Toll Brothers Surges to 263rd in Trading Volume Amid Q3 Earnings Beat and Margin Squeeze

Toll Brothers (TOL) saw a 0.76% rise on August 19, 2025, with a trading volume of $370 million, marking an 84.62% increase from the previous day and ranking 263rd in market activity. The luxury homebuilder reported fiscal Q3 FY2025 results showing $2.88 billion in revenue, surpassing the $2.86 billion consensus estimate, driven by a 6% year-over-year growth in home deliveries. GAAP earnings per share came in at $3.73, exceeding expectations of $3.60, though margins contracted to 25.6% from 27.4% due to inventory impairments and a shift in home sales mix. Despite a 19% decline in backlog units year-over-year, the company maintained pricing power with an average selling price of $973,600 and returned $226 million to shareholders via buybacks and dividends.

Strategic focus on land option agreements and joint ventures supported disciplined expansion, with active communities rising to 420 from 404 in the prior year. However, weaker demand signals emerged as net signed contracts fell 4% annually, and cancellation rates rose to 3.2% of the starting backlog. Management maintained delivery guidance for 3,350 homes in the next quarter and 11,200 for fiscal 2025, with average selling prices expected to remain stable between $950,000–$960,000. Adjusted gross margin guidance of 27.25% was unchanged, reflecting ongoing cost controls despite margin pressures.

The strategy of buying the top 500 stocks by daily trading volume and holding them for one day resulted in a moderate return. The total profit from December 2022 to August 2025 was $2,940, with a maximum drawdown of -$1,960 during the same period. This indicates a volatile but ultimately positive performance, with the highest peak-to-trough decline being 19.6%.