Forestar Group (FOR) AI Stock Analysis

• Market Cap: $1.28B
• Dividend Yield: N/A
• Average Volume (3M): 125.84K
• Price to Earnings (P/E): 7.7
• Beta (1Y): 0.73
• Revenue Growth: 10.13%
• EPS Growth: -18.11%
• Country: US
• Employees: 440
• Sector: Real Estate
• Sector Strength: 53
• Industry: Real Estate - Development
• EPS (TTM): 1.70
• Shares Outstanding: 50,885,326
• 10 Day Avg. Volume: 142,295
• 30 Day Avg. Volume: 125,837
• PEG Ratio: -0.44
• Price to Book (P/B): 0.85
• Price to Sales (P/S): 0.81
• P/FCF Ratio: -6.85
• Enterprise Value/Market Cap: 1.40
• Enterprise Value/Revenue: 1.08
• Enterprise Value/Gross Profit: 4.95
• Enterprise Value/Ebitda: 8.25
• 1Y Price Target: $32.00
• Price Target Upside: 26.93% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 4
• EPS Forecast (FY): 3.08
• Revenue Forecast (FY): $1.66B

• Rating: 71 Outperform
• Price Target: $28.00 ▲(11.07% Upside)

Forestar Group's overall stock score is driven by strong financial performance and attractive valuation. The company's robust revenue growth and strategic investments are significant positives. However, challenges in cash flow management and market pressures in key regions slightly temper the outlook.

Positive Factors

Revenue Growth

The company's consistent revenue growth indicates strong market demand and effective business strategies, enhancing its competitive position.

Strategic Investments

Strategic investments in land acquisition and market expansion enhance Forestar's growth potential and market reach.

Liquidity Position

A strong liquidity position provides financial flexibility to invest in growth opportunities and weather economic uncertainties.

Negative Factors

Cash Flow Challenges

Negative cash flows could limit Forestar's ability to fund operations and growth initiatives, posing a risk to long-term financial health.

Decreased Gross Profit Margin

A declining gross profit margin may indicate rising costs or pricing pressures, potentially impacting profitability.

Market Pressure in Key Regions

Market pressures in key regions like Texas and Florida could hinder growth and profitability in these important markets.

Forestar Group Business Overview & Revenue Model

Company Description

Forestar Group Inc. operates as a residential lot development company in the United States. The acquires land and develops infrastructure for single-family residential communities. It sells its residential single-family finished lots to homebuilders. The company is headquartered in Arlington, Texas. Forestar Group Inc. is a subsidiary of D.R. Horton, Inc.

How the Company Makes Money

Forestar Group generates revenue primarily through the sale of developed residential and commercial lots to homebuilders and other developers. The company acquires land and enhances its value through zoning, infrastructure development, and community planning, allowing it to sell these lots at a premium. Additionally, Forestar earns revenue through its homebuilding operations, where it constructs and sells homes directly to consumers. Key revenue streams also include joint ventures and partnerships with other developers and builders, which help to mitigate risk and expand its market reach. The demand for housing and favorable market conditions contribute significantly to Forestar's earnings, supported by its strategic positioning in high-growth regions.

Forestar Group Financial Statement Overview

Summary

Forestar Group shows strong revenue growth and profitability, but faces challenges with cash flow management. The balance sheet is stable with moderate leverage, but the decline in cash flows could pose risks if not addressed.

Income Statement

Forestar Group has demonstrated consistent revenue growth, with a 7.7% increase in the latest period. The gross profit margin is stable at around 21.9%, and the net profit margin is healthy at 10.1%. However, there has been a slight decline in EBIT and EBITDA margins compared to the previous year, indicating potential cost pressures.

Balance Sheet

The company maintains a moderate debt-to-equity ratio of 0.50, reflecting a balanced approach to leverage. Return on equity is reasonable at 10.5%, though slightly lower than previous years. The equity ratio stands at 56.2%, indicating a solid equity base relative to total assets.

Cash Flow

Forestar Group faces challenges with negative operating and free cash flows, which have declined by 41.2% in the latest period. The operating cash flow to net income ratio is negative, suggesting cash flow issues despite profitability. The free cash flow to net income ratio remains at 1.0, indicating all net income is being consumed by free cash flow needs.

Breakdown	TTM	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	1.66B	1.66B	1.51B	1.44B	1.52B	1.33B
Gross Profit	363.50M	363.50M	359.30M	304.10M	324.00M	229.20M
EBITDA	217.80M	222.80M	243.80M	233.40M	236.90M	163.50M
Net Income	168.00M	167.90M	203.40M	166.90M	178.80M	110.20M
Balance Sheet
Total Assets	2.84B	2.84B	2.84B	2.47B	2.34B	2.10B
Cash, Cash Equivalents and Short-Term Investments	481.20M	481.20M	481.20M	616.00M	264.80M	153.60M
Total Debt	817.10M	817.10M	716.60M	703.10M	714.10M	711.80M
Total Liabilities	1.25B	1.25B	1.25B	1.10B	1.14B	1.09B
Stockholders Equity	1.60B	1.60B	1.59B	1.37B	1.20B	1.01B
Cash Flow
Free Cash Flow	-199.20M	-197.70M	-160.60M	362.80M	105.20M	-304.70M
Operating Cash Flow	-197.70M	-197.70M	-158.40M	364.10M	108.70M	-303.10M
Investing Cash Flow	3.20M	3.20M	7.30M	300.00K	1.30M	1.00M
Financing Cash Flow	92.50M	92.50M	16.30M	-13.20M	1.20M	61.40M

Forestar Group Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 25.21
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For FOR, the sentiment is Negative. The current price of 25.21 is below the 20-day moving average (MA) of 25.91, below the 50-day MA of 25.51, and above the 200-day MA of 23.48, indicating a neutral trend. The MACD of 0.30 indicates Negative momentum. The RSI at 45.44 is Neutral, neither overbought nor oversold. The STOCH value of 53.80 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for FOR.

Forestar Group Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
FPH	73 Outperform	$597.67M	4.23	12.52%	―	-1.52%	81.35%
FOR	71 Outperform	$1.28B	7.66	9.99%	―	10.13%	-18.11%
VTMX	68 Neutral	$2.69B	401.70	0.22%	2.32%	13.04%	-98.33%
AXR	67 Neutral	$100.27M	9.66	8.04%	―	-27.32%	-15.12%
Sector *	65 Neutral	$2.17B	12.19	3.79%	4.94%	3.15%	1.96%
ARL	53 Neutral	$262.47M	45.57	0.95%	―	-0.58%	―

Forestar Group Corporate Events

Forestar Group Reports Strong Q4, Eyes Growth in 2026

Forestar Group Inc., a leading national residential lot developer and a majority-owned subsidiary of D.R. Horton, operates in 64 markets across 23 states, focusing on delivering residential lots to homebuilders.

Forestar’s Earnings Call Highlights Growth Amid Challenges

Forestar’s recent earnings call painted a picture of robust financial health, marked by strong revenue growth and improved financial metrics. The company has made strategic investments and maintains a solid liquidity position, which are positive indicators for its future. However, challenges such as decreased gross profit margins, affordability constraints, and market pressures in key areas like Texas and Florida were also highlighted, suggesting areas that require attention.