Why Is Toll Brothers (TOL) Down 10.7% Since Last Earnings Report?

Toll Brothers reported fiscal Q3 2026 results that beat estimates on both earnings and revenue, yet the stock has fallen 10.7% since the release as investors weigh deteriorating fundamentals. Home deliveries dropped 10% year-over-year, while average home prices climbed 2.3%. Both revenue and earnings declined on a year-over-year basis despite the beat.

The builder faces mounting cost pressures. Increased construction costs and higher selling, general, and administrative expenses are squeezing margins, overshadowing the modest pricing gains. Since the earnings report, analyst estimates have trended downward, prompting Zacks Investment Research to assign TOL a Rank #3 (Hold) rating with expectations for in-line market performance.

The post-earnings selloff reflects concern that volume declines are outpacing TOL's ability to offset through pricing power, particularly as the expense base expands.