion in total debt and just $559 million in cash. Furthermore, the company has struggled to improve its net profits on an annual basis since 2018. Toll Brothers is pacing to end the current year with less bottom-line profit than it generated in 2017.