Forestar Group Inc (FOR)
NYSE:FOR
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Forestar Group
(NYSE:FOR)
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Rating:66Neutral
Price Target:
$30.00
▲(19.52% Upside)
Action:DowngradedDate:01/23/26
The score is driven mainly by solid but uneven fundamentals (good growth and reasonable leverage, offset by volatile cash generation) and a constructive earnings call (reiterated guidance, strong liquidity and backlog) alongside an attractive low P/E valuation. Technical signals are mixed and do not add strong support.
Positive Factors
Strong liquidity and conservative capital structure
Substantial liquidity and an undrawn revolver provide durable financial flexibility for a cyclical land developer. This buffer supports continued land investments, absorbs timing mismatches in lot settlements, and reduces refinancing risk through downcycles, enabling the company to execute its multi‑hundred‑million dollar investment plan without immediate funding stress.
Negative Factors
Volatile cash generation
Development cash flow volatility reflects timing of lot settlements, working capital swings and project execution variability. Persistent or recurring free cash flow swings can strain reinvestment capacity, force incremental financing at inopportune times, and make it harder to sustain a steady investment cadence or return targets despite healthy accounting profits in some periods.
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Positive Factors
Negative Factors
Strong liquidity and conservative capital structure
Substantial liquidity and an undrawn revolver provide durable financial flexibility for a cyclical land developer. This buffer supports continued land investments, absorbs timing mismatches in lot settlements, and reduces refinancing risk through downcycles, enabling the company to execute its multi‑hundred‑million dollar investment plan without immediate funding stress.
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Forestar Group (FOR) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$1.28B
Dividend YieldN/A
Average Volume (3M)170.25K
Price to Earnings (P/E)20.4
Beta (1Y)0.77
Revenue Growth10.13%
EPS Growth-18.11%
CountryUS
Employees440
SectorReal Estate
Sector Strength53
IndustryReal Estate - Development
Share Statistics
EPS (TTM)0.30
Shares Outstanding50,892,080
10 Day Avg. Volume134,992
30 Day Avg. Volume170,253
Financial Highlights & Ratios
PEG Ratio-0.44
Price to Book (P/B)0.77
Price to Sales (P/S)0.81
P/FCF Ratio-6.77
Enterprise Value/Market Cap1.47
Enterprise Value/Revenue1.11
Enterprise Value/Gross Profit5.16
Enterprise Value/Ebitda8.88
Forecast
1Y Price Target
$32.00Price Target Upside27.49% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering3
EPS Forecast (FY)2.94
Revenue Forecast (FY)$1.65B
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 homebuilde...
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 communi...
Forestar Group Earnings Call Summary
Earnings Call Date:Jan 20, 2026
(Q1-2026)
| % Change Since: |
Next Earnings Date:Apr 21, 2026
Earnings Call Sentiment Positive
The call presents a generally positive operational and financial position: revenue growth (+9% YoY), a 10% increase in book value per share, strong liquidity ($820M), and a large contracted backlog (~$2.2B) and strategic customer relationships (notably D.R. Horton). These strengths are tempered by modest declines in net income and margins, gross margin pressure driven by mix and a low-margin track sale, and near-term demand headwinds tied to affordability and regional resale inventory. Management is maintaining guidance and emphasizing disciplined underwriting, capital flexibility, and operational execution, which supports confidence in navigating the current environment.Positive Updates
Revenue Growth and Volume
Q1 revenues of $273 million, up 9% year-over-year from $250.4 million; 1,944 lots sold in the quarter. Management maintained fiscal 2026 revenue guidance of $1.6 billion to $1.7 billion and lot delivery guidance of 14,000 to 15,000 lots.
Negative Updates
Decline in Net Income and Pretax Margins
Net income of $15.4 million ($0.30 diluted) vs $16.5 million ($0.32) prior year quarter. Pretax income $20.8 million vs $21.9 million prior, and pretax profit margin declined to 7.6% from 8.7% year-over-year (down 1.1 percentage points).
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Q1-2026 Updates
Positive
Negative
Revenue Growth and Volume
Q1 revenues of $273 million, up 9% year-over-year from $250.4 million; 1,944 lots sold in the quarter. Management maintained fiscal 2026 revenue guidance of $1.6 billion to $1.7 billion and lot delivery guidance of 14,000 to 15,000 lots.
