A Fresh Look at Toromont Industries (TSX:TIH) Valuation Following AVL Acquisition and Data Center Expansion

Toromont Industries (TSX:TIH) just posted a slight revenue bump for Q2 2025, with rental and product support segments showing improvement and its recent AVL acquisition factoring in. The new Charlotte, North Carolina facility highlights its push into data centers.

See our latest analysis for Toromont Industries.

Toromont’s share price has surged 41% so far in 2025, reflecting renewed confidence around its AVL acquisition and data center expansion. Its one-year total shareholder return of 22% shows steady outperformance even as broader economic headwinds persist.

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With Toromont’s recent run and optimism building around its moves in data centers, investors now face a pressing question: is there still room for the stock to grow, or has the market already priced in what’s next?

Most Popular Narrative: 6.9% Overvalued

Toromont Industries is currently trading at CA$159.00, slightly above the most widely followed narrative fair value estimate of CA$148.78. This sets up an intriguing debate on what is driving the stock’s premium and prompts a closer look at the bullish drivers behind the consensus.

The rapid ramp-up of AVL's production capacity, ongoing integration, and accelerated facility expansion in the U.S. positions Toromont to capitalize on booming North American data center infrastructure investment. This lays the foundation for sizable future revenue and margin growth as AVL transitions from near-term non-cash acquisition charges to accretive earnings.

Read the complete narrative.

Curious how this narrative justifies such a lofty price? The calculation pivots on ambitious shifts in margin trajectory, bold growth strategies, and a future earnings figure that could surprise many. Discover which underlying forecasts have shaped this market consensus. There is more complexity in these numbers than meets the eye.

Result: Fair Value of $148.78 (OVERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, persistent cost inflation and slower order intake could challenge Toromont’s growth narrative. These factors may put margin expansion and future earnings at risk.

Find out about the key risks to this Toromont Industries narrative.

Build Your Own Toromont Industries Narrative

If you see the story differently or prefer to dive into the data yourself, it just takes a few minutes to build your own perspective. Do it your way

A great starting point for your Toromont Industries research is our analysis highlighting 1 key reward and 1 important warning sign that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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