Is Toro a Value Opportunity After Recent Share Price Weakness in 2025?

• Wondering if Toro is quietly turning into a value opportunity after a rough patch? This breakdown will help you decide whether the current price makes sense or not.
• Despite being down roughly 7.3% year to date and 14.7% over the past year, the stock has ticked up about 2.8% in the last week and 1.4% over the last month, hinting that sentiment may be starting to shift.
• Recent headlines have focused on how Toro is navigating a slower residential and professional equipment market while leaning on its established brand and broad dealer network to support long term demand. At the same time, investors are watching how management balances cost controls with investments in innovation, particularly in electrification and smart irrigation.
• Toro currently scores a 4/6 on our valuation checks, suggesting the market might be underappreciating parts of the story. You can see the full breakdown in our valuation score. Next, we will unpack what that means through different valuation approaches, then finish with a more intuitive way to think about fair value that can cut through all the noise.

Find out why Toro's -14.7% return over the last year is lagging behind its peers.

Approach 1: Toro Discounted Cash Flow (DCF) Analysis

A Discounted Cash Flow model estimates what a business is worth today by projecting its future cash flows and discounting them back to the present. For Toro, the model uses a 2 stage Free Cash Flow to Equity approach based on cash flow projections.

Toro generated roughly $464 million in free cash flow over the last twelve months, providing a base for the forecast. Analyst estimates included in the model point to free cash flow rising to about $528 million by 2028, with further growth out to 2035 extrapolated by Simply Wall St rather than explicitly guided by management. These future cash flows, in dollars, are then discounted to today to account for risk and the time value of money.

On this basis, the DCF model arrives at an intrinsic value of about $89.59 per share. At the time of the analysis, this implied that the stock was trading at roughly an 18.2% discount to its estimated fair value.

Result: UNDERVALUED

Our Discounted Cash Flow (DCF) analysis suggests Toro is undervalued by 18.2%. Track this in your watchlist or portfolio, or discover 907 more undervalued stocks based on cash flows.

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for Toro.

Approach 2: Toro Price vs Earnings

For a consistently profitable business like Toro, the price to earnings ratio is a useful way to judge value because it directly compares what investors pay today with the profits the company is generating right now.

In general, faster growing and lower risk companies deserve a higher PE ratio, while slower growth or higher uncertainty should pull that multiple down. So a “normal” or “fair” PE reflects a balance between how quickly earnings can rise and how dependable those earnings are likely to be.

Toro currently trades on about 21.6x earnings, which is below the broader Machinery industry average of roughly 25.7x and slightly above the peer group average of around 19.2x. Simply Wall St’s proprietary Fair Ratio for Toro is about 23.9x. This reflects what investors might reasonably pay given Toro’s specific mix of earnings growth, margins, industry position, size and risk profile.

Because the Fair Ratio builds these company specific drivers into a single benchmark, it provides a more tailored reference point than a simple comparison with peers or the sector as a whole. With the market multiple at 21.6x and the Fair Ratio at 23.9x, Toro screens as modestly cheap on this metric.

Result: UNDERVALUED

PE ratios tell one story, but what if the real opportunity lies elsewhere? Discover 1446 companies where insiders are betting big on explosive growth.

Upgrade Your Decision Making: Choose your Toro Narrative

Earlier we mentioned that there is an even better way to understand valuation, so let us introduce you to Narratives, which are simple stories investors create about a company that sit behind the numbers like fair value, and future revenue, earnings and margin estimates. They link what you believe about a business to a concrete financial forecast and, ultimately, a fair value you can compare with today’s share price to decide whether to buy, hold or sell.

On Simply Wall St’s Community page, millions of investors use Narratives as an easy, accessible tool to spell out why they think Toro’s automation, electrification and productivity investments will either support steady 2 to 3 percent annual revenue growth and higher margins, or be held back by macro, weather and competitive risks. Each perspective is automatically turned into a dynamic valuation that updates as fresh news, earnings and guidance arrive.

For example, one Toro Narrative might lean into the consensus view that those growth drivers can justify a fair value near 92.60. A more cautious Narrative could focus on residential weakness and weather volatility to arrive at a meaningfully lower fair value, showing how two reasonable stories can produce very different target prices from the same starting facts.

Do you think there's more to the story for Toro? Head over to our Community to see what others are saying!

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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