Toll Brothers, Inc. (TOL)
Quantitative Summary
DeterministicAt 10.5x earnings — a 70% discount to the sector average of 35.0x — TOL is in the lower valuation range. Financial health is average: Piotroski 4/9, Altman Z 4.1. DCF fair value of $112 implies 20% downside based on model assumptions.
Generated deterministically from quant metrics and financial statements. Not a recommendation.
Algorithmic Teardown
AI-GeneratedThe fundamental economics of Toll Brothers, Inc. reveal a company generating returns that marginally underperform its cost of capital, evidenced by an ROIC-WACC spread of -0.3%, which suggests limited value creation efficiency relative to risk. Despite this compression in return on invested capital, the DuPont decomposition highlights robust profitability drivers with net margins at 12.3% and gross margins near 25.1%, though revenue growth has stagnated year-over-year at just 1.1%. Quality metrics present a mixed signal: while the Beneish M-Score of -2.39 indicates low earnings manipulation risk, the Piotroski F-Score of 4/9 points to moderate financial strength with potential weaknesses in balance sheet or profitability trends, and an Altman Z-Score of 4.1 confirms solvency remains within safe boundaries but offers no excess safety margin.
Valuation metrics suggest a significant divergence between current market pricing and intrinsic value models derived from free cash flow assumptions. The stock trades at a P/E multiple of 10.1x, which sits substantially below the sector average of 34.6x yet remains elevated relative to its own five-year historical mean by approximately 42%. This discount appears inconsistent with the DCF fair value assessment of $112, implying current prices embed negative upside potential or a -20.5% downside gap based on an assumed ten-year free cash flow growth rate of 7.8%. The market may be pricing in persistent stagnation rather than recognizing the underlying margin quality, creating a scenario where valuation compression conflicts with historical norms and model-derived fair value estimates.
No specific risk factor deltas, insider trading activity, or Fama-French alpha data were provided to further contextualize the reward profile against these fundamental headwinds and valuation discrepancies. Consequently, the investment case rests entirely on whether the current multiple can compress further toward historical lows or if margin expansion will eventually drive a re-rating that aligns with the implied growth trajectory used in the DCF analysis.
Generated by LLM from quantitative data inputs. May contain inaccuracies. Not investment advice.
DCF Sandbox
Interactive5-year two-stage DCF. Terminal growth 3%. Default sliders match the pre-computed base case. Drag to explore scenarios. Not investment advice.
The growth rate the market implicitly expects over the next 10 years to justify today's price. Compare with historical growth of 1% YoY revenue.
Sensitivity Matrix
| TG ↓ / WACC → | 10.2% | 12.2% | 14.2% |
|---|---|---|---|
| 2% | $133 | $103 | $83 |
| 3% | $149 | $112 | $89 |
| 4% | $169 | $124 | $96 |
Center = base case. Green = >10% upside, Red = >10% downside vs $139.53.
Pre-computed DCF: WACC=12.2%, terminal growth 3%. Fair value $112 (-20.5%). Not investment advice.
Valuation Context
Currently trading 42% above its 5-year average P/E of 7.1x.
Price Chart with Moving Averages
Quant Health Deep Dive
Profitability & Value Creation
✅ Conservative payout — room for dividend increases.
Balance Sheet Health
Earnings Surprise History
EPS estimates vs actuals for the most recent reported quarters. Source: yfinance.
Dividend History
| Date | Amount | Change |
|---|---|---|
| 2026-04-10 | $0.2600 | +4.0% |
| 2026-01-09 | $0.2500 | 0.0% |
| 2025-10-10 | $0.2500 | 0.0% |
| 2025-07-11 | $0.2500 | 0.0% |
| 2025-04-11 | $0.2500 | +8.7% |
| 2025-01-10 | $0.2300 | 0.0% |
| 2024-10-11 | $0.2300 | 0.0% |
| 2024-07-05 | $0.2300 | 0.0% |
| 2024-04-04 | $0.2300 | +9.5% |
| 2024-01-11 | $0.2100 | 0.0% |
| 2023-10-05 | $0.2100 | 0.0% |
| 2023-07-06 | $0.2100 | 0.0% |
Dividend and split data from SEC filings and market data. Amounts are per share, not adjusted for splits. Source: yfinance.
Risk Profile
Sharpe = risk-adjusted return (higher is better). Max drawdown = largest peak-to-trough decline. 1,200+ trading days.
Underwater (Drawdown from Peak)
How far below the all-time high the price has been over time. Deeper = more pain for holders.
Rolling 60-Day Beta vs S&P 500 (VOO)
How the stock's sensitivity to market moves changes over time. β > 1 = more volatile than the market.
Fundamentals
Passive Flow Attribution
ETF Draft EffectWhen investors buy or sell ETFs like XHB or MDYV, the fund manager is mechanically forced to buy or sell TOL shares regardless of Toll Brothers, Inc.'s individual fundamentals. We estimate $886M of passive capital is structurally linked to TOL through 8 tracked ETFs. Passive flows have a limited but growing influence on TOL's daily trading dynamics.
Passive exposure = Σ (ETF AUM × stock weight in ETF) across 8 tracked ETFs. Actual passive ownership is larger (includes mutual funds). Not investment advice.
ETF Contagion Visualizer
Simulate a price drop in Toll Brothers, Inc. to visualize passive redemption contagion across ETFs and collateral stocks.
