Intrinsic value of Toll Brothers - TOL

Previous Close

$34.11

  Intrinsic Value

$91.56

stock screener

  Rating & Target

str. buy

+168%

Previous close

$34.11

 
Intrinsic value

$91.56

 
Up/down potential

+168%

 
Rating

str. buy

We calculate the intrinsic value of TOL stock by summing up the current values of future distributable cash flows generated by the company and dividing the sum by the number of outstanding shares. As such, the intrinsic value calculation depends entirely on projections. The more accurate your projections of the company's performance are - the more reliable is the intrinsic value calculation result. Please make sure to check the stock valuation input data below and adjust it if necessary. The quality of the output (intrinsic valuation result) is only as good as the quality of the input. See also DISCLAIMERS.

STOCK VALUATION INPUT DATA

Revenue (in 2017), $M
Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Variable cost ratio, %
Fixed operating expenses, $M
Interest rate on debt, %
Effective corporate tax rate, %
Production assets / Revenue, %
Life of production assets, yrs
Working capital / Revenue, %
Revenue / Adjusted assets
Adjusted equity ratio
Cash flow adjustment, % of Revenue
Book value of equity, $M
Shares outstanding, mln
Market capitalization, $bln 5.5

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
   2018
   2019
   2020
   2021
   2022
   2023
   2024
   2025
   2026
   2027
   2028
   2029
   2030
   2031
   2032
   2033
   2034
   2035
   2036
   2037
   2038
   2039
   2040
   2041
   2042
   2043
   2044
   2045
   2046
   2047

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  12.50
  11.75
  11.08
  10.47
  9.92
  9.43
  8.99
  8.59
  8.23
  7.91
  7.62
  7.35
  7.12
  6.91
  6.72
  6.54
  6.39
  6.25
  6.13
  6.01
  5.91
  5.82
  5.74
  5.66
  5.60
  5.54
  5.48
  5.44
  5.39
  5.35
Revenue, $m
  6,542
  7,311
  8,120
  8,970
  9,860
  10,790
  11,759
  12,769
  13,820
  14,912
  16,048
  17,228
  18,454
  19,729
  21,054
  22,432
  23,865
  25,357
  26,910
  28,528
  30,215
  31,973
  33,808
  35,723
  37,723
  39,812
  41,996
  44,279
  46,667
  49,165
Variable operating expenses, $m
  4,968
  5,549
  6,160
  6,802
  7,475
  8,177
  8,909
  9,672
  10,465
  11,290
  12,121
  13,012
  13,938
  14,901
  15,901
  16,942
  18,025
  19,151
  20,324
  21,546
  22,820
  24,149
  25,534
  26,981
  28,491
  30,069
  31,718
  33,443
  35,246
  37,133
Fixed operating expenses, $m
  784
  801
  819
  837
  855
  874
  893
  913
  933
  953
  974
  996
  1,018
  1,040
  1,063
  1,086
  1,110
  1,135
  1,160
  1,185
  1,211
  1,238
  1,265
  1,293
  1,322
  1,351
  1,380
  1,411
  1,442
  1,473
Total operating expenses, $m
  5,752
  6,350
  6,979
  7,639
  8,330
  9,051
  9,802
  10,585
  11,398
  12,243
  13,095
  14,008
  14,956
  15,941
  16,964
  18,028
  19,135
  20,286
  21,484
  22,731
  24,031
  25,387
  26,799
  28,274
  29,813
  31,420
  33,098
  34,854
  36,688
  38,606
Operating income, $m
  790
  960
  1,141
  1,331
  1,530
  1,739
  1,957
  2,185
  2,422
  2,669
  2,953
  3,220
  3,499
  3,788
  4,089
  4,403
  4,730
  5,071
  5,426
  5,796
  6,183
  6,587
  7,009
  7,449
  7,910
  8,393
  8,897
  9,426
  9,979
  10,559
EBITDA, $m
  1,927
  2,229
  2,546
  2,881
  3,231
  3,598
  3,980
  4,379
  4,794
  5,227
  5,676
  6,144
  6,630
  7,136
  7,662
  8,210
  8,780
  9,374
  9,993
  10,638
  11,311
  12,013
  12,746
  13,512
  14,312
  15,149
  16,024
  16,940
  17,898
  18,902
Interest expense (income), $m
  22
  33
  36
  39
  42
  45
  48
  52
  55
  59
  63
  67
  71
  75
  80
  85
  90
  95
  100
  105
  111
  117
  123
  130
  137
  144
  151
  159
  167
  175
  184
Earnings before tax, $m
  756
  925
  1,102
  1,289
  1,485
  1,691
  1,905
  2,129
  2,363
  2,606
  2,886
  3,149
  3,423
  3,708
  4,005
  4,314
  4,635
  4,971
  5,320
  5,685
  6,066
  6,463
  6,879
  7,313
  7,767
  8,242
  8,738
  9,259
  9,804
  10,374
Tax expense, $m
  204
  250
  298
  348
  401
  457
  514
  575
  638
  704
  779
  850
  924
  1,001
  1,081
  1,165
  1,252
  1,342
  1,437
  1,535
  1,638
  1,745
  1,857
  1,974
  2,097
  2,225
  2,359
  2,500
  2,647
  2,801
Net income, $m
  552
  675
  805
  941
  1,084
  1,234
  1,391
  1,554
  1,725
  1,902
  2,107
  2,299
  2,499
  2,707
  2,923
  3,149
  3,384
  3,629
  3,884
  4,150
  4,428
  4,718
  5,021
  5,338
  5,670
  6,016
  6,379
  6,759
  7,157
  7,573

