After Toll Brothers (US:TOL), the huge U.S. homebuilder, recently delivered "beat-and-raise" fiscal third-quarter results on Aug, 22, TOL stock garners high Value, Fund Sentiment and Momentum scores on Fintel’s dashboards. 

Moreover, there are multiple signs that the American residential real estate market is poised to perform quite well in the months ahead, and several large institutions bought significant amounts of Toll Brothers' shares last quarter.

TOL Stock Quant Scores After Standout Q2 

TOL stock currently clocks in with a high Value score of 87.30 and a Momentum score of 70 on Fintel’s proprietary quant dashboards. And as institutional investors have been rather enamored with TOL, the stock has earned an impressive Fund Sentiment score of 78.55.

Those scores came after the company reported fiscal Q3 (July end) sales of $3.69 billion on Aug. 22, well above analysts' average estimate of $2.41 billion. On the bottom line, it generated earnings per share of $3.73, beating the mean estimate of $2.81 by a relatively huge amount. 

Further, its home sales revenue climbed 19% year-over-year to $2.7 billion, and it raised its delivery guidance for its current fiscal year to 9,500 to 9,600 from 8,900 to 9,500 previously. 

“Our third quarter performance reflects a market for new homes that continues to benefit from historically low levels of resale inventory, favorable long-term demographic trends, and the persistent underproduction of homes for well over a decade. In addition, our strategy of increasing our supply of spec homes in recent quarters has contributed to our success," CEO Douglas Yearley said in a statement.

Existing Home Prices Rose in July and Zillow Is Upbeat

Last month, the median price of existing homes climbed 1.9% versus the same period a year earlier. to $406,700. Increased existing home prices should help enable Toll Brothers and its competitors to charge higher prices for their new homes.

Meanwhile, economists employed by Zillow recently estimated that U.S. home prices would surge 6.5% in the 12 months that end July 2024, up from its prediction as of last month of a 6.3% gain during the same period. 

“What is sitting on the market is the old, tired inventory, which actually makes it even better for us," Yearly told analysts on the post-earning conference call on Aug. 23. “The market for new homes is solid, and we are well positioned with the right strategy in place to take advantage of it.”

Large Institutions Bought TOL Stock

Last quarter, investment bank Lazard Asset Management acquired 27,528 shares of TOL stock, while State Street, a large bank, purchased a whopping 3.7 million shares and Axa, the huge European insurance company, weighed in with a purchase of 96,100 units.

Another European insurer, Allianz, acquired 536,075 shares, while hedge fund Citadel Advisors snapped up nearly 173,000 shares and the State of North Carolina obtained nearly 50,000 units.