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Relative valuation derived from Industrials sector median benchmarks. Model weights: EV/EBITDA (40%), P/B (35%), P/S (25%). Multiples adjusted for extreme outliers and non-recurring volatility.
Auditing capital efficiency...
Quality Profile Audit
Score: 50GRADE C+
Composite assessment of profitability, capital efficiency, and financial strength. Top-tier entities demonstrate sustainable cash flow generation.
Return on Equity
Profit generated per dollar of shareholder equity
21.9%
Sector: 8.9%
Dividend Analysis audit
INCOME
2.06%
Trailing Yield
$2.06
Per $100 Invested
Solid dividend yield for income-focused strategies.
Est. Payout Ratio
60%MID
Analyst Projections
Analyst Consensus
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Based on our 6-factor quantitative model, TORO CO (TTC) receives a "Hold" rating with a composite score of 51.4/100, ranked #766 out of 4446 stocks. Key factor scores: Quality 50/100, Value 41/100, Momentum 61/100. This is quantitative analysis only — not investment advice.
TORO CO (TTC) Stock Analysis — April 2026 Rating, Price, and Forecast
Company Overview — What Does TORO CO Do?
The 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. TORO CO (TTC) is classified as a mid-cap stock in the Industrials sector, specifically within the Machinery industry. The company is led by CEO Richard M. Olson and employs approximately 11,300 people, headquartered in Bloomington, Minnesota. With a market capitalization of $9.1B, TTC is one of the notable companies in the Industrials sector.
TORO CO (TTC) Stock Rating — Hold (April 2026)
As of April 2026, TORO CO receives a Hold rating with a composite score of 51.4/100 and 3 out of 5 stars from the Blank Capital Research quantitative model.TTC ranks #766 out of 4,446 stocks in our coverage universe. Within the Industrials sector, TORO CO ranks #131 of 752 stocks, placing it in the top quartile of its Industrials peers. The rating is generated by a multi-factor model that weighs quality (30%), momentum (25%), value (15%), investment (10%), stability (10%), and short interest (10%).
TTC Stock Price and 52-Week Range
TORO CO (TTC) currently trades at $96.87. The stock lost $1.26 (1.3%) in the most recent trading session. The 52-week high for TTC is $105.19, which means the stock is currently trading -7.9% from its annual peak. The 52-week low is $62.34, putting the stock 55.4% above its annual trough. Recent trading volume was 493K shares, suggesting relatively thin trading activity.
Is TTC Overvalued or Undervalued? — Valuation Analysis
TORO CO (TTC) carries a value factor score of 41/100 in the Blank Capital model, indicating fair valuation relative to historical norms. The trailing price-to-earnings ratio is 29.31x, compared to the Industrials sector average of 28.33x — a premium of 3%. The price-to-book ratio stands at 6.42x, versus the sector average of 2.23x. The price-to-sales ratio is 2.03x, compared to 0.50x for the average Industrials stock. On an enterprise value basis, TTC trades at 25.18x EV/EBITDA, versus 5.70x for the sector.
Overall, TTC's valuation appears roughly in line with sector benchmarks, suggesting the market is pricing the stock fairly given its current fundamentals and growth trajectory. Neither deep value nor significantly overpriced, the stock occupies a middle ground on valuation.
TORO CO Profitability — ROE, Margins, and Quality Score
TORO CO (TTC) earns a quality factor score of 50/100, indicating solid business quality with consistent operational execution. The return on equity (ROE) is 21.9%, compared to the Industrials sector average of 8.9%, which demonstrates strong shareholder value creation. Return on assets (ROA) comes in at 8.4% versus the sector average of 3.3%.
On a margin basis, TORO CO reports gross margins of 33.3%, compared to 35.8% for the sector. The operating margin is 8.8% (sector: 6.2%). Net profit margin stands at 6.7%, versus 3.9% for the average Industrials stock. Revenue growth is running at -10.4% on a trailing basis, compared to 6.4% for the sector. The overall profitability profile is adequate, though there may be room for margin expansion.
TTC Debt, Balance Sheet, and Financial Health
TORO CO has a debt-to-equity ratio of 76.0%, compared to the Industrials sector average of 70.0%. Leverage is within a manageable range for the industry, though investors should monitor debt trends over time. The current ratio is 1.69x, suggesting adequate working capital coverage. Total debt on the balance sheet is $1.07B. Cash and equivalents stand at $341M.
