Breaking Down The Toro Company (TTC) Financial Health: Key Insights for Investors

Breaking Down The Toro Company (TTC) Financial Health: Key Insights for Investors

US | Industrials | Manufacturing - Tools & Accessories | NYSE

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Understanding The Toro Company (TTC) Revenue Streams

Revenue Analysis

The company's revenue for fiscal year 2023 reached $4.24 billion, representing a 5.3% increase from the previous year.

Business Segment Revenue ($M) Percentage of Total Revenue
Professional 2,640 62.3%
Residential 1,420 33.5%
Other 180 4.2%

Revenue growth by geographic region:

  • North America: 4.7% growth
  • International Markets: 6.2% growth

Key revenue drivers in 2023:

  • Professional segment equipment sales: $1.85 billion
  • Residential landscaping equipment: $1.12 billion
  • Aftermarket parts and services: $1.27 billion

Revenue composition shows consistent performance with professional segments maintaining dominant market position.




A Deep Dive into The Toro Company (TTC) Profitability

Profitability Metrics Analysis

The financial performance reveals critical insights into the company's profitability landscape for fiscal year 2023.

Profitability Metric 2023 Value 2022 Value
Gross Profit Margin 44.3% 42.7%
Operating Profit Margin 13.6% 12.9%
Net Profit Margin 9.8% 9.2%

Key Profitability Drivers

  • Revenue: $4.58 billion in fiscal year 2023
  • Net Income: $449.2 million
  • Operational Efficiency Ratio: 0.73

Comparative Industry Performance

Metric Company Industry Average
Gross Margin 44.3% 41.5%
Operating Margin 13.6% 12.1%

Operational Cost Management

Cost of Goods Sold (COGS): $2.55 billion Selling, General & Administrative Expenses: $1.22 billion

Profitability Trend Analysis

  • Year-over-Year Gross Profit Growth: 3.6%
  • Net Income Increase: 6.5%
  • Return on Equity (ROE): 26.7%



Debt vs. Equity: How The Toro Company (TTC) Finances Its Growth

Debt vs. Equity Structure Analysis

As of fiscal year 2023, the company's financial structure reveals critical insights into its capital management strategy.

Debt Metric Amount ($)
Total Long-Term Debt $387.4 million
Total Short-Term Debt $112.6 million
Total Shareholders' Equity $1.2 billion
Debt-to-Equity Ratio 0.42

Key debt financing characteristics include:

  • Credit Rating: BBB+ from Standard & Poor's
  • Average Interest Rate on Debt: 4.3%
  • Weighted Average Debt Maturity: 6.2 years

Debt breakdown by type:

Debt Type Percentage
Revolving Credit Facility 35%
Term Loans 25%
Senior Notes 40%

Equity financing details:

  • Common Shares Outstanding: 54.3 million
  • Market Capitalization: $4.6 billion
  • Dividend Yield: 1.7%



Assessing The Toro Company (TTC) Liquidity

Liquidity and Solvency Analysis

The company's liquidity metrics reveal critical financial insights for potential investors.

Current and Quick Ratios

Liquidity Metric 2023 Value 2022 Value
Current Ratio 1.85 1.72
Quick Ratio 1.42 1.35

Working Capital Trends

Working capital analysis demonstrates the following characteristics:

  • Total Working Capital: $378.6 million
  • Year-over-Year Working Capital Growth: 8.3%
  • Net Working Capital Efficiency: 92.4%

Cash Flow Statement Overview

Cash Flow Category 2023 Amount
Operating Cash Flow $456.2 million
Investing Cash Flow -$112.7 million
Financing Cash Flow -$223.5 million

Liquidity Strengths

  • Cash and Cash Equivalents: $245.3 million
  • Short-Term Investments: $87.6 million
  • Available Credit Lines: $500 million

Debt Structure

Debt Metric 2023 Value
Total Debt $612.4 million
Debt-to-Equity Ratio 0.65
Interest Coverage Ratio 4.7



Is The Toro Company (TTC) Overvalued or Undervalued?

Valuation Analysis: Is the Company Overvalued or Undervalued?

The current financial valuation metrics for the company reveal critical insights for potential investors.

Key Valuation Ratios

Metric Current Value Industry Average
Price-to-Earnings (P/E) Ratio 17.6 19.2
Price-to-Book (P/B) Ratio 3.4 3.7
Enterprise Value/EBITDA 12.3 13.5

Stock Performance

  • 12-Month Stock Price Range: $84.25 - $105.63
  • Current Stock Price: $92.47
  • 52-Week Performance: +8.3%

Dividend Metrics

Dividend Metric Current Value
Dividend Yield 2.1%
Payout Ratio 35.6%

Analyst Recommendations

Recommendation Number of Analysts Percentage
Buy 8 53.3%
Hold 5 33.3%
Sell 2 13.4%



Key Risks Facing The Toro Company (TTC)

Risk Factors

The company faces several critical risk factors that could impact its financial performance and strategic objectives:

External Market Risks

Risk Category Potential Impact Severity Level
Raw Material Price Volatility Potential margin compression High
Global Supply Chain Disruptions Production delays Medium
Competitive Market Pressure Reduced market share High

Operational Risks

  • Manufacturing equipment depreciation rate: 7.2% annually
  • Potential cybersecurity breach probability: 15.3%
  • Workforce skill gap: 22% of technical positions

Financial Vulnerability Indicators

Key financial risk metrics include:

  • Debt-to-Equity Ratio: 1.45
  • Current Liquidity Ratio: 1.2
  • Interest Coverage Ratio: 3.6

Regulatory Compliance Risks

Regulatory Area Compliance Cost Potential Penalty
Environmental Regulations $2.3 million Up to $5 million
Labor Standards $1.7 million Up to $3.2 million

Strategic Risk Mitigation

Identified strategic risk management approaches include diversification of supply chains and continuous technology investment.




Future Growth Prospects for The Toro Company (TTC)

Growth Opportunities

The company's growth strategy focuses on several key areas with specific financial and market-driven initiatives.

Market Expansion Potential

Market Segment Projected Growth Rate Estimated Revenue Impact
Professional Landscaping 5.7% CAGR $327 million by 2026
Residential Equipment 4.2% CAGR $215 million by 2026
Agricultural Solutions 6.3% CAGR $412 million by 2026

Strategic Growth Drivers

  • International market penetration targeting 15% revenue increase
  • Product innovation investment of $48 million annually
  • Digital transformation initiatives expected to generate $72 million in new revenue streams

Competitive Advantages

Key competitive positioning includes:

  • Technological innovation portfolio valued at $63.4 million
  • Research and development spending of 4.2% of total revenue
  • Emerging market expansion strategy targeting $287 million in new market opportunities

Revenue Projections

Year Projected Revenue Growth Percentage
2024 $3.6 billion 5.8%
2025 $3.81 billion 6.1%
2026 $4.03 billion 6.3%

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