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Company Guidance
Forestar reiterated fiscal 2026 guidance of $1.6–$1.7 billion in revenue and 14,000–15,000 lot deliveries, and said it still expects to invest roughly $1.4 billion in land acquisition and development (subject to market conditions) while underwriting new projects to a minimum 15% pretax return on average inventory and a return of initial cash within 36 months; the company finished Q1 with $820 million of liquidity (including $212 million unrestricted cash and $608 million undrawn on its revolver), $793 million of total debt (net debt to capital 24.6%), a $2.2 billion contracted backlog secured by $210 million of deposits, 101,000 total lots of which 65,600 (65%) are owned and 35,400 (35%) controlled, 10,400 owned finished lots (majority under contract), 24,100 owned lots (37%) under contract to sell, and invested $415 million in Q1 (~25% land acquisition, ~75% development), with book value per share up 10% year‑over‑year to $35.10.Forestar Group Financial Statement Overview
Summary
Income Statement
72
Positive
Balance Sheet
68
Positive
Cash Flow
52
Neutral
| Breakdown | TTM | Sep 2025 | Sep 2024 | Sep 2023 | Sep 2022 | Sep 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 1.69B | 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 | 211.30M | 222.80M | 243.80M | 209.40M | 233.10M | 163.50M |
| Net Income | 166.90M | 167.90M | 203.40M | 166.90M | 178.80M | 110.20M |
Balance Sheet | ||||||
| Total Assets | 3.18B | 3.14B | 2.84B | 2.47B | 2.34B | 2.10B |
| Cash, Cash Equivalents and Short-Term Investments | 211.70M | 379.20M | 481.20M | 616.00M | 264.80M | 153.60M |
| Total Debt | 809.80M | 817.10M | 716.60M | 703.10M | 714.10M | 711.80M |
| Total Liabilities | 1.39B | 1.37B | 1.25B | 1.10B | 1.14B | 1.09B |
| Stockholders Equity | 1.79B | 1.77B | 1.59B | 1.37B | 1.20B | 1.01B |
Cash Flow | ||||||
| Free Cash Flow | 93.00M | -199.90M | -160.60M | 362.80M | 105.20M | -304.70M |
| Operating Cash Flow | 95.30M | -197.70M | -158.40M | 364.10M | 108.70M | -303.10M |
| Investing Cash Flow | 2.20M | 3.20M | 7.30M | 300.00K | 1.30M | 1.00M |
| Financing Cash Flow | -17.80M | 92.50M | 16.30M | -13.20M | 1.20M | 61.40M |
Forestar Group Technical Analysis
Negative
25.10
Price Trends
26.82
Negative
26.13
Negative
25.67
Negative
Market Momentum
-0.69
Negative
40.21
Neutral
38.01
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 25.1 is above the 20-day moving average (MA) of 25.03, below the 50-day MA of 26.82, and below the 200-day MA of 25.67, indicating a bearish trend. The MACD of -0.69 indicates Negative momentum. The RSI at 40.21 is Neutral, neither overbought nor oversold. The STOCH value of 38.01 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for FOR.
Forestar Group Risk Analysis
Forestar Group disclosed 29 risk factors in its most recent earnings report. Forestar Group reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Forestar Group Peers Comparison
UnderperformOutperform
Sector (65)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
83 Outperform | $143.66M | 8.82 | 9.58% | ― | -27.32% | -15.12% | |
75 Outperform | $3.02B | 10.67 | 9.46% | 2.29% | 13.04% | -98.33% | |
66 Neutral | $1.28B | 20.39 | 9.82% | ― | 10.13% | -18.11% | |
65 Neutral | $2.17B | 12.19 | 3.79% | 4.94% | 3.15% | 1.96% | |
62 Neutral | $543.93M | 5.51 | 8.87% | ― | -1.52% | 81.35% | |
47 Neutral | $235.34M | 6.63 | 2.58% | ― | -0.58% | ― |
* Real Estate Sector Average
FOR
Forestar Group
25.10
4.34
20.91%
ARL
American Realty Investors
14.57
3.66
33.55%
AXR
Amrep
27.08
8.49
45.67%
FPH
Five Point Holdings
4.98
0.16
3.32%
OZ
Belpointe PREP
56.62
-1.94
-3.31%
VTMX
Corporacion Inmobiliaria Vesta S.A.B. de C.V. ADR
34.20
12.87
60.33%
Forestar Group Corporate Events
Executive/Board ChangesShareholder Meetings
Forestar Group Shareholders Back Board, Pay and Auditor
Positive
Jan 20, 2026
On January 19, 2026, Forestar Group held its Annual Meeting of Stockholders, where shareholders voted on the election of seven director nominees, an advisory approval of executive compensation, and the ratification of the company’s independe...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.