Morningstar Rating

Stock Research and Analysis

by Keith Schoonmaker, CFA

Bulls Say

The current cyclical housing rebound is likely to prove stronger than most expect, given pent-up demand from household formations, aging of Millennials into their prime home buying years, and still-supportive affordability.
Toll Brothers is positioned well within the luxury end of the housing market, where buyers exhibit greater financial health and lower price elasticity and public competition is more limited.
Toll Brothers' ventures in City Living and Apartment Living will help the firm take advantage of greater growth opportunities in multifamily living and help smooth out earnings. Read more 

Bears Say

Although Toll's margins rank among the industry's best, capital intensity associated with its business model is very high, leading to pedestrian returns on invested capital.
Toll Brothers' recent ventures in City Living and Apartment Living raise the risk profile for a firm that already scores very high on structural capital intensity.
It is becoming increasingly difficult to source land "on the corner of Main and Main," given a shortage of large tracts of undeveloped land and an increasingly cumbersome land permitting process. Read more 


Brothers Bob and Bruce Toll founded Toll Brothers in 1967. Bob Toll, 74, was CEO from inception until June 2010, when he handed the reins to Douglas Yearley. Bob Toll remains executive chairman of the board and has gradually handed more of the day-to-day   Read more 


Toll Brothers, with headquarters in Horsham, Pennsylvania, is a homebuilder targeting the move-up, active adult, second home, and luxury buyer with a $725,000 average price   Read more 

Week Ahead: Will Housing Build on Its Momentum? 
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