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total assets, $m
  -2,712
  -3,031
  -3,367
  -3,719
  -4,088
  -4,473
  -4,875
  -5,294
  -5,730
  -6,183
  -6,653
  -7,143
  -7,651
  -8,179
  -8,729
  -9,300
  -9,894
  -10,513
  -11,157
  -11,828
  -12,527
  -13,256
  -14,017
  -14,811
  -15,640
  -16,506
  -17,411
  -18,358
  -19,348
  -20,383
Adjusted assets (=assets-cash), $m
  -2,712
  -3,031
  -3,367
  -3,719
  -4,088
  -4,473
  -4,875
  -5,294
  -5,730
  -6,183
  -6,653
  -7,143
  -7,651
  -8,179
  -8,729
  -9,300
  -9,894
  -10,513
  -11,157
  -11,828
  -12,527
  -13,256
  -14,017
  -14,811
  -15,640
  -16,506
  -17,411
  -18,358
  -19,348
  -20,383
Revenue / Adjusted assets
  -2.412
  -2.412
  -2.412
  -2.412
  -2.412
  -2.412
  -2.412
  -2.412
  -2.412
  -2.412
  -2.412
  -2.412
  -2.412
  -2.412
  -2.412
  -2.412
  -2.412
  -2.412
  -2.412
  -2.412
  -2.412
  -2.412
  -2.412
  -2.412
  -2.412
  -2.412
  -2.412
  -2.412
  -2.412
  -2.412
Average production assets, $m
  11,102
  12,406
  13,780
  15,222
  16,733
  18,310
  19,956
  21,669
  23,452
  25,306
  27,233
  29,236
  31,317
  33,480
  35,728
  38,066
  40,499
  43,030
  45,666
  48,412
  51,274
  54,259
  57,372
  60,622
  64,016
  67,562
  71,267
  75,141
  79,193
  83,433
Working capital, $m
  -5,521
  -6,170
  -6,853
  -7,571
  -8,322
  -9,107
  -9,925
  -10,777
  -11,664
  -12,586
  -13,544
  -14,540
  -15,575
  -16,651
  -17,769
  -18,932
  -20,142
  -21,401
  -22,712
  -24,078
  -25,501
  -26,986
  -28,534
  -30,150
  -31,838
  -33,602
  -35,445
  -37,371
  -39,387
  -41,495
Total debt, $m
  666
  719
  774
  832
  893
  957
  1,023
  1,092
  1,164
  1,239
  1,316
  1,397
  1,481
  1,568
  1,659
  1,753
  1,851
  1,953
  2,060
  2,170
  2,286
  2,406
  2,531
  2,662
  2,799
  2,942
  3,092
  3,248
  3,411
  3,582
Total liabilities, $m
  448
  500
  555
  614
  675
  738
  804
  874
  945
  1,020
  1,098
  1,179
  1,262
  1,350
  1,440
  1,535
  1,633
  1,735
  1,841
  1,952
  2,067
  2,187
  2,313
  2,444
  2,581
  2,723
  2,873
  3,029
  3,192
  3,363
Total equity, $m
  -3,160
  -3,531
  -3,922
  -4,333
  -4,762
  -5,211
  -5,680
  -6,167
  -6,675
  -7,203
  -7,751
  -8,321
  -8,913
  -9,529
  -10,169
  -10,835
  -11,527
  -12,247
  -12,998
  -13,779
  -14,594
  -15,443
  -16,329
  -17,254
  -18,220
  -19,229
  -20,284
  -21,387
  -22,540
  -23,747
Total liabilities and equity, $m
  -2,712
  -3,031
  -3,367
  -3,719
  -4,087
  -4,473
  -4,876
  -5,293
  -5,730
  -6,183
  -6,653
  -7,142
  -7,651
  -8,179
  -8,729
  -9,300
  -9,894
  -10,512
  -11,157
  -11,827
  -12,527
  -13,256
  -14,016
  -14,810
  -15,639
  -16,506
  -17,411
  -18,358
  -19,348
  -20,384
Debt-to-equity ratio
  0.000
  0.000
  0.000
  0.000
  0.000
  0.000
  0.000
  0.000
  0.000
  0.000
  0.000
  0.000
  0.000
  0.000
  0.000
  0.000
  0.000
  0.000
  0.000
  0.000
  0.000
  0.000
  0.000
  0.000
  0.000
  0.000
  0.000
  0.000
  0.000
  0.000
Adjusted equity ratio
  1.165
  1.165
  1.165
  1.165
  1.165
  1.165
  1.165
  1.165
  1.165
  1.165
  1.165
  1.165
  1.165
  1.165
  1.165
  1.165
  1.165
  1.165
  1.165
  1.165
  1.165
  1.165
  1.165
  1.165
  1.165
  1.165
  1.165
  1.165
  1.165
  1.165

