Toll Brothers, Inc. (TOL) Stock Valuation — PE Analysis
Residential Construction · NYSE
Current Price
$133.86
PE Ratio (TTM)
10.7x
Intrinsic Value
$142.11
+5.8% margin of safety
COMPETITIVE MOAT
↑Brand Recognition in Luxury Segment
Toll Brothers has cultivated a strong reputation for building high-quality, luxury homes. This brand equity allows them to command premium pricing and attract discerning buyers.
↑Scale and Land Acquisition Expertise
The company's extensive experience and financial capacity enable it to secure prime land parcels. This scale provides a significant advantage in a fragmented and capital-intensive industry.
↑Diversified Geographic Footprint
Operating across numerous states and markets reduces reliance on any single region. This diversification mitigates localized economic downturns and housing market fluctuations.
INVESTMENT RISKS
↓Economic Sensitivity of Housing Market
The residential construction industry is highly cyclical and sensitive to broader economic conditions. Recessions or significant economic slowdowns can severely impact sales and profitability.
↓Regulatory and Permitting Hurdles
Navigating complex zoning laws, environmental regulations, and lengthy permitting processes can create significant delays and increase development costs.
↓Competition from Other Builders
The homebuilding market is competitive, with numerous national and local builders vying for market share. Intense competition can pressure pricing and margins.
Base case
TOL base case PE valuation
At a current price of $133.86, the base case PE valuation puts TOL fair value near $142.11 per share. That figure assumes 1.9% yearly earnings growth, a target PE multiple of 10.6x, and a 10% discount rate.
Intrinsic Value
$142.11
Margin of safety
+5.8%
Expected annual return
+1.2%
Base case assumptions: 1.9% annual earnings growth, 10.6x target PE, 10% discount rate, 5 year projection. Data as of 2026-10-07.
This base case uses default assumptions and is not financial advice. The fair value changes significantly when the target PE or earnings growth rate changes. Open the calculator to set your own assumptions and see the full sensitivity range.
Customize the TOL PE valuation
Adjust the target PE, earnings growth, and discount rate to see how the fair value and margin of safety for Toll Brothers, Inc. respond.
Open PE Calculator for TOLCompany Overview
Toll Brothers, Inc. (TOL) stands as a prominent luxury homebuilder operating across the United States. The company, along with its various divisions, specializes in the design, construction, marketing, sale, and financing of upscale detached and attached residences within master-planned communities. Its operations are structured into two main divisions: Traditional Home Building and City Living. The latter specifically focuses on developing, constructing, and selling condominiums. Beyond its core homebuilding activities, Toll Brothers diversifies its portfolio by developing and managing golf courses and country clubs, acquiring and divesting land, and constructing, operating, and leasing apartment complexes. It further enhances its offerings by providing a wide array of interior design and finishing selections, encompassing everything from flooring and cabinetry to smart home systems and security features. The firm maintains a vertically integrated structure, with its own operations spanning architectural and engineering services, mortgage and title insurance, smart home technology, landscaping, lumber distribution, and the manufacturing and assembly of various housing components. Its clientele primarily consists of affluent buyers, including those seeking to upgrade their homes, empty-nesters, active adults, and individuals purchasing second homes. Toll Brothers has also forged a strategic alliance with Equity Residential to jointly develop new rental apartment communities across various U.S. markets. Established in 1967, the company's headquarters are situated in Fort Washington, Pennsylvania.
Financial Metrics — TOL PE Stock Valuation Data
PE Ratio (TTM)
10.7x
PEG Ratio
n/m
Earnings Yield
9.43%
ROE (TTM)
14.2%
Revenue/Share (TTM)
$113.36
Dividend Yield
0.76%
Debt/Equity
0.34x
Frequently Asked Questions
What is the PE ratio of TOL?
The trailing twelve-month PE ratio of TOL reflects how much investors pay per dollar of Toll Brothers, Inc.'s earnings. This metric is most useful when compared to Residential Construction peers and the company's own historical range.
Is TOL overvalued based on PE ratio?
TOL's PE of 10.7x combined with a PEG ratio of -1.24 provides a growth-adjusted perspective. TOL has negative earnings, so its PE and PEG ratios are not meaningful here and cannot tell you whether the stock is over or undervalued. Keep in mind that PE-based valuation works best for profitable, mature companies — for high-growth or cyclical Residential Construction, a DCF analysis may be more appropriate.
How do I value TOL stock using PE ratio?
To value Toll Brothers, Inc. using PE: (1) Compare the current PE (10.7x) against the Residential Construction median to assess relative pricing, (2) check the PEG ratio (-1.24) to adjust for growth expectations, (3) review the 5-year PE range to identify where the stock sits historically, and (4) estimate fair value by multiplying a target PE by forward EPS estimates. This relative approach complements DCF's absolute valuation.
What is the PEG ratio of TOL?
TOL's PEG ratio is -1.24, calculated by dividing the PE ratio (10.7x) by the expected earnings growth rate. Because TOL has negative earnings, its PEG ratio is not meaningful and should not be read as a sign of under or overvaluation. Note that PEG accuracy depends on the reliability of growth estimates.
Should I use PE ratio or DCF for TOL stock valuation?
PE ratio gives a quick relative read — how TOL is priced versus Residential Construction peers. DCF provides an absolute value based on projected free cash flows. For the most reliable valuation, use PE as a quick comparability screen and DCF for a deeper fundamental analysis. Each method has blind spots: PE ignores capital structure and cash flow quality, while DCF is sensitive to growth and discount rate assumptions.
Learn More
- See TOL DCF Valuation → — Intrinsic value via Discounted Cash Flow analysis
- PE Methodology — Step-by-step guide to PE ratio stock valuation
- DCF Methodology — Guide to discounted cash flow analysis
- PE Ratio — Understanding the price-to-earnings ratio
- Intrinsic Value — How to evaluate stock fair value
Related PE Valuations
All Consumer Cyclical valuationsP/E and DCF value TOL with different methods and assumptions, so the two conclusions can differ. Compare the DCF intrinsic value.
Price as of 2026-10-07. Financial data from Financial Modeling Prep (trailing twelve months) · Valuation methodology by Charlie Wang.
This is an estimate, not investment advice.