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Toro Company (TTC)
:TTC
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The Toro Company
(NYSE:TTC)
77Outperform
Positive Factors
Product Demand
Autonomy and labor-saving products expected to thrive, with most courses going autonomous with mowers if labor is not available.
Technology
TTC appears well positioned for upcoming battery/autonomous technology shifts.
Valuation
Valuation nearing a 5-year low, suggesting value players might find it attractive at current levels.
Negative Factors
Backlog
Backlog conversion/possible air pocket still remains a concern.
Inventory
Extra inventory and challenging consumer leading to expectations for flat year.
The Toro Company (TTC) vs. S&P 500 (SPY)
Market Cap
$7.67B
Dividend Yield1.9%
Average Volume (3M)882.50K
Price to Earnings (P/E)19.8
Beta (1Y)1.16
Revenue Growth4.02%
EPS Growth42.77%
CountryUS
Employees11,108
SectorIndustrials
Sector Strength91
IndustryManufacturing - Tools & Accessories
Share Statistics
EPS (TTM)0.65
Shares Outstanding99,820,060
10 Day Avg. Volume770,541
30 Day Avg. Volume882,502
Financial Highlights & Ratios
PEG Ratio-0.02
Price to Book (P/B)4.88
Price to Sales (P/S)0.00
P/FCF Ratio13.85
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$89.75Price Target Upside16.77% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering4
The Toro Company Business Overview & Revenue Model
Company DescriptionThe Toro Company engages in the designing, manufacturing, marketing, and selling professional and residential equipment worldwide. The company's Professional segment offers turf and landscape equipment products, including sports fields and grounds mowing and maintenance equipment, golf course mowing and maintenance equipment, landscape contractor mowing equipment, landscape creation and renovation equipment, and other maintenance equipment; rental, specialty, and underground construction equipment; and snow and ice management equipment, such as snowplows, brush, snow thrower attachment, salt and sand spreaders, and related parts and accessories for light and medium duty trucks, utility task vehicles, skid steers, and front-end loaders. It also provides irrigation and lighting products that consist of sprinkler heads, electric and hydraulic valves, controllers, computer irrigation central control systems, coupling systems, and ag-irrigation drip tape and hose products, as well as professionally installed landscape lighting products offered through distributors and landscape contractors. This segment sells its products primarily through a network of distributors and dealers to professional users engaged in maintaining golf courses, sports fields, municipal properties, agricultural fields, residential and commercial landscapes, and removing snow and ice, as well as directly to government customers, rental companies, and retailers. Its Residential segment provides walk power mowers, zero-turn riding mowers, snow throwers, replacement parts, and home solution products that include grass and hedge trimmers, leaf blowers, blower-vacuums, chainsaws, string trimmers, hoses, and hose-end retail irrigation products. This segment sells its products to homeowners through a network of distributors and dealers; and home centers, hardware retailers, and mass retailers, as well as online. The Toro Company was founded in 1914 and is headquartered in Bloomington, Minnesota.
How the Company Makes MoneyThe Toro Company generates revenue primarily through the sale of its equipment and products, which are categorized into two main business segments: Professional and Residential. The Professional segment, which constitutes the majority of its revenue, includes products such as golf course maintenance equipment, landscape contractor equipment, and irrigation systems for commercial landscapes. The Residential segment offers products like lawnmowers, snow blowers, and irrigation systems for homeowners. Additionally, Toro makes money through after-sales services, parts, and accessories, which provide a steady revenue stream due to the ongoing maintenance needs of its equipment. The company also benefits from strategic partnerships and a global distribution network that enhance its market reach and sales capabilities.