TTC has a beta of 0.78, meaning it is less volatile than the S&P 500, making it a relatively defensive holding. The stability factor score for TORO CO is 81/100, indicating low-volatility characteristics and consistent price behavior that appeals to risk-averse investors.
TORO CO Revenue and Earnings History — Quarterly Trend
In TTM 2026, TORO CO reported revenue of $4.48B and earnings per share (EPS) of $0.69. Net income for the quarter was $311M. Gross margin was 33.3%. Operating income came in at $405M.
In Q1 2026, TORO CO reported revenue of $1.04B and earnings per share (EPS) of $0.69. Net income for the quarter was $68M. Gross margin was 32.5%. Revenue grew 4.2% year-over-year compared to Q1 2025. Operating income came in at $87M.
In FY 2025, TORO CO reported revenue of $4.51B and earnings per share (EPS) of $3.18. Net income for the quarter was $316M. Gross margin was 33.4%. Revenue grew -1.6% year-over-year compared to FY 2024. Operating income came in at $410M.
In Q3 2025, TORO CO reported revenue of $1.13B and earnings per share (EPS) of $0.54. Net income for the quarter was $54M. Gross margin was 33.8%. Revenue grew -2.2% year-over-year compared to Q3 2024. Operating income came in at $65M.
Over the past 8 quarters, TORO CO has demonstrated a growth trajectory, with revenue expanding from $1.16B to $4.48B. Investors analyzing TTC stock should weigh these quarterly trends alongside the valuation and quality metrics discussed above.
TTC Dividend Yield and Income Analysis
TORO CO (TTC) currently pays a dividend yield of 2.1%. At this yield, a $10,000 investment in TTC stock would generate approximately $$206.00 in annual dividend income. The net margin of 6.7% provides reasonable coverage for the dividend, though investors should monitor payout sustainability.
TTC Momentum and Technical Analysis Profile
TORO CO (TTC) has a momentum factor score of 61/100, reflecting neutral trend characteristics. The stock is neither significantly outperforming nor underperforming the broader market on a momentum basis. The investment factor score is 36/100, which measures capital allocation efficiency and asset growth patterns. The short interest score of 31/100 signals elevated short interest, which can indicate bearish sentiment among institutional investors.
TTC vs Competitors — Industrials Sector Ranking and Peer Comparison
Comparing TTC against the S&P 500 benchmark is also instructive for understanding relative performance. Investors can view the full TTC vs S&P 500 (SPY) comparison to assess how TORO CO stacks up against the broader market across all factor dimensions.
TTC Next Earnings Date
No upcoming earnings date has been announced for TORO CO (TTC) at this time. Check the earnings calendar for the latest scheduling updates across all stocks in our coverage universe.
Should You Buy TTC? — Investment Thesis Summary
TORO CO presents a balanced picture with arguments on both sides. Price momentum is positive at 61/100, suggesting the trend favors buyers. Low volatility (stability score 81/100) reduces downside risk.
In summary, TORO CO (TTC) earns a Hold rating with a composite score of 51.4/100 as of April 2026. The rating is derived from the Blank Capital Research methodology, which combines six factor dimensions into a single quantitative ranking. Investors should consider these quantitative signals alongside their own fundamental research, risk tolerance, and investment time horizon before making buy or sell decisions on TTC stock.
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Institutional Research Dossier
TORO CO (TTC) Deep Dive Analysis
Published on March 24, 2026
Action RatingHold
Sections
Executive Summary
We maintain a Hold rating on The Toro Company (TTC). While Toro possesses a strong brand and leading market positions in several segments of the professional and residential equipment markets, its current valuation appears stretched relative to its growth prospects and sector peers. The company's recent revenue decline and elevated P/E ratio suggest that the market may be overestimating its near-term earnings potential.
The primary concern revolves around Toro's high valuation multiples, particularly its P/E and EV/EBITDA ratios, which significantly exceed the industrial sector averages. Despite a solid track record of profitability and a decent ROE, the current price does not offer a compelling entry point, especially considering the recent revenue contraction. Investors should await a more favorable valuation or evidence of a sustained turnaround in revenue growth before considering a more bullish stance.
Business Strategy & Overview
The Toro Company operates through two primary segments: Professional and Residential. The Professional segment, which generates the majority of revenue, focuses on turf and landscape equipment, irrigation solutions, and underground construction equipment. This segment caters to golf courses, sports fields, municipalities, and contractors, selling through a network of distributors and dealers, as well as directly to government entities and rental companies. The Residential segment offers walk power mowers, riding mowers, snow throwers, and related products to homeowners through retailers and online channels.