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  552
  675
  805
  941
  1,084
  1,234
  1,391
  1,554
  1,725
  1,902
  2,107
  2,299
  2,499
  2,707
  2,923
  3,149
  3,384
  3,629
  3,884
  4,150
  4,428
  4,718
  5,021
  5,338
  5,670
  6,016
  6,379
  6,759
  7,157
  7,573
Depreciation, amort., depletion, $m
  1,138
  1,268
  1,405
  1,550
  1,701
  1,859
  2,023
  2,194
  2,373
  2,558
  2,723
  2,924
  3,132
  3,348
  3,573
  3,807
  4,050
  4,303
  4,567
  4,841
  5,127
  5,426
  5,737
  6,062
  6,402
  6,756
  7,127
  7,514
  7,919
  8,343
Funds from operations, $m
  1,690
  1,943
  2,210
  2,491
  2,785
  3,093
  3,414
  3,749
  4,097
  4,460
  4,830
  5,223
  5,631
  6,055
  6,496
  6,956
  7,434
  7,932
  8,451
  8,991
  9,556
  10,144
  10,759
  11,401
  12,071
  12,772
  13,506
  14,273
  15,076
  15,917
Change in working capital, $m
  -613
  -649
  -683
  -717
  -751
  -785
  -818
  -852
  -887
  -922
  -958
  -996
  -1,035
  -1,076
  -1,118
  -1,163
  -1,210
  -1,259
  -1,311
  -1,366
  -1,423
  -1,484
  -1,549
  -1,616
  -1,688
  -1,763
  -1,843
  -1,927
  -2,015
  -2,108
Cash from operations, $m
  2,303
  2,592
  2,893
  3,208
  3,536
  3,877
  4,232
  4,601
  4,984
  5,382
  5,789
  6,219
  6,666
  7,131
  7,615
  8,118
  8,643
  9,191
  9,762
  10,357
  10,979
  11,628
  12,307
  13,017
  13,759
  14,536
  15,349
  16,200
  17,091
  18,025
Maintenance CAPEX, $m
  -987
  -1,110
  -1,241
  -1,378
  -1,522
  -1,673
  -1,831
  -1,996
  -2,167
  -2,345
  -2,531
  -2,723
  -2,924
  -3,132
  -3,348
  -3,573
  -3,807
  -4,050
  -4,303
  -4,567
  -4,841
  -5,127
  -5,426
  -5,737
  -6,062
  -6,402
  -6,756
  -7,127
  -7,514
  -7,919
New CAPEX, $m
  -1,232
  -1,304
  -1,374
  -1,442
  -1,510
  -1,578
  -1,645
  -1,714
  -1,783
  -1,854
  -1,927
  -2,003
  -2,081
  -2,163
  -2,248
  -2,338
  -2,432
  -2,531
  -2,636
  -2,746
  -2,862
  -2,984
  -3,114
  -3,250
  -3,394
  -3,545
  -3,705
  -3,874
  -4,052
  -4,239
Cash from investing activities, $m
  -2,219
  -2,414
  -2,615
  -2,820
  -3,032
  -3,251
  -3,476
  -3,710
  -3,950
  -4,199
  -4,458
  -4,726
  -5,005
  -5,295
  -5,596
  -5,911
  -6,239
  -6,581
  -6,939
  -7,313
  -7,703
  -8,111
  -8,540
  -8,987
  -9,456
  -9,947
  -10,461
  -11,001
  -11,566
  -12,158
Free cash flow, $m
  84
  177
  279
  388
  504
  627
  756
  892
  1,034
  1,183
  1,331
  1,493
  1,661
  1,836
  2,018
