Toll Brothers (TOL): Examining Current Valuation in the Luxury Home Market
Simply Wall St
Sat, November 29, 2025 at 4:08 PM EST
2 min read
In this article:
Toll Brothers (TOL) shares have been active recently, drawing attention from investors interested in the luxury home market. While the company’s performance has shifted over the past year, its portfolio and fundamentals remain key areas to watch.
See our latest analysis for Toll Brothers.
Toll Brothers’ latest share price sits at $139.83, reflecting some ups and downs that echo changing investor sentiment about growth in luxury housing. The stock has notched a year-to-date share price return of 12.3%, although the total shareholder return for the past year remains negative at -14.6%. Still, the company’s remarkable three- and five-year total shareholder returns above 200% show that momentum has historically been a strong force, even as recent gains level off.
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With shares trading about 8% below analyst price targets and an implied 27% discount to intrinsic value, the question is whether Toll Brothers is truly undervalued or if future growth is already factored into the price.
Most Popular Narrative: 6.7% Undervalued
With the most widely followed narrative estimating fair value at $149.94, Toll Brothers’ last close at $139.83 signals the market remains skeptical that recent growth can fully bridge the gap implied by consensus forecasts.
"Demographic tailwinds from affluent Millennials and Gen Z entering peak homebuying years, combined with persistent housing shortages, are creating pent-up demand for larger, luxury homes. This is a core Toll Brothers offering that supports sustained high average selling prices, revenue growth, and pricing power."
Curious how surging demand among affluent younger buyers, faster community expansion, and assumptions about margin growth all fuel this valuation? The real surprises are tucked inside the narrative’s revenue and profit projections. Don’t miss the bold forecasts that drive this optimistic price target.
Result: Fair Value of $149.94 (UNDERVALUED)
Have a read of the narrative in full and understand what's behind the forecasts.
However, rising incentives and heavy reliance on speculative home builds could weigh on profitability if buyer demand unexpectedly weakens.
Find out about the key risks to this Toll Brothers narrative.
Build Your Own Toll Brothers Narrative
If you see things differently, or want to dig into the numbers for yourself, it only takes a few minutes to craft your own story to suit your outlook. Do it your way
Story Continues
A great starting point for your Toll Brothers research is our analysis highlighting 2 key rewards and 1 important warning sign that could impact your investment decision.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
Companies discussed in this article include TOL.
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