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Toll BrothersLTS:0LFS -0.60%90 Degree of Operating Leverage is 14.56 as of Jul. 2026. GuruFocus rates LTS:0LFS with a GF Score™ of 90/100 and a GF Value™ of $143.37 (Fairly Valued). The stock has 3 warning signs investors should review. Among 87 Homebuilding & Construction companies, Toll Brothers ranks worse than 93.1% on this metric.
Degree of Operating Leverage (DOL) measures the percentage change in EBIT for a unit change in Revenue.
Toll Brothers's Degree of Operating Leverage for the quarter that ended in Jul. 2026 was 14.56. The higher Degree of Operating Leverage, the higher operating risk the company will take.
The industry rank for Toll Brothers's Degree of Operating Leverage or its related term are showing as below:
LTS:0LFS's Degree of Operating Leverage is ranked worse than 93.1% of 87
companies
in the Homebuilding & Construction industry
Industry Median: 1.39
vs LTS:0LFS: 14.56
Toll Brothers (LTS:0LFS) Degree of Operating Leverage Explanation
Degree of Operating Leverage (DOL) is a leverage ratio that measures the sensitivity of a company’s operting income, also referred to as Earnings Before Interest and Taxes (EBIT), to fluctuations in its Revenue. DOL is a method used to quantify a company’s operating risk. This risk is related to the company's structure of variable costs and fixed costs. Since the fixed costs do not allow the company to adjust the operating costs, the operating risk rises with a higher fixed-to-variable costs proportion.
A high Degree of Operating Leverage indicates that the company’s fixed costs exceed its variable costs. By increasing the sales, the company can earn more profits. In addition, the company must be able to maintain relatively high sales to cover all fixed costs.
Be Aware
The use of operating leverage varies across different industries and business sectors, and the application of Degree of Operating Leverage (DOL) should be adjusted accordingly.
Toll Brothers Degree of Operating Leverage Related Terms
Toll Brothers Degree of Operating Leverage Historical Data
* Premium members only.
The historical data trend for Toll Brothers's Degree of Operating Leverage can be seen below:
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
LTS:0LFS vs NVR, IBP, LEN: Degree of Operating Leverage Comparison
For the Residential Construction subindustry, Toll Brothers's Degree of Operating Leverage, along with its competitors' market caps and Degree of Operating Leverage data, can be viewed below:
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.
Toll Brothers Degree of Operating Leverage vs Homebuilding & Construction Industry
For the Homebuilding & Construction industry and Consumer Cyclical sector, Toll Brothers's Degree of Operating Leverage distribution charts can be found below:
* The bar in red indicates where Toll Brothers's Degree of Operating Leverage falls into.
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
** TTM data of EBIT and Revenue was used to calculate Degree of Operating Leverage.
*** Please be aware that the Degree of Operating Leverage calculations are based on company-level data using the primary share class. The calculated data provided is for demonstration purposes and may slightly differ from the results displayed in the title due to potential variations caused by currency exchange rate differences throughout the year.
What does a Degree of Operating Leverage of 14.56 mean?
Toll Brothers (LTS:0LFS) has a Degree of Operating Leverage of 14.56 as of Jul. 2026. Degree of Operating Leverage (DOL) measures the percentage change in EBIT for a unit change in Revenue. View historical data for Toll Brothers and its competitors. According to the industry distribution chart, Toll Brothers ranks #81 out of 87 companies in the Homebuilding & Construction industry, placing it in the top 93.1%.
Is Toll Brothers' Degree of Operating Leverage too high?
Toll Brothers' current Degree of Operating Leverage is 14.56. The Homebuilding & Construction industry median Degree of Operating Leverage is 1.39. Toll Brothers' value of 14.56 is 947.5% above this industry median. Based on the distribution chart, Toll Brothers ranks #81 out of 87 companies in the Homebuilding & Construction industry, which is in the bottom quartile relative to peers. Overall, Toll Brothers has a GF Score™ of 90/100 and is considered Fairly Valued, reflecting its overall financial health beyond just this single metric.
How does Toll Brothers' Degree of Operating Leverage compare to NVR and IBP?
According to the Homebuilding & Construction industry distribution chart, Toll Brothers ranks #81 out of 87 companies for Degree of Operating Leverage. This places Toll Brothers in the lower half of its industry. The industry median Degree of Operating Leverage is 1.39. Toll Brothers' value of 14.56 is 947.5% above this benchmark. See the competitive comparison table and distribution chart on this page for a detailed peer-by-peer breakdown.
What is a good Degree of Operating Leverage for a Homebuilding & Construction company?
The median Degree of Operating Leverage among Homebuilding & Construction companies is 1.39, based on 87 companies in the industry. Companies in the top quartile (top 25%) have a Degree of Operating Leverage significantly above this median, while those in the bottom quartile fall well below. However, Degree of Operating Leverage should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. Toll Brothers's current Degree of Operating Leverage of 14.56 is 947.5% above the industry median. Use the industry distribution chart on this page to see where any company falls relative to its peers.
What does a high Degree of Operating Leverage mean?
A high Degree of Operating Leverage can signal that a stock is expensive relative to its fundamentals. Degree of Operating Leverage (DOL) measures the percentage change in EBIT for a unit change in Revenue. View historical data for Toll Brothers and its competitors. For the Homebuilding & Construction industry, the median Degree of Operating Leverage is 1.39 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. Toll Brothers's current Degree of Operating Leverage is 14.56. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is Toll Brothers stock overvalued right now?
Based on GuruFocus' analysis, Toll Brothers (LTS:0LFS) is currently considered Fairly Valued. The stock's GF Value™ is $143.37, compared to a current price of $134.05 — trading 6.5% below its estimated fair value. The current Degree of Operating Leverage is 14.56 and 947.5% above the Homebuilding & Construction industry median of 1.39. Toll Brothers' overall GF Score™ is 90/100 with 3 warning signs to review. Investors should evaluate multiple metrics — including profitability, growth, and financial strength — before making a decision.
How is Degree of Operating Leverage calculated?
Degree of Operating Leverage is calculated from a company's financial statements. For Toll Brothers (LTS:0LFS), the current Degree of Operating Leverage is 14.56 as of Jul. 2026. GuruFocus calculates this using data sourced from SEC filings and annual reports. See the calculation section and 30-year financial data on this page for the full breakdown.
Is Toll Brothers (LTS:0LFS) Overvalued in 2026?
Based on GuruFocus' analysis, Toll Brothers stock appears to be undervalued.
The current stock price of $134.05 is trading 6.5% below its estimated GF Value™ of $143.37.
GuruFocus considers Toll Brothers to be Fairly Valued.
Key valuation signals for LTS:0LFS:
Degree of Operating Leverage: 14.56
GF Value™: $143.37 vs. price of $134.05 (6.5% below fair value)
Industry Position: 947.5% above the Homebuilding & Construction median (#81 of 87)
No single metric tells the full story. See the LTS:0LFS stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
Toll Brothers is the leading luxury homebuilder in the United States with an average sale price well above public competitors'. The company operates in over 60 markets across 24 states and caters to move-up, active-adult, and second-homebuyers. Toll Brothers consistently ranks as a top 10 builder within the US according to total home closings. Traditional homebuilding operations represent most of the company's revenue. Toll Brothers also builds luxury for-sale and for-rent properties in urban centers across the US It has its headquarters in Horsham, Pennsylvania.
90GF Score
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