Toll Brothers (TOL) opened its Q2 2026 earnings season with Q1 fiscal 2026 revenue of US$2.1 billion and basic EPS of US$2.20, setting a clear benchmark for how the rest of the year might shape up. Over recent quarters, the company has seen revenue move from US$3.3 billion in Q4 2024 to US$3.4 billion in Q4 2025 and EPS shift from US$4.67 to US$4.62 across those same periods. Trailing twelve month EPS stood at US$14.12 on revenue of US$11.3 billion in Q1 2026, giving investors a fuller read on earnings power. With a trailing net profit margin of 12.3% compared with 14% a year earlier, the latest results put the focus squarely on how efficiently Toll Brothers is converting its top line into profit.

See our full analysis for Toll Brothers.

With the latest figures on the table, the next step is to see how these results line up with the prevailing growth and profitability narratives investors have been following.

Margins Ease Back From 14% To 12.3%

• The trailing net profit margin sits at 12.3%, compared with 14% a year earlier, on trailing revenue of about US$11.3b and net income of US$1.4b.
• Bears focus on the margin pressure, and the data does give them something to point to:
  • Trailing margins moved lower over the year while earnings over the most recent year declined after growing 13.4% per year over the last five years. This matches the cautious view that rising costs and incentives can weigh on profitability.
  • At the same time, the bearish narrative talks about ongoing pressure from insurance, labor and land development costs. The current 12.3% margin is consistent with that concern about future earnings growth if those costs stay high.

Get a closer look at how margin trends fit into the more cautious view on the stock with the 🐻 Toll Brothers Bear Case.

TTM EPS At US$14.12 With Mixed Growth Signals

• Over the last twelve months, basic EPS totals US$14.12 on revenue of about US$11.3b, compared with five year annualised earnings growth of 13.4% and an expected forward earnings growth rate of 9.3% per year.
• Supporters of the bullish narrative point to the earnings base as a platform for future growth, and the numbers partly support that:
  • Trailing EPS of US$14.12 and trailing net income of about US$1.4b give bulls a current earnings level that is already close to the US$1.5b earnings figure some forecasts reference for the next few years.
  • However, the recent year of negative earnings growth and the step down from 14% to 12.3% margin challenge the idea that earnings will easily keep rising without further efficiency gains or stronger revenue growth than the 7.9% forecast.

See how optimistic investors connect these earnings trends to their long term thesis in the 🐂 Toll Brothers Bull Case.

Low 9.3x P/E Versus DCF And Targets

• The stock trades on a trailing P/E of 9.3x, below a peer average of 14.8x and industry average of 11.5x, with the shares around US$136.31 versus an analyst price target reference of US$168.06 and a DCF fair value of about US$193.07.
• Consensus narrative watchers have a lot to weigh up when they compare these valuation gaps with the growth profile:
  • Revenue is forecast to grow 7.9% per year and earnings 9.3% per year, both below the US market forecasts of 11.6% and 16.8% respectively. This helps explain why the P/E trades under peers even though the DCF fair value sits well above the current price.
  • Analysts in the dataset still show a potential upside of about 23.3% to their price targets, so the combination of slower forecast growth, lower P/E, and a DCF value of US$193.07 gives a mixed picture that readers may want to compare with their own expectations.

Next Steps

To see how these results tie into long-term growth, risks, and valuation, check out the full range of community narratives for Toll Brothers on Simply Wall St. Add the company to your watchlist or portfolio so you'll be alerted when the story evolves.

Seeing both cautious and optimistic angles in this report, it makes sense to check the underlying data yourself and move quickly if your view differs. To understand what is driving the positive arguments, take a closer look at the 4 key rewards.

See What Else Is Out There

Toll Brothers is dealing with easing margins, modest forecast revenue and earnings growth, and a P/E that still reflects those softer expectations.

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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.