The Toro Company Financial Statement Overview
Summary
The Toro Company demonstrates strong financial health with stable profitability and efficient cash generation. The income statement shows solid margins, and the balance sheet reflects low leverage and high returns on equity. While cash flow is robust, negative financing cash flow indicates potential capital returns or debt repayment. Monitoring revenue trends and capital structure remains important.Income Statement
The Toro Company displayed stable revenue with slight fluctuations over recent periods. The TTM gross profit margin is 33.6%, and the net profit margin is 8.9%, indicating solid profitability. The EBIT and EBITDA margins are 11.3% and 14.2% respectively, showing operational efficiency. However, there was a slight decrease in total revenue from the annual 2024 period to TTM, which could be a concern if the trend continues.85
Very Positive
Balance Sheet
The debt-to-equity ratio stands at 0.07, demonstrating low leverage and financial stability. The return on equity (ROE) is 27.7%, showcasing strong returns for shareholders. The equity ratio is 39.7%, suggesting a balanced capital structure. However, fluctuations in equity due to changes in retained earnings may impact future stability.78
Positive
Cash Flow
Operating cash flow is robust, with a TTM value of $613.5 million. Free cash flow growth indicates strong cash generation capabilities, with a TTM free cash flow of $509.2 million showing significant growth from previous periods. The operating cash flow to net income ratio is 1.51, indicating effective earnings conversion to cash flow. However, financing cash flow is negative, suggesting that the company may be returning capital to shareholders or paying down debt.82
Very Positive
| Breakdown | |||||
| TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 4.58B | 4.58B | 4.55B | 4.51B | 3.96B | 3.38B | Gross Profit |
| 1.54B | 1.55B | 1.58B | 1.50B | 1.34B | 1.19B | EBIT |
| 519.30M | 533.30M | 430.70M | 575.66M | 518.28M | 426.36M | EBITDA |
| 685.20M | 702.90M | 578.40M | 697.09M | 627.79M | 535.84M | Net Income Common Stockholders |
| 406.80M | 418.90M | 329.70M | 443.30M | 409.90M | 329.70M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 171.30M | 199.50M | 193.10M | 188.25M | 405.61M | 479.89M | Total Assets |
| 3.70B | 3.58B | 3.64B | 3.56B | 2.94B | 2.85B | Total Debt |
| 1.22B | 1.04B | 1.16B | 1.07B | 761.28M | 873.21M | Net Debt |
| 1.05B | 841.70M | 970.00M | 881.87M | 355.67M | 393.32M | Total Liabilities |
| 2.23B | 2.03B | 2.13B | 2.20B | 1.79B | 1.74B | Stockholders Equity |
| 1.47B | 1.55B | 1.51B | 1.35B | 1.15B | 1.11B |
| Cash Flow | Free Cash Flow | ||||
| 509.20M | 466.40M | 157.30M | 153.69M | 451.46M | 461.31M | Operating Cash Flow |
| 613.50M | 569.90M | 306.80M | 297.17M | 555.47M | 539.37M | Investing Cash Flow |
| -59.70M | -59.70M | -157.70M | -548.25M | -128.45M | -216.08M | Financing Cash Flow |
| -574.60M | -505.10M | -147.50M | 42.24M | -503.65M | 2.35M |
The Toro Company Technical Analysis
Positive
76.86
Price Trends
71.00
Positive
75.76
Positive
80.23
Negative
Market Momentum
1.86
Negative
65.90
Neutral
94.92
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TTC, the sentiment is Positive. The current price of 76.86 is above the 20-day moving average (MA) of 71.46, above the 50-day MA of 71.00, and below the 200-day MA of 80.23, indicating a neutral trend. The MACD of 1.86 indicates Negative momentum. The RSI at 65.90 is Neutral, neither overbought nor oversold. The STOCH value of 94.92 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TTC.
