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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
Toll Brothers, Inc. (XNYS:TOL) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
TOL
Name:
TOLL BROTHERS, INC. (XNYS:TOL)
Sector:
- 299173.00K
Industry:
Residential Construction
CEO:
Mr. Douglas Yearley
Total Employees:
5,100
Our Technological Advancement Rating
Our Rating:
A
Technological advancement compared to industry is 68.16% higher
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF TOLL BROTHERS, INC.(TOL) AS PER DATA ANALYSIS OF LAST 3 YEARS AND COMPARISON WITH COMPETITORS/PEERS, AND RESIDENTIAL CONSTRUCTION INDUSTRY. DATE: 07/09/2022
Primary Targets/Price Insights
Previous Close ($) :
43.81
One Month Price Target:
$44.17
Six Month Price Target :
$45.98
Likely Price in One Year's Time:
Ticker:
$48.16
Likely Trading Range Today Under (Normal Volatility)
$43.57
Price Upper limit ($) :
$44.12
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$40.49
This week:
$36.39
This month :
$28.97
Other Primary facts
Market Cap:
4.92B
Market Cap Classification:
Mid Cap
Number of Shares
IPO Date:
113.33M
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
39.06%
-29.27%
Worst Daily Decline:
Our Options Trading Entry Points
Iron Condor entry points for options expiring in 1 week's time
Low risk (<2%) entry points
Buy Call:
Sell Call:
Buy Put:
Sell Put:
$59.20
$52.12
$28.42
$35.50
Medium risk (<10%) entry points
Buy Call
Sell Call
$49.82
Buy Put:
Sell Put:
$48.31
$37.78
$39.31
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
TOL
Sharpe Ratio:
1.96%
Comparison:
TOL, is amongst the top 40% stocks with highest risk-adjusted returns
Sharpe ratio is -21.39% lower than the industry
& is -13.83% lower than the market/S&P 500 average
Average Returns/Yield of
TOL
Daily returns:
0.08%
Weekly returns:
0.41%
Monthly returns:
1.64%
Yearly returns:
23.00%
Comparison of returns:
Average annual returns/yield (last 3 years) is -14.38% below industry average
Classification:
TOL, is amongst the top 40% highest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.8
Statistical test of Returns:
TOL has not yielded statistically significant higher returns when compared to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
3.73%
Weekly Volatility:
8.33%
Monthly Volatility:
16.67%
Yearly Volatility:
57.75%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
1.07%
Volatility in last five trading days has been -71.35% below long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-7.57%
Weekly VaR:
-16.93%
Monthly VaR:
-33.87%
How Much Can the price of
TOL
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-29%
Worst case (decline):
>85%
This translates to price declining to:
$31.10
This translates to price declining to:
$6.57
Severe Crash Probability
Risk of crash in next 6/12 months: High (50-70%)
What is Value at Risk (VaR)?
Risk Fundamentals
TOL is a 139.04% riskier investment compared to the market/S&P 500 & is 104.79% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is 9.20% above industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
TOL
Beta in relation to market/S&P 500--1.48
Expected beta in 1 year's time:
0.824
Expected beta in 3 year's time:
1.165
Unlevered (debt free) Beta:
1.007
Beta in relation to Nasdaq (XNAS):
1.112
Beta in relation to all global stocks::
1.073
Beta Comparison & Analysis
Beta of competitors/peers::
1.439
Beta is 2.61% higher than peers
Average Industry Beta:
1.434
Beta is 2.96% above industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
14.99%
Sustainable growth rate is -46.47% below industry average
Alpha provided | Alpha Analysis
Alpha provided:
0.064
Alpha is -35.86% below industry average alpha yield
Alpha is 410% higher than market/& is unsustainably high
Analysis of Cost of Capital of
TOL
Equity cost of capital:
0.133
Equity cost of capital is 2.24% above industry mean WACC
Unlevered (without debt) cost of capital:
9.05%
