Subprime mortgage crises. Stagnant interest rates. Stealth inflation. Housing woes. Put 'em all together, and it's an uneasy time to be a Toll Brothers (NYSE:TOL) shareholder. Will tomorrow's earnings news make things any better, or just darken the gloom?

After the news comes out, we'll have time a-plenty to dissect it. But in these few hours before we begin obsessing over Toll's short-term troubles, let's take a moment to review what investors think about it as a long-term investment. Our tool in this endeavor: Motley Fool CAPS, where we poll more than 29,000 rated investors for their views on well over 4,000 companies, Toll Brothers among them. Here's what Fools have to say about the company.

Up or down?
Just over 500 investors have submitted ratings on Toll Brothers. Their verdict: This stock should be condemned.

More CAPS investors expect Toll Brothers to lag the market than to lead it. More ominously for shareholders, it seems the better an investor you are, the less likely you think Toll will outperform the market. Just 41% of CAPS All-Stars are optimistic. Is it any wonder, then, that the stock gets just one CAPS star out of a possible five?

Nor are investors differentiating among homebuilders in their pessimism:

Home Builder Group

CAPS Rating

Toll Brothers


Centex (NYSE:CTX)


DR Horton (NYSE:DHI)




Lennar (NYSE:LEN)


Pulte (NYSE:PHM)


Ryland (NYSE:RYL)


Wall Street vs. Main Street
Up on Wall Street, though, where investors have lived through a housing cycle or two, the professionals take a more sanguine view of things. Of the six analysts tracking Toll Brothers, whom we, in turn, track, two-thirds still think the stock will beat the market from here. Then again, after lagging the S&P 500 by 11 percentage points over the last 52 weeks, this stock has some serious catching up to do.

Bull pitch
The top-rated bell-ringer for Toll Brothers on CAPS calls this stock "a no-brainer" (he means that in a good way). Says this All-Star investor: Toll Brothers "has been battered by the decline in housing but it's an overreaction. This housing situation is not going to last forever so I think the market is being short sighted. They tend to build high end homes at $500K+ which makes them a little less sensitive to the vagaries of the housing market. They also have a great inventory of land that is getting harder and harder to come by." Moreover, "the management team is sound and has delivered a tripling of revenue over the last 6 years."

Bear pitch
The bear baiters on CAPS couldn't disagree more with that last point. Rants the top-rated anti-Toll pitcher: "Shady bastards. I hate this company. I hate it a lot. They remind me of the truck dealerships around here. Every month 'is truck month! Come in for deals!' With TOL, every month is 'the market bottom.' Every single month. After five years of an unprecedented bull run that included the invention of new financial instruments to inflate the bubble even higher, TOL called a 'market bottom' one month into the recession. Ridiculous. You can lie to auditors but don't sit there and repeatedly lie to potential investors who don't know what they are getting into. Seriously, what's the purpose? You already have your $30 million salary. Just take that and be happy."

Who said that?
To learn the identities of these diametrically opposed investors, to add your own thoughts to the discussion, and to explore the plethora of additional financial data we've put together on the company, just click here.

Fool contributor Rich Smith does not own shares of any company named above. You can find him on CAPS, publicly pontificating under the handle TMFDitty, where he's currently ranked No. 649 out of more than 29,000 raters.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.