The Toro Company Risk Analysis
The Toro Company disclosed 35 risk factors in its most recent earnings report. The Toro Company reported the most risks in the “Production” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
The Toro Company Peers Comparison
Overall Rating
UnderperformOutperform
Sector (64)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
77 Outperform | $7.67B | 19.82 | 26.98% | 1.90% | 4.02% | 42.77% | |
76 Outperform | $11.25B | 25.05 | 34.83% | 1.44% | -2.29% | -14.49% | |
73 Outperform | $11.87B | 49.10 | 8.51% | ― | 4.62% | 21.58% | |
71 Outperform | $17.35B | 17.36 | 19.15% | 2.41% | -0.88% | 0.04% | |
69 Neutral | $5.12B | 15.90 | 11.85% | 1.85% | -3.69% | -11.76% | |
68 Neutral | $10.93B | 30.35 | 4.03% | 4.58% | -3.04% | ― | |
64 Neutral | $4.44B | 11.99 | 5.16% | 249.23% | 4.01% | -11.87% |
* Industrials Sector Average
Performance Comparison
TTC
The Toro Company
76.86
-7.85
-9.27%
LECO
Lincoln Electric Holdings
201.45
-20.14
-9.09%
RBC
RBC Bearings
377.14
81.78
27.69%
SNA
Snap-on
331.92
61.06
22.54%
SWK
Stanley Black & Decker
70.62
-14.40
-16.94%
TKR
Timken Company
73.12
-17.08
-18.94%
The Toro Company Earnings Call Summary
Earnings Call Date:Mar 06, 2025
(Q1-2025)
| % Change Since: -0.95%|
Next Earnings Date:Jun 05, 2025
Earnings Call Sentiment Neutral
The Toro Company started fiscal 2025 with strong performance in the Professional segment and increased adjusted earnings per share. The AMP initiative showed significant savings, and new product innovations were introduced. However, the Residential segment faced challenges due to lower snow product shipments and higher material costs. The tariff environment remains uncertain.Q1-2025 Updates
Positive Updates
Strong Professional Segment Growth
Professional segment net sales were $768.8 million, up 1.6% year-over-year, driven by higher shipments of golf and grounds products and zero-turn mowers.
Increased Adjusted Diluted Earnings Per Share
Adjusted diluted earnings per share increased to $0.65, up from $0.64 last year, driven by improved profitability in the Professional segment.
Successful AMP Initiative Implementation
Implemented nearly $50 million in run rate savings in Q1, bringing the total to $64 million, primarily driven by headcount actions and supply-based transformation.
New Product Innovations
Introduced several new products, including the Toro Turf Pro autonomous mower, Toro Range Pro golf ball picking robot, and a partnership with TerraRad for soil moisture mapping technology.
Strong Cash Flow Management
Repurchased $100 million in shares during the quarter, following nearly $250 million in repurchases last year.
Negative Updates
Residential Segment Decline
Residential segment net sales were $221 million, down from $240 million last year, due to lower shipments of snow products and the Pope divestiture.
Below Average Snowfall Impact
Below average snowfall in key markets affected sales, particularly in the residential segment.
Higher Material and Manufacturing Costs
Increased material, manufacturing, and freight costs negatively impacted margins.
Tariff Environment Concerns
Uncertainty due to the rapidly changing tariff environment, particularly regarding new tariffs on China imports.
Company Guidance
During The Toro Company's first-quarter earnings call for fiscal 2025, the company reported nearly $1 billion in net sales, with a notable 1.6% growth in the professional segment, offset by a decline in the residential segment. Adjusted diluted earnings per share increased to $0.65, driven by the company's AMP initiative and improved profitability in the professional segment, which saw earnings rise to $127.2 million, representing 16.5% of net sales. Despite challenges such as elevated snow product inventories and a volatile tariff environment, Toro maintained its full-year guidance for net sales growth between 0% to 1% and adjusted diluted EPS between $4.25 to $4.40. The company plans to strategically reinvest up to half of the $100 million in annualized run-rate savings expected from its AMP initiative by fiscal 2027, with $64 million in savings already realized. The guidance excludes all incremental tariffs introduced year-to-date, apart from those on Chinese imports effective in February. Toro is also committed to driving growth through product innovation in its golf and underground construction businesses.Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.