Before-tax cost of debt:
-
After-tax cost of debt:
-
Overall debt rating:
-
Weighted average cost of capital (WACC):
-
-
Key Per-Share Metrics & Analysis
Revenue per share:
$62.54
Revenue growth rate per share of (3Y):
0.94
Annual revenue growth rate is 85.20% above the industry average
EPS:
$7.98
Expected Annual growth rate of EPS (3Y):
20.83%
Expected future EPS growth rate is 9.67% higher than the Residential Construction industry
Free cash flow (FCF) per share:
$8.00
Balance sheet equity growth per share: 52.08%
Equity growth rate per share is 35.71% higher than the industry
Debt per share
$28.58
EBITDA per share
$12.14
Valuation Analysis Today of
TOL
P/E Ratio:
5.18
P/E Ratio of Competitors/Peers:
21.04
P/E ratio is -75.38% lower than main peers & is -43.31% lower than the industry
Stock price/value with industry average P/E ratio: $72.89
TOL is -39.90% undervalued if valued using industry average P/E ratio
Share value as per dividend discount (DDM) model: $47.01
Present value of the expected future dividends only: $12.60
P/S (Price to Sales ratio):
0.7
Price to sales ratio is -50.76% below the industry mean
P/B (Price to book value ratio):
0.94
Price to free cash flow: 5.48
-
Net income growth rate (3Y):
36.46%
Net income growth rate is -59.36% lower than the industry average net income growth rate
Dividend Analysis
Dividend payout rate: 2.15%
Dividend yeild: 1.62%
Previous Dividend: $0.20
Previous adjusted dividend: $0.20
Previous Dividend: $0.71
Expected next dividend best case: $0.23
Expected next dividend worst case: $0.17
Average dividend payment (long-term): $0.14
Average dividend increase/decrease (growth rate) % per period: 7.22%
Expected next dividend payment date: 21/07/2022
Expected next dividend record date: 07/07/2022
Expected next dividend declaration date: 06/06/2022
Previous dividend payment date: 22/04/2022
Previous dividend record date: 04/08/2022
Previous dividend declaration date: 03/08/2022
Dividend History:
2022-04-07--$0.20
2021-10-07--$0.17
2021-04-08--$0.17
2022-01-06--$0.17
2021-07-08--$0.17
2021-01-07--$0.11
Dividend growth rate is -56.52% lower than the industry average
In-depth Debt & Leverage Analysis
Debt to equity ratio:
61.63%
Net debt to equity ratio:
48.86%
Debt to assets ratio:
28.71%
Net debt to assets ratio:
22.76%
Debt-to-asset ratio is -28.88% below industry average
Ability to repay debt:
Interest coverage ratio:
-
-
Looking forward:
Debt growth rate:
-64.12%
Annual debt growth is -1607% lower than industry average debt growth rate
Debt repayment rate in last quarter: 0.00%
Analysis of Key Statistics
Correlation of price movement with the market:
0.599
Statistical significance of correlation:
TOL has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.555
Stock price is 8.10% more correlated with the market, compared to the industry average correlation
R Squared (percentage of price movement explained by movement of the market):
0.555
Correlation of price movement with Nasdaq (^IXIC):
-0.001
Covariance of price movement with the market:
-0.002
Kurtosis
24.605
Returns have severe fat-tails (leptokurtic), i.e., returns considerably higher or lower than the mean returns are considerably more likely, compared to assets with normally distributed returns
Skewness of returns:
0.807
Returns are right (positive) skewed; mean returns are greater than median and mode returns
Fundamental Analysis & Dupont Analysis of
TOL
Gross Profit Margin Ratio:
68%
Operating Profit Margin Ratio:
16.57%
Operating profit margin is 22.11% higher than the industry
Net Profit Margin Ratio:
68%
Effective Tax Rate:
24.46%
Effective tax rate is 20.03% higher than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
18.68%
Return on equity (ROE) is -34.57% lower than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
8.70%
Return on assets (ROA) is -41.43% lower than the industry
Financial Leverage:
1.4x
Current Ratio:
5.12
Current ratio is -34.01% below industry average