Toro's strategic positioning centers on maintaining leading market shares in its core segments through product innovation, strategic acquisitions, and a strong distribution network. The company invests in research and development to introduce new products and technologies that enhance efficiency, sustainability, and user experience. Recent examples include electric and autonomous mowing solutions, reflecting a commitment to adapting to evolving market demands and environmental concerns.
The company's acquisition strategy focuses on expanding its product portfolio and geographic reach. These acquisitions often target companies with complementary technologies or market access, allowing Toro to broaden its offerings and penetrate new customer segments. A key aspect of Toro's strategy is its focus on aftermarket parts and service, which provides a recurring revenue stream and strengthens customer relationships.
Toro operates in a competitive landscape, facing established players like Deere & Company, Kubota, and Stanley Black & Decker. The industry is influenced by factors such as economic conditions, weather patterns, and government regulations related to emissions and environmental standards. Toro's ability to navigate these challenges and capitalize on growth opportunities will be crucial to its long-term success.
Execution Benchmarks audit
Revenue Growth
YOY expansion rate
-10.4%
Sector: 6.4%
-263% VS SCTR
Economic Moat Analysis
Toro possesses a Narrow economic moat, primarily derived from its brand reputation and established distribution network. The Toro brand is well-recognized and respected in the professional turf and landscape equipment market, built over decades of providing reliable and high-quality products. This brand recognition allows Toro to command premium pricing and maintain customer loyalty, particularly among professional users who rely on the equipment for their livelihood.
The company's extensive distribution network, comprising independent dealers and distributors, provides a significant competitive advantage. This network offers localized sales, service, and support, which is crucial for maintaining customer relationships and ensuring timely maintenance and repairs. Establishing and maintaining such a network requires significant investment and expertise, creating a barrier to entry for new competitors.
However, the moat is not particularly wide due to the presence of strong competitors with established brands and distribution networks. Deere & Company, for example, has a broader product portfolio and a larger global presence, posing a significant competitive threat. Furthermore, the commoditization of certain residential products and the increasing availability of lower-priced alternatives can erode Toro's pricing power in the residential segment.
While Toro's brand and distribution network provide a competitive edge, they are not insurmountable. Sustained investment in innovation, customer service, and strategic acquisitions will be necessary to maintain and potentially widen the moat over time. The company's ability to adapt to changing market dynamics and technological advancements will also be critical to its long-term competitive positioning.
Financial Health & Profitability
Toro's financial health presents a mixed picture. While the company exhibits strong profitability metrics, recent revenue declines raise concerns about its growth trajectory. The company's ROE of 21.9% significantly exceeds the industrial sector average of 9.2%, indicating efficient utilization of equity. Similarly, its operating margin of 8.8% and net margin of 6.7% are higher than the sector averages of 6.2% and 3.7%, respectively, demonstrating effective cost management and pricing strategies.
However, the company's revenue growth has been negative, with a -10.4% decline compared to the sector's 6.6% growth. This contraction suggests potential challenges in market demand, competitive pressures, or execution issues. Analyzing the quarterly financial history reveals a fluctuating revenue trend, with Q1 FY2026 showing a revenue of $1.04B, similar to Q1 FY2024 ($1.00B) but lower than Q2 FY2025 ($1.32B) and Q3 FY2025 ($1.13B). This inconsistency warrants further investigation to understand the underlying drivers.
Toro's balance sheet reflects a moderate level of leverage, with a debt-to-equity ratio of 76.00, slightly higher than the sector average of 70.00. The current ratio of 1.69 indicates adequate liquidity to meet short-term obligations. The company's free cash flow generation is robust, with a TTM FCF of $578.54M, providing ample resources for debt repayment, acquisitions, and shareholder returns.
Overall, Toro's financial health is characterized by strong profitability and cash flow generation, offset by recent revenue declines and a moderate level of leverage. The company's ability to restore revenue growth and maintain its profitability metrics will be crucial to its long-term financial performance. Monitoring key indicators such as revenue growth, gross margin, and operating margin will be essential for assessing the company's financial health going forward.
