Residential Construction · NYSE
Current Price
$139.57
Intrinsic Value
Use the calculator below to estimate
Run a full DCF analysis on Toll Brothers, Inc. with auto-filled fundamentals, adjustable assumptions, and sensitivity heatmap.
Toll Brothers, Inc., together with its subsidiaries, designs, builds, markets, sells, and arranges finance for a range of detached and attached homes in luxury residential communities in the United States. The company operates in two segments, Traditional Home Building and City Living. It also designs, builds, markets, and sells condominiums through Toll Brothers City Living. In addition, the company develops, owns, and operates golf courses and country clubs; develops and sells land; and develops, operates, and rents apartments, as well as provides various interior fit-out options, such as flooring, wall tile, plumbing, cabinets, fixtures, appliances, lighting, and home-automation and security technologies. Further, it owns and operates architectural, engineering, mortgage, title, insurance, smart home technology, landscaping, lumber distribution, house component assembly, and manufacturing operations. The company serves move-up, empty-nester, active-adult, and second-home buyers. It has a strategic partnership with Equity Residential to develop new rental apartment communities in the United States markets. The company was founded in 1967 and is headquartered in Fort Washington, Pennsylvania.
ROIC (TTM)
11.4%
ROE (TTM)
16.9%
FCF Yield
10.99%
Based on trailing twelve-month data, TOL shows a free cash flow per share of N/A and a ROIC of 11.4%, key inputs for stock valuation using the DCF method. The P/FCF ratio of N/A and FCF yield of 10.99% are important context metrics when evaluating TOL's stock valuation relative to peers.
The intrinsic value of TOL depends on assumptions about future growth rate, discount rate (WACC), and terminal value. A DCF model discounts projected free cash flows back to present value — small changes in WACC can shift the estimate by 20% or more, which is why sensitivity analysis is essential.
Whether TOL is undervalued depends on comparing the DCF-derived intrinsic value to the current market price of $139.57. A positive margin of safety (intrinsic value above market price) suggests potential undervaluation, but the degree of confidence depends on the reliability of your growth and discount rate assumptions.
To perform a DCF valuation on Toll Brothers, Inc.: (1) Start with the trailing free cash flow per share as the base, (2) project future FCF growth over 5-10 years based on Residential Construction industry trends and company fundamentals, (3) apply a discount rate (WACC) reflecting TOL's risk profile, and (4) add a terminal value for cash flows beyond the projection period.
DCF (Discounted Cash Flow) estimates what a company is worth today based on its future cash generation. For Toll Brothers, Inc., this means projecting how much free cash flow the Residential Construction will produce over the next 5-10 years, then discounting those amounts to today's dollars. TOL's ROIC of 11.4% shows moderate capital returns.
WACC (Weighted Average Cost of Capital) is the discount rate in a DCF model — it reflects the minimum return investors require. For TOL, the capital structure and equity risk premium determine WACC. A 1% increase in WACC typically reduces the intrinsic value by 10-15%.
