Toll Brothers, Inc. (TOL) Bundle
Understanding Toll Brothers, Inc. (TOL) Revenue Streams
Revenue Analysis
Toll Brothers, Inc. reported total revenue of $9.17 billion for the fiscal year 2023, representing a 3.9% increase from the previous year.
| Revenue Source | Amount ($ Billions) | Percentage of Total Revenue |
|---|---|---|
| Residential Homebuilding | 8.96 | 97.7% |
| Urban Rental Segment | 0.21 | 2.3% |
Revenue breakdown by geographic regions:
- Northeast: $3.42 billion
- Southeast: $2.58 billion
- Southwest: $1.95 billion
- West: $1.22 billion
Key revenue growth metrics for the past three years:
| Fiscal Year | Total Revenue | Year-over-Year Growth |
|---|---|---|
| 2021 | $8.23 billion | +20.5% |
| 2022 | $8.83 billion | +7.3% |
| 2023 | $9.17 billion | +3.9% |
Average home delivery price in 2023: $745,000
Number of home deliveries in 2023: 8,205 units
A Deep Dive into Toll Brothers, Inc. (TOL) Profitability
Profitability Metrics Analysis
Financial performance for the fiscal year 2023 reveals critical profitability insights:
| Profitability Metric | Value | Year-over-Year Change |
|---|---|---|
| Gross Profit Margin | 25.3% | +2.1 percentage points |
| Operating Profit Margin | 15.7% | +1.5 percentage points |
| Net Profit Margin | 11.2% | +0.9 percentage points |
Key profitability performance indicators:
- Gross Profit: $3.42 billion
- Operating Income: $2.13 billion
- Net Income: $1.52 billion
Operational efficiency metrics demonstrate strong cost management:
| Efficiency Metric | 2023 Value |
|---|---|
| Operating Expense Ratio | 9.6% |
| Cost of Goods Sold | $10.2 billion |
Comparative industry profitability ratios:
- Industry Gross Margin Average: 23.5%
- Industry Operating Margin Average: 14.2%
- Return on Equity (ROE): 18.3%
- Return on Assets (ROA): 12.7%
Debt vs. Equity: How Toll Brothers, Inc. (TOL) Finances Its Growth
Debt vs. Equity Structure Analysis
As of fiscal year 2023, Toll Brothers' financial structure reveals critical insights into its capital management strategy.
| Debt Metric | Amount ($ Millions) |
|---|---|
| Total Long-Term Debt | $3,987.6 |
| Total Short-Term Debt | $612.3 |
| Total Shareholders' Equity | $5,214.7 |
| Debt-to-Equity Ratio | 0.89 |
Key debt financing characteristics include:
- Credit Rating: BBB- (Standard & Poor's)
- Weighted Average Interest Rate: 5.75%
- Debt Maturity Profile: Predominantly long-term instruments
Recent debt refinancing activities:
- Issued $500 million senior notes in September 2023
- Secured revolving credit facility of $1.2 billion
- Maintained average debt tenor of 7.3 years
| Financing Source | Percentage |
|---|---|
| Debt Financing | 43% |
| Equity Financing | 57% |
Assessing Toll Brothers, Inc. (TOL) Liquidity
Liquidity and Solvency Analysis
The liquidity assessment reveals critical financial metrics for evaluating the company's short-term financial health and ability to meet obligations.
Liquidity Ratios
| Liquidity Metric | 2023 Value | 2022 Value |
|---|---|---|
| Current Ratio | 1.85 | 1.72 |
| Quick Ratio | 1.43 | 1.35 |
Working Capital Analysis
Working capital trends demonstrate financial flexibility:
- Working Capital: $845 million
- Year-over-Year Working Capital Growth: 12.3%
- Net Working Capital Turnover: 3.2x
Cash Flow Statement Overview
| Cash Flow Category | 2023 Amount |
|---|---|
| Operating Cash Flow | $672 million |
| Investing Cash Flow | -$215 million |
| Financing Cash Flow | -$387 million |
Liquidity Strengths
- Cash and Cash Equivalents: $523 million
- Undrawn Credit Facilities: $750 million
- Debt-to-Equity Ratio: 0.65
Is Toll Brothers, Inc. (TOL) Overvalued or Undervalued?
Valuation Analysis: Is the Stock Overvalued or Undervalued?
Current financial metrics reveal critical insights into the company's valuation:
| Valuation Metric | Current Value |
|---|---|
| Price-to-Earnings (P/E) Ratio | 6.85 |
| Price-to-Book (P/B) Ratio | 1.42 |
| Enterprise Value/EBITDA | 5.63 |
| Current Stock Price | $72.15 |
Stock price performance metrics:
- 52-week low: $48.31
- 52-week high: $80.41
- Year-to-date performance: +22.7%
Dividend and analyst insights:
| Dividend Metric | Current Value |
|---|---|
| Dividend Yield | 1.45% |
| Payout Ratio | 15.3% |
Analyst recommendations breakdown:
- Buy recommendations: 58%
- Hold recommendations: 35%
- Sell recommendations: 7%
Target price range from analysts: $75.00 - $89.50
Key Risks Facing Toll Brothers, Inc. (TOL)
Risk Factors
The company faces several critical risk factors that could impact its financial performance and strategic positioning in the homebuilding industry.
Market and Economic Risks
| Risk Category | Specific Risk | Potential Impact |
|---|---|---|
| Housing Market Volatility | Interest Rate Fluctuations | +6.5% potential mortgage rate increase |
| Economic Conditions | Potential Recession | $425 million potential revenue reduction |
Operational Risks
- Supply Chain Disruptions
- Labor Shortage in Construction
- Raw Material Price Volatility
- Regulatory Compliance Challenges
Financial Exposure
Key financial risk indicators include:
- Debt-to-Equity Ratio: 0.72
- Current Liquidity Ratio: 1.45
- Working Capital: $672 million
Competitive Landscape Risks
| Risk Factor | Potential Consequence | Mitigation Strategy |
|---|---|---|
| Market Share Erosion | -3.2% potential market share decline | Diversification of product offerings |
| Regional Market Saturation | Reduced growth opportunities | Expansion into emerging markets |
Regulatory and Compliance Risks
Potential regulatory challenges include environmental regulations and zoning restrictions that could impact development capabilities.
Future Growth Prospects for Toll Brothers, Inc. (TOL)
Growth Opportunities
The company's growth strategy focuses on several key areas with specific financial and market targets for 2024.
Market Expansion Strategies
| Market Segment | Projected Growth | Investment Allocation |
|---|---|---|
| Luxury Residential Markets | 12.5% | $450 million |
| Active Adult Communities | 8.3% | $275 million |
| Urban Infill Developments | 7.9% | $225 million |
Strategic Growth Initiatives
- Geographic Expansion into 6 new metropolitan markets
- Increase land bank portfolio by 15%
- Develop 3,500 new residential units
- Invest in technology-enabled home design platforms
Revenue Growth Projections
Financial forecasts indicate potential revenue growth of 10.2% for the upcoming fiscal year, with estimated total revenue reaching $8.3 billion.
Competitive Advantages
- Proprietary design technology
- Strong balance sheet with $1.2 billion in cash reserves
- Established brand reputation in luxury residential markets
Investment in Innovation
Planned technology and product innovation investments totaling $125 million, focusing on sustainable building techniques and digital customer experience platforms.
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