Toro Company Stock Continues to Get Pummeled

TTC is just 6% shy of a 52-week low right now

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The Toro Company (NYSE:TTC) is an American company that primarily manufactures lawn mowers, snow blowers, and irrigation system supplies for commercial, public, and residential uses. TTC's products offer solutions for the outdoor environment including turf and landscape maintenance, snow and ice management, underground utility construction, rental and specialty construction, and irrigation and outdoor lighting solutions.

Toro stock has dropped approximately 28% in price year-over-year and TTC is currently trading 29% off of its 52-week high of $117.92, reached last May. Additionally, shares of TTC have dropped in price 16% year-to-date and Toro stock is currently up just 6% from their 52-week low of $79.30, which was reached during the last trading session of April.

From a fundamental point of view, Toro Company is a fairly well-rounded company with a decent and consistent growth rate. For fiscal 2021, TTC reported 17% revenue growth and 24% net income growth. The manufacturer has also managed to grow their annual revenues and net income by 53% and 35%, respectively, since fiscal 2018. In addition, Toro is expected to end fiscal 2022 with 12.6% revenue growth and 11.6% earnings growth, as well as increase their revenues by 5.8% and earnings by 19.1% for fiscal 2023. Moreover, The Toro Company offers a dividend yield of 1.37% with a forward dividend of $1.12.

However, the biggest issue with Toro stock lies in its valuation. Despite the business’ solid growth expectations, TTC continues to trade at a rich forward price-earnings ratio of 20.04 and a relatively high price-sales ratio of 2.15, which could cause Toro stock to drop even further in the short-term.

Toro also runs the risk of having $1.17 billion in total debt on their balance sheet and just $192.96 in cash. Nonetheless, TTC’s stable and growing business makes it a viable option for long-term investors, and even more so if Toro stock continues to downtrend. Ideally, investors will want to pick up shares of the company under $70.

 

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