  2,208
  2,404
  2,609
  2,823
  3,045
  3,276
  3,517
  3,768
  4,030
  4,303
  4,589
  4,887
  5,199
  5,525
  5,866
Issuance/(repayment) of debt, $m
  50
  53
  55
  58
  61
  64
  66
  69
  72
  75
  78
  81
  84
  87
  91
  94
  98
  102
  106
  111
  115
  120
  126
  131
  137
  143
  149
  156
  163
  171
Issuance/(repurchase) of shares, $m
  -350
  -371
  -391
  -411
  -430
  -449
  -468
  -488
  -507
  -528
  -548
  -570
  -592
  -616
  -640
  -665
  -692
  -721
  -750
  -782
  -815
  -849
  -886
  -925
  -966
  -1,009
  -1,055
  -1,103
  -1,153
  -1,207
Cash from financing (excl. dividends), $m  
  -300
  -318
  -336
  -353
  -369
  -385
  -402
  -419
  -435
  -453
  -470
  -489
  -508
  -529
  -549
  -571
  -594
  -619
  -644
  -671
  -700
  -729
  -760
  -794
  -829
  -866
  -906
  -947
  -990
  -1,036
Total cash flow (excl. dividends), $m
  -216
  -142
  -57
  35
  135
  241
  354
  473
  599
  730
  860
  1,003
  1,152
  1,308
  1,469
  1,636
  1,810
  1,991
  2,179
  2,374
  2,576
  2,787
  3,007
  3,236
  3,474
  3,723
  3,982
  4,252
  4,535
  4,831
Retained Cash Flow (-), $m
  350
  371
  391
  411
  430
  449
  468
  488
  507
  528
  548
  570
  592
  616
  640
  665
  692
  721
  750
  782
  815
  849
  886
  925
  966
  1,009
  1,055
  1,103
  1,153
  1,207
Prev. year cash balance distribution, $m
  2,809
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash flow adjustment, $m
  23
  0
  0
  32
  36
  39
  43
  47
  51
  55
  60
  64
  69
  74
  79
  84
  90
  95
  101
  108
  114
  121
  128
  135
  143
  151
  159
  168
  177
  187
Cash available for distribution, $m
  2,943
  371
  391
  446
  565
  690
  822
  961
  1,106
  1,258
  1,409
  1,573
  1,745
  1,923
  2,109
  2,302
  2,503
  2,711
  2,929
  3,155
  3,391
  3,637
  3,893
  4,161
  4,440
  4,732
  5,036
  5,355
  5,688
  6,037
Discount rate, %
  4.30
  4.52
  4.74
  4.98
  5.23
  5.49
  5.76
  6.05
  6.35
  6.67
  7.00
  7.35
  7.72
  8.11
  8.51
  8.94
  9.39
  9.86
  10.35
  10.87
  11.41
  11.98
  12.58
  13.21
  13.87
  14.56
  15.29
  16.05
  16.86
  17.70
PV of cash for distribution, $m
  2,822
  340
  340
  367
  438
  501
  556
  601
  635
  659
  669
  671
  663
  646
  619
  585
  545
  499
  451
  401
  351
  302
  255
  212
  173
  138
  108
  83
  62
  45
Current shareholders' claim on cash, %
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0