If Toll Brothers, Inc. (TOL) experiences a significant drawdown, ETF redemptions can create collateral selling pressure on co-held stocks. Our model identifies OWENS CORNING (OC) as the most exposed collateral stock, sharing 3 ETFs with TOL. This is the "Passive Contagion" effect described in the Inelastic Market Hypothesis.
Contagion model based on shared ETF exposure and constituent weights across 14 tracked ETFs. Estimated selling pressure is a simplified model — actual impact depends on market liquidity, ETF redemption mechanics, and market-maker activity.
TOL Ownership Dynamics
Passive funds hold 1 in every 14 TOL shares, reducing daily market volatility.
Toll Brothers, Inc. (TOL) exerts measurable gravity on the passive index market, currently representing 3.3% of the XHB (XHB) and 0.8% of the MDYV (MDYV). Across 14 tracked ETFs, approximately 7M shares (7.2% of float) are held by passive funds and rarely trade on the open market. As passive ownership grows, index inclusion changes may increasingly drive price discovery.
ETFs with Highest TOL Exposure
Float lock-up computed from 14 ETFs tracked by SecuritiesDB. Actual passive ownership is higher (includes mutual funds, pension funds, etc.).
TOL Institutional Volume Profile
252-day volume distribution by price level. The Point of Control (POC) marks — the price where the most institutional volume transacted — an implicit support/resistance floor.
The highest-volume price zone for Toll Brothers, Inc. over the past year sits near $139.45 (16% of 252-day volume). The current price of $139.53 trades 0.1% above this institutional floor — a sign of upside momentum, though a pullback to the POC zone is a common reversion target. The highly concentrated volume profile (16% at POC) indicates strong consensus on fair value — institutional participants have repeatedly transacted near this price.
Volume Profile computed from 252 trading days of OHLCV data. Volume allocated to price bins proportionally based on daily high-low range. Not investment advice.
TOL Capital Efficiency
How efficiently does Toll Brothers, Inc. convert operating profits into free cash? The FCF Conversion ratio measures the gap between accounting earnings and real cash generation.
Toll Brothers, Inc. converts 57% of its EBITDA into free cash flow, a healthy conversion rate indicating efficient capital management — the business generates substantial cash after reinvestment. However, the ROIC-WACC spread is negative (-0.3%), suggesting reinvested capital is destroying shareholder value.
Capital efficiency = Free Cash Flow ÷ EBITDA. Reinvestment = (EBITDA − FCF) ÷ EBITDA. Metrics from latest annual filings. Not investment advice.
Fails-to-Deliver (FTD) History
SEC-reported settlement failures. Elevated FTDs can indicate high short-selling pressure, operational settlement issues, or naked shorting activity.
| Date | Failed Shares | Close Price | Notional Value |
|---|---|---|---|
| 2026-05-08 | 24 | $137.09 | $3,290.16 |
| 2026-04-28 | 27 | $147.36 | $3,978.72 |
| 2026-04-24 | 113 | $149.25 | $16,865.25 |
| 2026-04-10 | 3 | $140.23 | $420.69 |
| 2026-03-31 | 91 | $130.46 | $11,871.86 |
| 2026-03-26 | 41 | $136.91 | $5,613.31 |
| 2026-03-24 | 32 | $137.98 | $4,415.36 |
| 2026-03-13 | 26 | $138.02 | $3,588.52 |
| 2026-02-24 | 9,004 | $158.44 | $1.4M |
| 2026-01-28 | 3,109 | $143.07 | $444,804.63 |
| 2026-01-20 | 100 | $146.68 | $14,668 |
| 2026-01-15 | 31 | $144.92 | $4,492.52 |
| 2026-01-09 | 1,000 | $135.56 | $135,560 |
| 2026-01-08 | 37 | $134.80 | $4,987.6 |
| 2025-12-24 | 90 | $138.29 | $12,446.1 |
| 2025-12-22 | 23 | $139.79 | $3,215.17 |
| 2025-11-17 | 2,149 | $130.34 | $280,100.66 |
| 2025-11-14 | 2,595 | $131.89 | $342,254.55 |
| 2025-11-03 | 1 | $134.95 | $134.95 |
Source: SEC Regulation SHO FTD data. Data is reported with a ~30 day delay. High FTD quantities relative to average daily volume may indicate settlement stress.
Price Correlations
Statistical correlation of daily returns with other stocks. High correlations indicate stocks that move together; negative correlations can offer diversification.
| Peer | 252-Day (1Y) | 126-Day (6M) | Direction |
|---|---|---|---|
| WTGXX | NaN | NaN | |
| PHM | 0.900 | 0.849 | High co-movement |
| MTH | 0.881 | 0.847 | High co-movement |
| TMHC | 0.875 | 0.824 | High co-movement |
| KBH | 0.868 | 0.798 | High co-movement |
| DHI | 0.851 | 0.807 | High co-movement |
| LEN | 0.807 | 0.707 | High co-movement |
| NVR | 0.754 | 0.614 | High co-movement |
| BLDR | 0.743 | 0.727 | High co-movement |
| BLD | 0.732 | 0.733 | High co-movement |
Pearson correlation of daily log returns. 252d ≈ 1 trading year. Computed from price history. Not investment advice.
Compare TOL to Peers
Quant metrics computed deterministically from financial statements and price data. Updated: 2026-06-02.
SecuritiesDB provides programmatic data aggregation for informational purposes only. None of the metrics, summaries, or algorithmic flags constitute a recommendation to buy or sell any security.