Toll Brothers to Report Q1 Earnings: Here's What Investors Must Expect

Toll Brothers, Inc. TOL is scheduled to report its first-quarter fiscal 2026 results on Feb. 17, after market close.In the last reported quarter, the company’s adjusted earnings missed the Zacks Consensus Estimate by 5.9% and declined 1.1% year over year. Conversely, the total revenues topped the consensus mark by 3% and increased 2.7% from the prior year.TOL’s earnings surpassed estimates in two of the trailing four quarters and missed on the remaining two occasions, with an average surprise of 2.1%.How are Estimates Placed for TOL Stock?The Zacks Consensus Estimate for fiscal first-quarter earnings per share (EPS) has moved north to $2.05 from $1.93 in the past 60 days. The revised estimate indicates 17.1% year-over-year growth.The consensus estimate for total revenues is pegged at $1.84 billion, indicating a 0.9% year-over-year decline from $1.86 billion.Toll Brothers Inc. Price and EPS Surprise Toll Brothers Inc. price-eps-surprise | Toll Brothers Inc. QuoteFactors Likely to Have Shaped Toll Brothers’ Q1 PerformanceRevenuesDuring the fiscal first quarter, Toll Brothers’ top-line performance is expected to have inched down year over year, given the ongoing uncertainties in the housing market in the United States. Homebuyers’ sentiments are likely to have been weak as affordability challenges persist amid still-high mortgage rates and an uncertain economic scenario. Demand softness across the South and Mountain geographic segments is likely to have restricted the growth.For the fiscal first quarter, TOL expects home deliveries to be between 1,800 units and 1,900 units, indicating a decline from 1,991 units delivered in the year-ago quarter. We expect home deliveries to be down 7.3% year over year to 1,845 units.Nonetheless, the strength of its luxury positioning alongside the approach of offering affordable luxury homes is encouraging. Besides, the improvements in cycle times, increased supply of spec homes and favorable pricing measures are expected to have boded well in the fiscal first quarter.For the quarter, Toll Brothers expects the average selling price (ASP) of delivered homes to be within $985,000-$995,000, up from $924,600 in the year-ago quarter. Our model expects the metric to be up year over year by 6.9% to $988,200 in the fiscal first quarter.Earnings & MarginsThe bottom line of Toll Brothers is expected to have improved in the fiscal first quarter on the back of its disciplined pricing and sales velocity management. Moreover, lower material costs despite an uncertain macro scenario are likely to have aided the uptrend.However, a shift in the mix of revenues to lower margin products in certain geographic regions is expected to have weighed on the home sales gross margin during the fiscal first quarter. Besides, elevated selling, general and administrative (SG&A) expenses because of increased payroll, marketing and insurance costs are expected to somewhat offset further growth of the bottom line.For the quarter to be reported, TOL expects adjusted home sales gross margin to be 26.25%, reflecting a 60-basis point (bps) contraction year over year. The homebuilder also expects SG&A expenses (as a percentage of home sales revenues) to be 14.2%, up 110 bps year over year.BacklogFor the fiscal first quarter, our model expects a total backlog of 5,173 units, down year over year by 18%, with potential revenues declining 13.2% to $6.02 billion.What Our Model Says for TOLOur proven model does not conclusively predict an earnings beat for Toll Brothers this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. This is not the case here, as you will see below.TOL’s Earnings ESP: The company has an Earnings ESP of 0.00%. You can uncover the best stocks before they’re reported with our Earnings ESP Filter.TOL’s Zacks Rank: It currently carries a Zacks Rank of 3. You can see the complete list of today’s Zacks #1 Rank stocks here.Recent Peer ReleasesPulteGroup PHM reported better-than-expected fourth-quarter 2025 results, with adjusted earnings and revenues surpassing the Zacks Consensus Estimate, though both metrics declined year over year amid continued affordability pressures and margin compression.Lower consumer confidence and higher incentive activity weighed on PulteGroup’s profitability, partially offset by stable order trends, higher community counts and disciplined capital deployment. Home sale revenues declined 5% year over year to $4.48 billion, due to a 3% decrease in closings to 7,821 homes and a 1% decline in average selling price or ASP to $573,000. PulteGroup remains focused on disciplined asset turnover, strong cash flow generation and sustained land investment to support 3-5% annual community count growth over time.NVR, Inc. NVR reported better-than-expected fourth-quarter 2025 results, with earnings and Homebuilding revenues surpassing the Zacks Consensus Estimate. Conversely, both earnings and Homebuilding revenues declined on a year-over-year basis.NVR’s performance highlights continued softness in the housing market, with affordability challenges persisting amid macroeconomic uncertainty and inflationary pressures. Settlements in the quarter were down 8.3% year over year to 5,668 units, but the ASP grew 3.3% to $464,900. Backlog units fell year over year by 15.1%, indicating continued caution among homebuyers, but the slight improvement in net new orders (3.3%) advocates optimism for NVR.D.R. Horton, Inc. DHI reported better-than-expected first-quarter fiscal 2026 (ended Dec. 31, 2025) results, with earnings and total revenues beating the Zacks Consensus Estimate.  However, on a year-over-year basis, both metrics declined.The continued housing market softness due to declining consumer confidence and affordability concerns marred the company’s quarterly performance, resulting in lower home closings. Besides, intensive sales incentives to curb affordability issues pressured the bottom line of D.R. Horton. Nonetheless, its strong liquidity, low leverage and national scale offer significant operational and financial flexibility. D.R. Horton expects consolidated revenues to be in the range of $33.5-$35 billion, with home closings within 86,000-88,000 units.Free Report: Profiting from the 2nd Wave of AI ExplosionThe next phase of the AI explosion is poised to create significant wealth for investors, especially those who get in early. It will add literally trillion of dollars to the economy and revolutionize nearly every part of our lives.Investors who bought shares like Nvidia at the right time have had a shot at huge gains.But the rocket ride in the "first wave" of AI stocks may soon come to an end. The sharp upward trajectory of these stocks will begin to level off, leaving exponential growth to a new wave of cutting-edge companies.Zacks' AI Boom 2.0: The Second Wave report reveals 4 under-the-radar companies that may soon be shining stars of AI’s next leap forward.Access AI Boom 2.0 now, absolutely free >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report PulteGroup, Inc. (PHM): Free Stock Analysis Report Toll Brothers Inc. (TOL): Free Stock Analysis Report D.R. Horton, Inc. (DHI): Free Stock Analysis Report NVR, Inc. (NVR): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks