Toro (TTC): Examining Valuation as Analysts Weigh End-Market Challenges and Competitive Pressures

The Toro Company (TTC) is navigating ongoing end-market challenges that have led to annual sales declines and a shrinking free cash flow margin. These factors point to intensifying competition and greater capital needs. Investors are monitoring these trends closely.

See our latest analysis for Toro.

Toro’s share price has lost ground this year, with a year-to-date decline of 6.44% and a 12-month total shareholder return of -7.79%. Lingering competitive pressures and concerns about profitability have weighed on momentum, leading to fading performance over both short and longer timeframes.

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After such a period of weak returns and ongoing competitive uncertainty, does Toro’s current valuation offer investors potential upside, or is the market already fully reflecting the company’s future prospects?

Most Popular Narrative: 20% Undervalued

Toro's most widely followed narrative pins fair value at $92.60, a substantial premium to the last close price of $73.98. This difference highlights analysts' expectations that the market is underestimating Toro's forward earnings trajectory.

Ongoing investments and recent product launches in smart, connected, and autonomous turf and irrigation solutions (for example, GeoLink Mow Autonomous Fairway Mower and TurfRad moisture sensing) directly position Toro to benefit from increasing automation in landscaping and heightened focus on water conservation, supporting future premium product revenue growth and higher net margins.

Read the complete narrative.

What numbers power this bullish narrative? Find out which mix of future revenues, profit margins, and ambitious technology-driven expansion form the core of this high valuation. You might be surprised at just how much growth and operational transformation is priced into the fair value calculation.

Result: Fair Value of $92.60 (UNDERVALUED)

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

However, persistent weakness in residential demand or increased input costs could challenge Toro’s path to higher margins and long-term growth. This could test the bullish outlook.

Find out about the key risks to this Toro narrative.

Build Your Own Toro Narrative

If you have a different take or want to dig even deeper into the data, it's quick and easy to build your own narrative from the ground up. Do it your way.

A great starting point for your Toro research is our analysis highlighting 5 key rewards 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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