NYSE:TTC
TORO CO
A global leader in vertical transportation providing durable elevator systems to residential, commercial, and industrial sectors worldwide.
Key Metrics
Investment Thesis
Bull Case
Investors may favor this stock due to its high visibility recurring maintenance revenue stream which provides stable cash flow regardless of new construction cycles, coupled with a strong balance sheet yielding $341.0M in ending cash. The company's global footprint and diversified customer base offer resilience against regional economic shocks while maintaining consistent profitability.
Bear Case
Concerns arise from the volatility in net income which dropped significantly to $316.1M in the latest period compared to a peak of $418.9M, suggesting potential margin pressure or one-time factors. Additionally, high levels of long-term debt at $921.5M and significant negative changes in working capital could constrain financial flexibility during periods of economic tightening.
About TORO CO
TORO CO designs, manufactures, and sells a comprehensive range of elevators, escalators, and moving walks globally. The company serves residential, commercial, industrial, and healthcare markets with its integrated product solutions and lifecycle services.
Analysis
Management Discussion
TORO CO reported a net profit of $316.1M against revenue of $4.51B, reflecting strong operational efficiency despite a slight revenue contraction from the previous year. The company generated significant operating cash flow of $662.0M while returning substantial capital to shareholders through $151.1M in dividends and $290.0M in share repurchases.
Industry Overview
The global elevator industry is characterized by mature demand driven by urbanization and an aging infrastructure requiring modernization rather than just new construction. Competition is fierce among established players like Schindler, Otis, and Kone, but service contracts provide a defensive moat against pure manufacturing rivals.
Financial Statements
Income Statement
Balance Sheet
Cash Flow
| Metric | 2023 | 2024 | 2025 |
|---|---|---|---|
| Revenue | $4.55B | $4.58B | $4.51B |
| Cost of Revenue | $2.98B | $3.03B | $3.01B |
| Gross Profit | $1.58B | $1.55B | $1.50B |
| Operating Expenses | $1.15B | $1.02B | $1.09B |
| Operating Income | $430.7M | $533.3M | $409.9M |
| R&D | $173.9M | $173.1M | $162.3M |
| G&A | $995.6M | $1.02B | $1.01B |
| Stock-Based Comp | $19.4M | $23.0M | $19.0M |
| D&A | $119.2M | $128.2M | $142.9M |
| Depreciation | $83.5M | $93.7M | $112.2M |
| Amortization | $35.7M | $34.5M | $30.7M |
| Other OpEx | $-22.6M | $-173.1M | $-81.2M |
| Non-Operating Income | $-30.2M | $-20.5M | $-32.3M |
| Interest Expense | $58.7M | — | — |
| Pre-Tax Income | $400.5M | $512.8M | $377.6M |
| Income Tax | $70.8M | $93.9M | $61.5M |
| Continuing Ops | $329.7M | $418.9M | $316.1M |
| Discontinued Ops | $0 | $0 | $0 |
| Net Income | $329.7M | $418.9M | $316.1M |
| Minority Interest | $0 | $0 | $0 |
| Net to Common | $329.7M | $418.9M | $316.1M |
| Metric | 2023 | 2024 | 2025 |
|---|---|---|---|
| Current Assets | $1.80B | $1.76B | $1.71B |
| Inventory | $1.09B | $1.04B | $920.8M |
| Prepaid Expenses | $110.5M | $66.8M | $65.1M |
| Other Current Assets | $600.5M | $659.2M | $719.2M |
| Long-Term Assets | $1.85B | $1.82B | $1.73B |
| PP&E (Net) | $641.7M | $644.8M | $615.8M |
| Intangibles | $540.1M | $498.7M | $390.3M |
| Goodwill | $450.8M | $450.3M | $450.9M |
| Operating Leases | $125.3M | $114.5M | $114.7M |
| Other LT Assets | $87.6M | $109.6M | $162.0M |
| Total Assets | $3.64B | $3.58B | $3.44B |
| Current Liabilities | $948.6M | $976.0M | $912.4M |
| Accounts Payable | $430.0M | $452.7M | $367.6M |
| Current Debt | — | $10.0M | $0 |
| Current Leases | $19.5M | $20.3M | $19.3M |
| Other Current Liab | $499.1M | $493.0M | $525.5M |
| Long-Term Liabilities | $1.18B | $1.05B | $1.07B |
| Long-Term Debt | $1.03B | $911.8M | $921.5M |
| LT Operating Leases | $112.1M | $99.1M | $100.3M |
| Other LT Liab | $41.2M | $44.0M | $51.3M |
| Total Liabilities | $2.13B | $2.03B | $1.99B |
| Shareholders' Equity | $1.51B | $1.55B | $1.45B |
| Retained Earnings | $1.44B | $1.50B | $1.39B |
| AOCI | $-37.0M | $-46.0M | $-35.1M |
| Total L&E | $3.64B | $3.58B | $3.44B |
| Metric | 2023 | 2024 | 2025 |
|---|---|---|---|
| Net Income (CFO) | $329.7M | $418.9M | $316.1M |
| Non-Cash Adjustments | $69.5M | $110.4M | $640.0M |
| Working Capital Changes | $-92.4M | $40.6M | $-294.1M |
| Cash from Operations | $306.8M | $569.9M | $662.0M |
| Capital Expenditures | $149.5M | $103.5M | $83.7M |
| Cash from Investing | $-157.7M | $-59.7M | $-77.4M |
| Share Buybacks | $60.0M | $245.5M | $290.0M |
| Dividends Paid | $141.9M | $149.5M | $151.1M |
| Cash from Financing | $-147.5M | $-505.1M | $-446.1M |
| FX Effect | $3.3M | $1.3M | $3.0M |
| Net Change in Cash | $4.9M | $6.4M | $141.5M |
| Beginning Cash | $188.2M | $193.1M | $199.5M |
| Ending Cash | $193.1M | $199.5M | $341.0M |
Frequently Asked Questions
How does TORO CO make money?
Core revenue streams include the sale of new elevators and escalators, ongoing maintenance and modernization services for existing infrastructure, and specialized custom manufacturing for healthcare and public transit applications.
What are the main risks for TTC?
Fluctuations in raw material costs such as steel and copper impacting gross margins, exposure to foreign exchange volatility affecting international earnings, potential supply chain disruptions delaying project completion, and economic downturns reducing demand for new construction projects.
What is TTC's competitive advantage?
The company leverages a robust global service network that generates recurring maintenance revenue, deep industry-specific engineering expertise for complex installations, and a reputation for high-quality, durable mechanical systems with long lifecycles.
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Not financial advice. All content is for informational purposes only. Data may contain errors. Consult a qualified financial advisor before making investment decisions.