Toro Co (TTC) stock analysis

P/E above its 5-year median

Toro's P/E of 28.7 is above its own 5-year median of 24.5.

P/E above the industry

Toro's P/E of 28.7 is above the Industrial and Commercial Machinery and Computer Equipment median of 27.1.

EV/EBITDA below its 5-year median

Toro's EV/EBITDA of 17.2 is below its 5-year median of 19.0.

P/B above the industry

Toro's price-to-book of 7.60 is above the Industrial and Commercial Machinery and Computer Equipment median of 2.71.

Trading above fair value

The share price of $107.28 is above our fair value estimate of $93.03.

Margin of safety under 20%

The price is 15.3% above fair value, so there is no margin of safety.

Revenue growing under 10% a year

Revenue grew -0.0% a year over the last three fiscal years, short of the 10% we look for.

EPS growing under 10% a year

Diluted EPS grew -9.0% a year over the last three fiscal years.

Earnings growth accelerating

Net income grew 9.1% over the last twelve months, against a 5-year average of -0.8% a year.

Growing slower than the industry

Revenue grew 5.2% over the last twelve months; the Industrial and Commercial Machinery and Computer Equipment median is 10.1%.

Guidance raised

Toro raised its full-year total company net sales growth outlook on Sep 3, 2026.

Gross margin improving

Gross margin was 33.4% over the last twelve months, against 33.3% a year earlier.

Return on equity over 15%

Return on equity was 26.4% over the last twelve months and averaged 28.6% over five years.

Return on capital over 10%

Return on invested capital was 17.6%, above the 10% that usually covers the cost of capital.

Return on equity above the industry

Toro's return on equity of 26.4% is above the Industrial and Commercial Machinery and Computer Equipment median of 7.0%.

Earnings shrank over 5 years

Net income shrank 0.8% a year on average over the last five fiscal years.

Net margin below its 5-year average

Net margin was 7.6% over the last twelve months, against a 5-year average of 8.7%.

Net margin above the industry

Toro's net margin of 7.6% is above the Industrial and Commercial Machinery and Computer Equipment median of 4.8%.

High debt

Debt is 72.0% of shareholders' equity, above the 40% we consider low.

Debt rising against equity

Debt to equity rose from 71.0% five years ago to 72.0%.

Debt covered by cash flow

Operating cash flow over the last twelve months equals 82.0% of total debt.

Interest well covered

Operating income covers interest expense 8.7 times.

Short-term assets cover short-term debts

Current assets are 1.58 times current liabilities.

Low bankruptcy risk

The Altman Z-score is 5.31; above 3 is the safe zone and below 1.8 the distress zone.

Pays a dividend

Toro paid dividends worth 1.5% of the share price over the last twelve months.

Yield below Treasuries

The 1.5% yield is below the 4.4% on a 1-year Treasury.

Yield below the top quarter

The top quarter of US dividend payers yield 3.8% or more; Toro yields 1.5%.

Dividend not cut

The dividend per share has not fallen by more than 10% in any of the last 10 fiscal years.

Covered by earnings

Dividends take 41.3% of net income.

Covered by free cash flow

Dividends take 21.1% of free cash flow.