Toll Brothers (NYSE:TOL) shares are on the rise today after the luxury homebuilder delivered robust numbers during its first quarter. Revenue increased by 9.6% year-over-year to $1.95 billion, exceeding estimates by $70 million. Similarly, EPS of $2.25 outpaced expectations by $0.47. In comparison, TOL had posted an EPS of $1.70 in the year-ago period.
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In Q1, TOL’s home deliveries increased by 6% to 1,927, and net signed contract value jumped by 42% to $2.06 billion. The company’s number of contracted homes rose by 40% to 2,042 during this period. This uptick in sales was accompanied by a 100 basis point expansion in its home sales gross margin. However, TOL’s backlog value declined by 18% to $7.08 billion in Q1.
Factors such as a robust job market, buoyant consumer sentiment, and lower resale inventory levels are keeping TOL optimistic about new home demand this year. For Fiscal Year 2024, the company expects to deliver 10,000 to 10,500 units at an average price per home of $940,000 to $960,000. EPS for the year is anticipated to be in the range of $13.25 to $13.75. For the upcoming quarter, TOL expects to deliver between 2,400 and 2,500 units.
Is Toll Brothers a Good Stock to Buy?
Today’s price gains come on top of a nearly 86% jump in TOL’s share price over the past year. Overall, the Street has a Moderate Buy consensus rating on Toll Brothers, and the average TOL price target of $110.25 points to a modest 6.5% potential upside in the stock. However, it’s worth noting that estimates will likely change following today’s earnings report.
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