Toll Brothers, Inc. is engaged in designing, building, marketing, selling and arranging financing for detached and attached homes in luxury residential communities. The Company operates through two segments: Traditional Home Building and Toll Brothers City Living (City Living). Within the Traditional Home Building segment, it operates in five geographic segments in the United States: the North, consisting of Connecticut, Illinois, Massachusetts, Michigan, Minnesota, New Jersey and New York; the Mid-Atlantic, consisting of Delaware, Maryland, Pennsylvania and Virginia; the South, consisting of Florida, North Carolina and Texas; the West, consisting of Arizona, Colorado, Nevada and Washington, and California. City Living is the Company's urban development division. Its products include Traditional Home Building Product and City Living Product. Its Traditional Home Building Product includes detached homes, move-up, executive, estate, and active-adult and age-qualified lines of home.

FINANCIAL RATIOS  of  Toll Brothers (TOL)

Valuation Ratios
P/E Ratio 10
Price to Sales 0.9
Price to Book 1.2
Price to Tangible Book
Price to Cash Flow 5.6
Price to Free Cash Flow 5.8
Growth Rates
Sales Growth Rate 12.5%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 3.6%
Cap. Spend. - 3 Yr. Gr. Rate 14.1%
Financial Strength
Quick Ratio NaN
Current Ratio NaN
LT Debt to Equity 71.1%
Total Debt to Equity 71.1%
Interest Coverage 38
Management Effectiveness
Return On Assets 5.7%
Ret/ On Assets - 3 Yr. Avg. 4.7%
Return On Total Capital 6.8%
Ret/ On T. Cap. - 3 Yr. Avg. 5.4%
Return On Equity 12.2%
Return On Equity - 3 Yr. Avg. 10.1%
Asset Turnover 0.6
Profitability Ratios
Gross Margin 21.5%
Gross Margin - 3 Yr. Avg. 21%
EBITDA Margin 14.8%
EBITDA Margin - 3 Yr. Avg. 13.6%
Operating Margin 11.1%
Oper. Margin - 3 Yr. Avg. 10.4%
Pre-Tax Margin 14%
Pre-Tax Margin - 3 Yr. Avg. 12.7%
Net Profit Margin 9.2%
Net Profit Margin - 3 Yr. Avg. 8.4%
Effective Tax Rate 34.2%
Eff/ Tax Rate - 3 Yr. Avg. 33.9%
Payout Ratio 7.3%

TOL stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the TOL stock intrinsic value calculation we used $5815 million for the last fiscal year's total revenue generated by Toll Brothers. The default revenue input number comes from 2017 income statement of Toll Brothers. You may change it if you feel that it should be adjusted for some unusual circumstances that are not expected to be repeated in the future or if you already know (from interim financial statements, for example) that this year's revenue is going to be quite different.

Revenue growth rate. Forecasted future revenue growth rate is the most important input parameter for the intrinsic value calculation. Unlike other input parameters that are reasonably expected to be in line with their historic averages or their historic trends, the revenue growth rate by and large is a wild card: nobody really knows what the company's revenue will be in the future. Of course, the level of unpredictability is different for different industries (utility companies being the most predictable and, thus, less risky).
    We use three input parameters to forecast the revenue growth rate in our TOL stock valuation model: a) initial revenue growth rate of 12.5% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 4.3%, whose default value for TOL is calculated based on our internal credit rating of Toll Brothers, is applied to the cash flow expected to be received a year from now (well, actually, to be precise, in the financial year following the base year - the last year for which we have financial statements). For each consecutive year the discount rate is multiplied by the discount rate multiplier of 1.05, e.i. each year it increases by 5%. Feel free to change this number to correspond to your level of risk assessment of Toll Brothers.
    By the way, it is easy to set the discount rate to be constant (this would make comparison with other valuation models easier): just set the discount rate multiplier equal to 1 and chose the magnitude of the initial discount rate to your liking.

Variable cost ratio is the ratio of variable costs (i.e. costs that fluctuate with fluctuation of the volume of production) to the revenue expressed as a percentage. In the calculation of intrinsic value of TOL stock the variable cost ratio is equal to 76%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $767 million in the base year in the intrinsic value calculation for TOL stock. These expenses increase with the level of inflation in subsequent years.

Interest rate on debt is the average all-in rate of interest paid by the company on its debt. It is set at 5.4% for Toll Brothers.

Corporate tax rate of 27% is the nominal tax rate for Toll Brothers. In reality, companies find ways to pay much less taxes than that or not to pay them at all.

Cash flow adjustment could be used for any adjustment the investor deems necessary. Most commonly we use this field to account for stock options-related effects in excess of what is reported on the company's income statement. The cash flow adjustment is expressed as a percentage of the revenue, and in the current valuation of the TOL stock is equal to 0.4%.

Production assets are the company's assets used for manufacturing products or provision of services. In the valuation model input table they are expressed as a percentage of revenue and for TOL are equal to 169.7%.

