For the fiscal 2021 third quarter, ended July 31, revenue at the luxury home builder totaled $2.26 billion, up from $1.65 billion last year. The FactSet analyst consensus called for $2.25 billion in the latest quarter.
Net income surged to $234.9 million, or $1.87 per share, in the latest quarter, up from $114.8 million, or $0.90 per share a year ago. Analysts had predicted $1.54 a share for the latest quarter.
Toll recently traded at $58.50, down 4%. The stock has climbed about 13% in the past six months, as many wealthy consumers have sought new homes during the pandemic.
After Toll’s last earnings report in May, Morningstar analyst Brian Bernard put fair value at $52 for the stock.
He offered a mixed prognosis of the company. “Overall, we think Toll Brothers can capitalize on an improving housing market, and we expect to see stronger earnings growth after the economy normalizes,” he wrote.
“That said, given its luxury build-to-order focus and higher average selling price, we don't think the firm is as well positioned to capture demand from first-time millennial buyers as lower-priced homebuilders like D.R. Horton (DHI) - Get D.R. Horton, Inc. Report.”
Further, “While we think Toll Brothers can achieve positive economic profits with increased sales volume, we expect competition and the company's more capital-intensive land acquisition strategy compared with peers to restrain the amplitude of those profits,” Bernard said.
“However, management is focused on moving to a lighter land strategy.”