Categories: Invest

Is it time to buy Toll Brothers stock after guiding strong 2022 revenue growth?

On Wednesday, Toll Brothers Inc. (NYSE:TOL) shares advanced slightly after reporting its most recent quarterly results. The company announced its fiscal fourth-quarter revenue and earnings Tuesday after markets closed, outperforming the consensus for analyst expectations.

The company posted FQ4 GAAP earnings per share of $3.02, surpassing the average analyst estimate of $2.48. On the other hand, revenue for the quarter increased by 19.2% from the same quarter in 2020 to $3.04 billion, exceeding the consensus for Street expectations by $130 million.


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The stock has now surged nearly 70% this year following the slight post-earnings gain.

Toll Brothers looks undervalued

From an investment perspective, Toll Brothers shares trade at attractive trailing 12-month and forward P/E ratios of 13.73 and 7.94, respectively.

Therefore, the stock could be an exciting option for bargain hunters. In addition, analysts expect Toll Brothers to post an EPS growth of 45.58% next year, before rising at an average annual rate of 17.70% over the next five years.

As a result, the stock could gain the attention of long-term growth investors.

Source – TradingView

Technically, Toll Brothers shares seem to be trading within a sharply ascending channel formation in the intraday chart. As a result, the stock has surged deep into the overbought conditions of the 14-day RSI.

Therefore, investors could target technical pullback profits at about $70.66, or lower at %68.99. On the other hand, if the rally continues, Toll Brothers shares could find resistance at about $73.61, or higher at $75.03.

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