Life of production assets of 10 years is the average useful life of capital assets used in Toll Brothers operations. It is used to calculate yearly capital expenditures needed to keep these assets in good order - we call it the maintenance CAPEX.

Working capital is the difference between the company's current assets and liabilities. In the model we use the ratio of working capital to revenue, which for TOL is equal to -84.4%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $0 million for Toll Brothers - is used in calculation of the "floor" for intrinsic valuation based on the discounted cash flow (DCF) method. Even if the prospects are very bad for a company, its assets could always be sold now for their current fair market value.

Shares outstanding of 162 million for Toll Brothers is needed to calculate the intrinsic value of one share.

Market capitalization is used here only for reference purposes and as a quick check that the share price and the number of shares outstanding numbers are correct - something especially to be cognizant about at stock splits. So, the market capitalization of Toll Brothers at the current share price and the inputted number of shares is $5.5 billion.

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TMHC Taylor Morriso 19.10 54.37  str.buy
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LEN Lennar Cl A 50.48 113.93  str.buy
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COMPANY NEWS

▶ First Look at Toll Brothers' 319-unit apartment project in West Midtown   [Aug-08-18 01:03PM  American City Business Journals]
▶ Three options strategies for the week: July 6   [Aug-06-18 09:28AM  CNBC]
▶ Rising Costs Shouldn't Deter Homebuilders   [06:33AM  Morningstar]
▶ What a housing slowdown means in a strong economy   [Jul-27-18 01:06PM  Yahoo Finance Video]
▶ Pennsylvania builder tees up 2,200 homes in Surprise development   [Jul-24-18 11:00PM  American City Business Journals]
▶ These are the best (and worst) places to retire   [Jul-12-18 01:23PM  Yahoo Finance Video]
▶ [$$] A Bargain Play on Luxury Real Estate   [Jul-06-18 05:45PM  Barrons.com]
▶ Toll Brothers Announces Cash Dividend   [Jun-19-18 05:05PM  GlobeNewswire]
▶ 3 Stocks That Could Double Your Money   [Jun-15-18 08:19PM  Motley Fool]
▶ Stocks mixed, Trump reaches deal on ZTE   [Jun-07-18 11:32AM  Yahoo Finance]
▶ Yahoo Finance Live: Midday Movers - Jun 7th, 2018   [09:40AM  Yahoo Finance Video]
▶ A Six-Pack Of Homebuilding Buys   [10:18AM  Forbes]
▶ [$$] Toll Brothers Shares Slide, Hurt by Weak Results   [01:00AM  The Wall Street Journal]
▶ [$$] Toll Brothers Shares Slide, Hurt by Weak Results   [May-22-18 06:19PM  The Wall Street Journal]
▶ Toll Brothers Shares Slide, Hurt by Weak Results   [05:54PM  The Wall Street Journal]
▶ [$$] Toll Brothers Profit Falls on Higher Charges   [07:16AM  The Wall Street Journal]
▶ Toll Brothers: Fiscal 2Q Earnings Snapshot   [05:17AM  Associated Press]
▶ Economist: red-hot housing market not sustainable   [10:19AM  Yahoo Finance Video]
▶ 3 Charts That Suggest Homebuilder Stocks Are Set to Drop   [May-16-18 07:47AM  Investopedia]
▶ Estimating The Fair Value Of Toll Brothers Inc (NYSE:TOL)   [May-12-18 03:47PM  Simply Wall St.]
▶ Optimism among builders slides for fourth consecutive month   [Apr-16-18 10:44AM  Associated Press]
▶ For millennialls, heres how social media is boosting home sales   [Apr-13-18 11:01AM  Yahoo Finance Video]
▶ Yahoo Finance Live: Market Movers - Apr 13, 2018   [07:20AM  Yahoo Finance Video]
▶ Trending: Soybean Prices Whipsaw on Trade War Fears   [Apr-12-18 08:00AM  ETF Database]
▶ Edited Transcript of TOL presentation 6-Mar-17 4:35pm GMT   [Apr-10-18 01:23PM  Thomson Reuters StreetEvents]
▶ Loudoun's aversion to new single-family homes driving surge in this type of housing   [Apr-06-18 11:20AM  American City Business Journals]
▶ 3 Charts That Suggest Homebuilders Are Set to Move Higher   [Mar-14-18 08:56AM  Investopedia]
▶ Toll Brothers Announces Cash Dividend   [05:12PM  GlobeNewswire]
▶ Viewpoint: It's about time D.C.'s development wave hit Sursum Corda   [11:50AM  American City Business Journals]
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