Shares in The Toro Company do not show any sign of a slowdown in the ascending dynamic. Investors could bet on a continuation of the underlying trend.
Summary
● The company has strong fundamentals. More than 70% of companies have a lower mix of growth, profitability, debt and visibility.
● The company presents an interesting fundamental situation from a short-term investment perspective.
Strengths
● Over the past year, analysts have regularly revised upwards their sales forecast for the company.
● Upward revisions of sales forecast reflect a renewed optimism among the analysts covering the stock.
● Predictions on business development from analysts polled by Standard & Poor's are tight. This results from either a good visibility into core activities or accurate earnings releases.
● The divergence of price targets given by the various analysts who make up the consensus is relatively low, suggesting a consensus method of evaluating the company and its prospects.
● Historically, the company has been releasing figures that are above expectations.
Weaknesses
● With a 2021 P/E ratio at 29.8 times the estimated earnings, the company operates at rather significant levels of earnings multiples.
● The company appears highly valued given the size of its balance sheet.
● The valuation of the company is particularly high given the cash flows generated by its activity.
● The firm pays small or no dividend to shareholders. For that reason, it is not a yield company.
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The Toro Company designs, manufactures, markets and sells professional turf maintenance equipment and services; turf irrigation systems; landscaping equipment and lighting products; snow and ice management products; agricultural irrigation (ag-irrigation) systems; rental, specialty and underground construction equipment, and residential yard and snow thrower products. The Company operates through two segments: Professional and Residential. The Professional segment consists of turf and landscape equipment; rental, specialty, and underground construction equipment; snow and ice management equipment, and irrigation and lighting products. The Residential segment consists of consists of walk power mowers, zero-turn riding mowers, snow throwers, replacement parts, and home solutions products, including grass trimmers, hedge trimmers, leaf blowers, blower-vacuums, chainsaws, string trimmers, and underground, hose, and hose-end retail irrigation products sold in Australia and New Zealand.