Cash Conversion Cycle (days):
-16.1
Cash conversion cycle is -189.48% below industry average
The remaining useful life of property plant & equipment is: 8.0 years
Stock based compensation to net income ratio:
1.39%
In-depth Efficiency Analysis
Revenue generated per employee:
1.4M
Each employee generates -16% less revenue than industry average revenue per employee
EBITDA generated per employee:
269.9K
Each employee generates -17% less EBITDA than industry average revenue per employee
Profit generated per employee:
192.5K
Each employee generates -22% less net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
- 58.7K
Each employee generates 131% more free cash flow than industry average revenue per employee
Assets/Capital per employee
195.0K
Each employee generates 131% more free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
-
-
Competitors/Peer firms of
TOL
MACY'S, INC. (XNYS:M)
BRUNSWICK CORPORATION (XNYS:BC)
GILDAN ACTIVEWEAR INC. (XNYS:GIL)
BRIGHT HORIZONS FAMILY SOLUTIONS INC. (XNYS:BFAM)
PLANET FITNESS, INC. (XNYS:PLNT)
WYNDHAM HOTELS & RESORTS, INC. (XNYS:WH)
PVH CORP. (XNYS:PVH)
PENSKE AUTOMOTIVE GROUP, INC. (XNYS:PAG)
AUTONATION, INC. (XNYS:AN)
Current Analyst Ratings
Strong buy�21%
Buy�29%
Hold�38%
Sell�4%
Strong sell�0%
Overall analyst sentiment is: Hold
Income Statement
Period:
TTM
Date:
4/30/22
Revenue:
7.09B
Cost of Revenue:
Gross Profit:
R&D Expense
General & Admin Expenses:
Selling, General & Admin Expenses
Sales and Marketing Expenses
Other Expenses :
Operating Expenses :
Cost & Expenses :
Interest Income:
Interest Expenses:
Depreciation & Amortization:
EBITDA:
Operating Income:
Other Income Expenses:
Income Before Tax:
Income Tax Expense:
Net Income:
Balance Sheet
Date:
Calendar Year:
Period:
Cash & Cash Equivalents:
Short Term Investments:
Cash & Short Term Investments:
Net Receivables:
Inventory:
Other Current Assets:
Total Current Assets:
PP&E:
Goodwill:
Intangible Assets:
Long Term Investments:
Tax Assets:
Other Non-Current Assets:
Total Non-Current Assets:
Other Assets:
Total Assets:
Accounts Payable:
Short Term Debt:
Tax Payables:
Deferred Revenue:
Other Current Liabilities:
Total Current Liabilities:
Long Term Debt:
Other Non-Current Liabilities:
Total Non Current Liabilities:
Other Liabilities:
Total Liabilities:
Common Stock:
Retained Earnings:
Accumulated Other Comprehensive Loss:
Other Total Stockholders' Equity:
Total Stockholders' Equity:
Total Liabilities and Stockholders' Equity:
Total Investments:
Total Debt:
Net Debt:
5.48B
1.61B
-
-
962.62M
-
-
962.62M
2.76M
-
76.61M
1.38B
1.17B
981.76M
1.30B
317.96M
981.76M
Statement of Cash Flow
Date:
Period:
14.68M
Differed Income Tax :
2.41M
Stock Based Compensation :
13.62M
Change in Working Capital :
- 576789.00K
Accounts Receivables:
-
Other Working Capital:
29.54M
Other Non-Cash Items:
113.49M
Net Cash Provided by Operating Activities:
- 280698.00K
Investments in PP&E:
- 18475.00K
Net Acquisitions:
-
Purchases of Investments:
-
Sales/Maturities of Investments:
Other Investing Activities:
Net Cash Used for Investing Activities:
Debt Repayment:
Common Stock Issued:
Common Stock Repurchased:
Dividend Paid:
Other Financing Activities:
Net Cash Used Provided by Financing Activities:
Effect of FOREX on Changes in Cash:
Net Changes in Cash:
Cash at End of Period:
Cash at Beginning of Period:
Operating Cash Flow:
Capital Expenditure:
Free Cash Flow (FCF):
1/31/22
2022
Q1
671.37M
-
671.37M
789.25M
8.58B
244.09M
10.29B
315.10M
-
-
679.64M
-
-
994.74M
-
11.28B
557.27M
-
217.07M
-
1.45B
2.01B
3.24B
-
3.97B
-
5.98B
1.28M
5.10B
5.8M
-
January 31, 2022 at 7:00:00 AM
6.20B
5.26B
11.24B
-
3.24B
2.6B
-
- 43880.00K
- 62355.00K
-
-
-
- 21077.00K
- 595971.00K
- 617048.00K
-
- 960101.00K
724.31M
1.68B
- 280698.00K
- 18475.00K
- 299173.00K
Our Proprietary Portfolio Rating
Our Rating:
B
Price Forecast/Expected Price in Next 5 Years of
TOL
2023
2024
2025
2026
2027
$48.40
$102.55
$112.72
$123.90
$136.19