Shares of Toll Brothers (NYSE:TOL) gained in after-hours trading after the home builder reported earnings for its second quarter of Fiscal Year 2024. Earnings per share came in at $4.55, which beat analysts’ consensus estimate of $4.14 per share. This included a $1.17 per share boost related to the sale of land to a commercial developer. Without this sale, EPS would’ve been $3.38.
In addition, sales increased by 6% year-over-year, with revenue hitting $2.65 billion. This was driven by the delivery of 2,641 homes at an average selling price of $1 million, thanks to what the company called a “resilient economy.” The low supply of houses also helped, as it increased demand for new houses. However, this still missed analysts’ expectations of $2.66 billion.
Furthermore, the firm’s backlog decreased 12% year-over-year to $7.38 billion, while homes in backlog fell 6% to 7,093.
Hedge Fund Confidence Is Negative
When it comes to “smart money,” money managers don’t seem all that confident in TOL stock. Indeed, hedge funds decreased their holdings in the stock by 72,500 shares in the previous quarter as the share price rose. As a result, they have a Negative confidence signal, as indicated by the graphic below.
Is TOL Stock a Buy?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on TOL stock based on seven Buys, three Holds, and two Sells assigned in the past three months, as indicated by the graphic below. After a 103% rally in its share price over the past year, the average TOL price target of $129.60 per share implies that shares are fairly valued. However, it’s worth noting that estimates will likely change following today’s earnings report.
Is TOL the Right Stock to Buy for Passive Income?
Before you hurry to invest in TOL, think about the following:
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