How much a stock's price changes over time is a significant driver for most investors. Not only can price performance impact your portfolio, but it can help you compare investment results across sectors and industries as well.
The fear of missing out, or FOMO, also plays a factor in investing, especially with particular tech giants, as well as popular consumer-facing stocks.
What if you'd invested in Toll Brothers (TOL) 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 the 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 13.7% of fiscal 2024 sales), Mid-Atlantic (13.1%), South (25.7%), Mountain (23.9%) and Pacific (21%).
Since November 2018, the company has started reporting land sale activities under the Land sales and other category (2.6%).
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 the metro-Boston to metro-Washington, D.C. corridor and Atlanta.
At the end of the second quarter of fiscal 2025, Toll Brothers had $2.8 billion of total liquidity, comprising $686.5 million in cash and cash equivalents and $2.19 billion available under the revolver capacity. Also, total debt as of April 31, 2025, was $2.8 billion, down from $2.83 billion at fiscal 2024-end. Debt to capital was 26.1% at the fiscal second-quarter end, down from 27% at the fiscal 2024-end.
Bottom Line
Anyone can invest, but building a successful investment portfolio requires research, patience, and a little bit of risk. So, if you had invested in Toll Brothers, ten years ago, you're likely feeling pretty good about your investment today.
According to our calculations, a $1000 investment made in August 2015 would be worth $3,288.40, or a gain of 228.84%, as of August 15, 2025, and this return excludes dividends but includes price increases.
Compare this to the S&P 500's rally of 209.27% and gold's return of 187.55% over the same time frame.
Analysts are forecasting more upside for TOL too.
Shares of Toll Brothers have underperformed the industry in the past six months. The company has been facing the wrath of continued housing market softness due to declining consumer confidence and affordability concerns. Furthermore, the expected elevation of homebuilding cost structure and supply-chain inefficiencies due to the new tax regime is another prospective concern. Notably, the company's earnings estimates have remained unchanged for fiscal 2025 over the past 60 days, limiting the upside potential of the stock. Nonetheless, Toll Brothers believes that its strategies of increasing the spec production, widening its geographic footprint, price points and product lines, along with focusing on operational and capital efficiency, are boding well for its prospects.
Over the past four weeks, shares have rallied 11.52%, and there have been 1 higher earnings estimate revisions in the past two months for fiscal 2025 compared to none lower. The consensus estimate has moved up as well.
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Toll Brothers Inc. (TOL): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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