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Richard Sloan from the University of Michigan was first to document what is referred to as the "accrual anomaly". His 1996 paper found that shares of companies with small or negative accruals vastly outperform (+10%) those of companies with large ones.
Toll Brothers's Sloan Ratio for the quarter that ended in Apr. 2026 was -0.31%.
As of Apr. 2026, Toll Brothers has a Sloan Ratio of -0.31%, indicating the company is in the safe zone and there is no funny business with accruals.
Toll Brothers (LTS:0LFS) Sloan Ratio % Explanation
A former University of Michigan researcher, Richard Sloan's 1996 paper found that shares of companies with small or negative accruals vastly outperform (+10%) those of companies with large ones. In fact, for the 40-year period between 1962 and 2001, buying the lowest accrual companies and shorting the highest accrual companies resulted in an average annual compounded return of 18%, more than double the S&P 500's 7.4% annual return over the same period.
If the Sloan Ratio is between -10% and 10%, the company is in the safe zone and there is no funny business with accruals.
If the Sloan Ratio is less than between -25% and -10% on the negative side, and between 10% and 25% on the positive side, this is a warning stage of accrual build up.
If the Sloan Ratio is less than -25% or greater than 25%, and this ratio is consistent over several quarters or even years, be careful. Earnings are highly likely to be made up of accruals.
As of Apr. 2026, Toll Brothers has a Sloan Ratio of -0.31%, indicating the company is in the safe zone and there is no funny business with accruals.
Toll Brothers Sloan Ratio % Related Terms
Toll Brothers Sloan Ratio % Historical Data
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The historical data trend for Toll Brothers's Sloan Ratio % 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, LEN, TMHC: Sloan Ratio % Comparison
For the Residential Construction subindustry, Toll Brothers's Sloan Ratio %, along with its competitors' market caps and Sloan Ratio % 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 Sloan Ratio % vs Homebuilding & Construction Industry
For the Homebuilding & Construction industry and Consumer Cyclical sector, Toll Brothers's Sloan Ratio % distribution charts can be found below:
* The bar in red indicates where Toll Brothers's Sloan Ratio % falls into.
Earnings contain a lot of non cash earnings which is called accruals. The Sloan ratio is a way to identify firms with low non-cash or accrual-derived earnings relative to their cash flow.
Toll Brothers's Sloan Ratio for the fiscal year that ended in Oct. 2025 is calculated as
Toll Brothers's Net Income for the trailing twelve months (TTM) ended in Apr. 2026 was 369.621 (Jul. 2025 ) + 446.715 (Oct. 2025 ) + 210.932 (Jan. 2026 ) + 260.591 (Apr. 2026 ) = $1,288 Mil.
Toll Brothers's Cash Flow from Operations for the trailing twelve months (TTM) ended in Apr. 2026 was 370.31 (Jul. 2025 ) + 800.03 (Oct. 2025 ) + 7.268 (Jan. 2026 ) + 134.45 (Apr. 2026 ) = $1,312 Mil.
Toll Brothers's Cash Flow from Investing for the trailing twelve months (TTM) ended in Apr. 2026 was -52.412 (Jul. 2025 ) + -69.864 (Oct. 2025 ) + 187.68 (Jan. 2026 ) + -44.876 (Apr. 2026 ) = $21 Mil.
* 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.
Toll Brothers (LTS:0LFS) has a Sloan Ratio % of -0.31% as of Apr. 2026. Sloan ratio measures earnings quality based on the amount of accruals. View historical data on Toll Brothers and its competitors.
Is Toll Brothers' Sloan Ratio % too high?
Toll Brothers' current Sloan Ratio % is -0.31%. Overall, Toll Brothers has a GF Score™ of 95/100 and is considered Fairly Valued, reflecting its overall financial health beyond just this single metric.
How does Toll Brothers' Sloan Ratio % compare to NVR and LEN?
Toll Brothers' Sloan Ratio % of -0.31% can be compared against companies in the Homebuilding & Construction industry. See the competitive comparison table and distribution chart on this page for a detailed peer-by-peer breakdown.
What is a good Sloan Ratio % for a Homebuilding & Construction company?
A good Sloan Ratio % depends on the Homebuilding & Construction industry context. However, Sloan Ratio % should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. Use the industry distribution chart on this page to see where any company falls relative to its peers.
What does a high Sloan Ratio % mean?
A high Sloan Ratio % can signal that a stock is expensive relative to its fundamentals. Sloan ratio measures earnings quality based on the amount of accruals. View historical data on Toll Brothers and its competitors. Toll Brothers's current Sloan Ratio % is -0.31%. 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 $136.18, compared to a current price of $148.45 — trading 9% above its estimated fair value. The current Sloan Ratio % is -0.31%. Toll Brothers' overall GF Score™ is 95/100 with 3 warning signs to review. Investors should evaluate multiple metrics — including profitability, growth, and financial strength — before making a decision.
How is Sloan Ratio % calculated?
Sloan Ratio % is calculated from a company's financial statements. For Toll Brothers (LTS:0LFS), the current Sloan Ratio % is -0.31% as of Apr. 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 overvalued.
The current stock price of $148.45 is trading 9% above its estimated GF Value™ of $136.18.
GuruFocus considers Toll Brothers to be Fairly Valued.
Key valuation signals for LTS:0LFS:
Sloan Ratio %: -0.31%
GF Value™: $136.18 vs. price of $148.45 (9% above fair value)
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.
95GF Score
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