Abstract

Toll Brothers will release its quarterly results on December 08, 2025 Post Market, with investor focus on margins, net profit trajectory, and segment mix amid shifting mortgage rates and demand conditions.

Market Forecast

Consensus expectations for Toll Brothers this quarter point to revenue of USD 32.95 hundred million, EBIT of USD 6.15 hundred million, and adjusted EPS of USD 4.89, with year-over-year forecast growth rates of 03.98%, 04.79%, and 12.95%, respectively. Based on the company’s prior report and mix, the market is watching gross profit margin near the mid-20.00% range, net profit margin around the low-teens, and adjusted EPS expansion driven by price discipline and build-to-order mix, with year-over-year comparisons favorable. The main business of home sales remains the centerpiece, supported by steady backlog conversion and luxury demand resilience. The most promising segment is home sales, with last quarter revenue of USD 28.81 hundred million and year-over-year momentum reflected in unit deliveries and average selling price trends.

Last Quarter Review

Toll Brothers reported last quarter revenue of USD 29.45 hundred million, gross profit margin of 25.99%, GAAP net profit attributable to the parent company of USD 3.70 hundred million, net profit margin of 12.55%, and adjusted EPS of USD 3.73, with year-over-year adjusted EPS growth of 03.61%. A key highlight was sequential net profit growth of 04.87%, supported by disciplined incentive use and normalized build schedules. The main business of home sales generated USD 28.81 hundred million, complemented by land sales revenue of USD 0.64 hundred million, with home sales leading the quarter’s revenue and backlog progression.

Current Quarter Outlook

Home Sales: Pricing Discipline, Backlog Conversion, and Build-to-Order Execution

The home sales segment remains the central driver of Toll Brothers’s quarterly performance, with revenue and earnings closely tied to the pace of backlog conversion, cycle time efficiency, and pricing discipline across luxury communities. For the quarter ending December 08, 2025, expectations imply modest top-line growth and EPS expansion, supported by lower construction cost pressures in select trade categories and measured use of buyer incentives. Community count stability and mix toward higher-margin luxury products should help sustain gross profit margin near the mid-20.00% range, even as regional demand varies with mortgage rate fluctuations. The company’s execution in build-to-order, coupled with tailored design packages and premium locations, provides levers to support average selling prices and margin integrity, creating a constructive setup for EPS delivery relative to forecasts.

Most Promising Business: Luxury Home Sales with ASP and Mix Tailwinds

Luxury home sales stand out as the most promising area, benefiting from favorable household formation at higher income brackets and demand for premium locations, amenities, and personalization. Last quarter’s home sales revenue of USD 28.81 hundred million underlines the segment’s scale, and the current quarter’s forecasts imply continued year-over-year improvement in profitability as mix shifts toward communities with stronger land positioning and amenity packages. While mortgage rates remain an important sensitivity, demand in the luxury category tends to be less rate-constrained than entry-level markets, allowing Toll Brothers to maintain selective pricing power and manage incentives carefully. This dynamic, combined with operational efficiencies and targeted spec strategy where appropriate, positions the segment to sustain margin levels aligned with the forecast EPS trajectory.

Stock Price Drivers This Quarter: Margins, Incentives, and Order Trends

The stock’s performance this quarter will likely hinge on reported gross margin versus expectations, the cadence of incentives, and net order trends including cancellations and backlog conversion. Investors will parse the relationship between mid-20.00% gross margins and the use of financing incentives to gauge sustainability of net profit margin around the low-teens level. A beat on adjusted EPS relative to USD 4.89 would likely require either better-than-modeled gross margins or stronger revenue conversion from backlog, while a miss could stem from heavier incentives or slower cycle times. Commentary on community count changes, land acquisition discipline, and geographic mix will also be pivotal in shaping market views on the path for EBIT and EPS into upcoming quarters.

Analyst Opinions

Recent analyst commentary presents a mixed picture, with the majority leaning cautious to neutral in the near term given valuation and rate sensitivity. CFRA downgraded Toll Brothers to Sell with a USD 110.00 price target, citing a more conservative stance as shares rallied into earnings and potential pressure from incentives. Citi maintained a Hold rating with a USD 147.00 price target, reflecting balanced views on margin resilience versus demand variability. Bank of America Securities reiterated a Buy with a USD 155.00 price target, highlighting execution strength and luxury mix advantages but still mindful of order pacing and rate dynamics. The prevailing tilt is cautious/neutral based on the ratio of downgrades and holds versus buys, and the majority view focuses on risk management rather than aggressive upside calls. Analysts emphasize close monitoring of gross margin sustainability around the mid-20.00% level, EPS delivery near USD 4.89, and the quality of orders and backlog conversion as the key determinants for the quarter’s outcome and stock reaction.