Episode Details

Toll Brothers Q1 2026 earnings breakdown - conversational walkthrough with a price-aware verdict and Wall Street consensus comparison. THE CALL: HOLD (3/5 conviction, MODERATE) - CURRENT @ $124.13 - HOLD - BUY below $105.00 with $95.00 stop - AVOID above $160.00 TRIGGER: Q3 deliveries above guide-high OR mortgage rates fall to 6% WINDOW: Through Q4 FY2026 earnings (mid-December 2026) TRACKER: charged-alpha.com/calls/TOL WALL STREET CONSENSUS - Ratings: 3 Strong Buy / 8 Buy / 9 Hold / 1 Sell / 0 Strong Sell - BUY - Median 12-month price target: $140.00 (range $95 - $175) - Charged Alpha vs consensus: ALIGNED THESIS Toll Brothers is the highest-quality luxury homebuilder going through a multi-quarter housing-cycle digestion. Bull lever: Mortgage-rate decline plus Fed easing would accelerate new orders past 10% YoY and drive 2027 EPS above $14 - the multiple re-rates from 9x to 12-14x. Key risk: Backlog is finite. If new orders flatten in H2 FY26, the FY27 revenue base shrinks and the cycle drags on. Land inventory is up - that's optionality but also working-capital cost. QUALITY CHECK - Management quality grade: A- (Yearley team has navigated multiple housing cycles with disciplined land buying, conservative leverage, and consistent share buybacks. Best-in-class luxury operator.) - Earnings quality grade: B (GAAP EPS clean - no big adjustments. FCF negative this Q on land-inventory build for FY27 - that's investment, not weakness.) CHAPTERS 0:00 Hook 0:37 The Print 1:27 The Trend 2:17 The Segments 3:05 The FCF Bridge 3:57 Guidance & The Narrative Diff 5:11 Peer Dot-Plot 6:01 Management & Earnings Quality 7:16 The Call - Verdict (price-aware + consensus) 8:08 The Call - Supporting Evidence KEY METRICS - Q2 FY2026 - Home sale revenue: $2.51B (-7.2% YoY) - Adjusted EPS: $2.72 (vs $2.58 est, +5.4% beat; but -22.3% YoY) - Deliveries: 2,491 homes (ASP $1009K) - New orders: $2.81B / 2,834 units (+7% units, +8% dollars) - Backlog: $6.32B / 5,394 units - Gross margin: 23.9% GAAP / 26.2% adjusted - Operating margin: 13.6% (-280 bps YoY) GUIDANCE - RAISED across the board - FY26 deliveries: 10,400 to 10,700 units (raised) - FY26 ASP: $985K to $1000K (raised) - FY26 adjusted gross margin: 26.10% (raised) - FY26 SG&A: 10.10% - Q3 deliveries: 2,600 to 2,700 units; ASP $965K-$985K; adj GM 25.25% NARRATIVE DIFF - what changed in management tone - Q4 FY25 call (Feb): "well positioned for fiscal 2026 with our Pro ecosystem investments" - Q1 FY26 call (May): "underlying demand similar to fiscal 2025, despite greater consumer uncertainty and housing affordability pressure" - Tone shift: confident strategic positioning - defensive acknowledgment of housing pressure DATA SOURCES - FMP (financialmodelingprep.com) - Toll Brothers Q1 2026 Press Release (2026-05-19) - Q1 FY26 Earnings Call commentary DISCLAIMER This is for informational and entertainment purposes only. Not financial advice. Charged Alpha does not have a position in TOL. Do your own research before any investment decision. #HD #HomeDepot #earnings #investing #stocks #ChargedAlpha