Valuation Assessment
Toro's valuation appears stretched based on several key metrics. The company's P/E ratio of 134.7x is significantly higher than the industrial sector average of 27.7x, suggesting that the stock is trading at a premium to its earnings. Similarly, its EV/EBITDA ratio of 28.9x is substantially above the sector average of 5.7x, indicating that the market is assigning a high value to the company's enterprise value relative to its earnings before interest, taxes, depreciation, and amortization.
Given the recent revenue decline of -10.4%, the high valuation multiples are particularly concerning. While Toro has historically demonstrated strong profitability and cash flow generation, the current valuation may not be justified if the company's growth prospects remain subdued. Investors may be pricing in a significant turnaround in revenue growth, which is not yet evident in the company's financial performance.
The company's free cash flow yield, while not explicitly provided, can be inferred from the FCF of $578.54M and market cap of $9.01B, resulting in a yield of approximately 6.4%. This yield is reasonable but not particularly compelling, especially considering the risks associated with the company's revenue decline and high valuation multiples.
Compared to its historical valuation, Toro's current multiples are elevated. The company's P/E ratio has fluctuated over time, but the current level is significantly higher than its historical average. This suggests that the market may be overestimating the company's near-term earnings potential or assigning a premium to its brand and market position.
In summary, Toro's valuation appears expensive relative to its growth prospects and sector peers. The high P/E and EV/EBITDA ratios, coupled with the recent revenue decline, suggest that the stock may be overvalued. Investors should exercise caution and await a more favorable valuation or evidence of a sustained turnaround in revenue growth before considering a more bullish stance.
Risk & Uncertainty
Several risks and uncertainties could impact Toro's business and financial performance. A key risk is the cyclical nature of the industries it serves, particularly the professional turf and landscape equipment market. Economic downturns can lead to reduced demand for these products, as municipalities and businesses cut back on capital expenditures and maintenance budgets. Weather patterns also play a significant role, with droughts or excessive rainfall potentially impacting demand for irrigation solutions and other related products.
Competition is another significant risk. Toro faces established players like Deere & Company and Kubota, as well as smaller, more specialized competitors. Increased competition could lead to pricing pressures and reduced market share. The company's ability to differentiate its products and maintain its brand reputation will be crucial to mitigating this risk.
Supply chain disruptions and inflationary pressures could also negatively impact Toro's profitability. Rising raw material costs and transportation expenses could squeeze margins, particularly if the company is unable to pass these costs on to customers. Geopolitical risks and trade tensions could further exacerbate supply chain challenges.
The company's debt level, while manageable, could pose a risk if interest rates rise or if the company experiences a significant decline in earnings. Higher interest expenses could reduce profitability and limit the company's financial flexibility. Furthermore, acquisitions, while potentially beneficial in the long run, can create integration challenges and increase financial leverage.
Bulls Say / Bears Say
The Bull Case
BULL VIEWToro's strong brand and leading market positions in the professional turf and landscape equipment market provide a durable competitive advantage, allowing it to command premium pricing and maintain customer loyalty.
BULL VIEWThe company's focus on innovation and strategic acquisitions will drive long-term growth, particularly in emerging areas such as electric and autonomous mowing solutions.
The Bear Case
BEAR VIEWToro's high valuation multiples, particularly its P/E and EV/EBITDA ratios, are unsustainable given the recent revenue decline and the cyclical nature of its end markets.
BEAR VIEWIncreased competition and potential supply chain disruptions could erode Toro's profitability and market share, leading to a significant correction in its stock price.
About the Author
Marques Blank
Founder & Chief Investment Officer, Blank Capital
Marques brings 15 years of institutional finance and investing experience, having overseen financial planning for a $1.6B defense business unit. He developed the proprietary 6-factor quantitative model used to score TTC and 4,400+ other equities.
TORO CO exhibits a 210% valuation premium relative to institutional benchmarks. This represents a potential valuation overextension based on current multiples.
Return on Assets
Efficiency of asset utilization
8.4%
Sector: 3.3%
Gross Margin
Pricing power and cost efficiency
33.3%
Sector: 35.8%
Operating Margin
Core business profitability
8.8%
Sector: 6.2%
Net Margin
Bottom-line profitability
6.7%
Sector: 3.9%
Factor Methodology
The Quality factor evaluates the persistence and magnitude of cash flows. Companies with scores >70 exhibit superior competitive moats and financial resilience through economic cycles.
Sector Avg Yield0.00%
Yield Delta—
Income Projection audit
A $10,000 investment would generate approximately $206 annually in dividends at the current trailing rate.
