In the latest close session, Toll Brothers (TOL) was up +2.63% at $154.98. The stock outperformed the S&P 500, which registered a daily gain of 0.21%. Elsewhere, the Dow gained 1.03%, while the tech-heavy Nasdaq lost 0.22%.
Shares of the home builder witnessed a loss of 8.41% over the previous month, trailing the performance of the Construction sector with its loss of 6.68%, and the S&P 500's gain of 1.7%.
The investment community will be paying close attention to the earnings performance of Toll Brothers in its upcoming release. In that report, analysts expect Toll Brothers to post earnings of $2.9 per share. This would mark a year-over-year decline of 22.25%. Meanwhile, our latest consensus estimate is calling for revenue of $2.6 billion, down 11.81% from the prior-year quarter.
For the entire fiscal year, the Zacks Consensus Estimates are projecting earnings of $12.69 per share and a revenue of $10.7 billion, representing changes of -5.93% and -2.44%, respectively, from the prior year.
Investors should also note any recent changes to analyst estimates for Toll Brothers. Recent revisions tend to reflect the latest near-term business trends. Hence, positive alterations in estimates signify analyst optimism regarding the business and profitability.
Our research suggests that these changes in estimates have a direct relationship with upcoming stock price performance. 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. Within the past 30 days, our consensus EPS projection remained stagnant. Toll Brothers currently has a Zacks Rank of #3 (Hold).
In terms of valuation, Toll Brothers is presently being traded at a Forward P/E ratio of 11.9. Its industry sports an average Forward P/E of 14.5, so one might conclude that Toll Brothers is trading at a discount comparatively.
One should further note that TOL currently holds a PEG ratio of 1.25. The PEG ratio is akin to the commonly utilized P/E ratio, but this measure also incorporates the company's anticipated earnings growth rate. The Building Products - Home Builders was holding an average PEG ratio of 2.85 at yesterday's closing price.
The Building Products - Home Builders industry is part of the Construction sector. With its current Zacks Industry Rank of 154, this industry ranks in the bottom 38% of all industries, numbering over 250.
The strength of our individual industry groups is measured by the Zacks Industry Rank, which is calculated based on the average Zacks Rank of the individual stocks within these 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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Toll Brothers Inc. (TOL): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).