Yahoo Finance Are Investors Undervaluing Toll Brothers (TOL) Right Now?
The proven Zacks Rank system focuses on earnings estimates and estimate revisions to find winning stocks. Nevertheless, we know that our readers all have their own perspectives, so we are always looking at the latest trends in value, growth, and momentum to find strong picks.
Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader market. Value investors use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.
Luckily, Zacks has developed its own Style Scores system in an effort to find stocks with specific traits. Value investors will be interested in the system's "Value" category. Stocks with both "A" grades in the Value category and high Zacks Ranks are among the strongest value stocks on the market right now.
Toll Brothers (TOL) is a stock many investors are watching right now. TOL is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock is trading with a P/E ratio of 7.36, which compares to its industry's average of 9.74. Over the past year, TOL's Forward P/E has been as high as 7.40 and as low as 3.80, with a median of 4.82.
TOL is also sporting a PEG ratio of 0.67. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. TOL's PEG compares to its industry's average PEG of 0.84. TOL's PEG has been as high as 0.90 and as low as 0.18, with a median of 0.36, all within the past year.
Another valuation metric that we should highlight is TOL's P/B ratio of 1.05. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. This stock's P/B looks attractive against its industry's average P/B of 1.15. TOL's P/B has been as high as 1.37 and as low as 0.78, with a median of 1.01, over the past year.
Finally, our model also underscores that TOL has a P/CF ratio of 4.68. This data point considers a firm's operating cash flow and is frequently used to find companies that are undervalued when considering their solid cash outlook. This company's current P/CF looks solid when compared to its industry's average P/CF of 4.93. TOL's P/CF has been as high as 8.08 and as low as 3.46, with a median of 5.13, all within the past year.
These are just a handful of the figures considered in Toll Brothers's great Value grade. Still, they help show that the stock is likely being undervalued at the moment. Add this to the strength of its earnings outlook, and we can clearly see that TOL is an impressive value stock right now.
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Toll Brothers Inc. (TOL) : Free Stock Analysis Report
