Forestar Group Inc (FOR)
NYSE:FOR
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Forestar Group
(NYSE:FOR)
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Rating:76Outperform
Price Target:
$32.00
▲(20.17% Upside)
Action:UpgradedDate:04/24/26
The score is driven primarily by solid (but not fully consistent) financial performance, supported by a constructive technical setup and an attractive low P/E valuation. Earnings-call commentary adds confidence via maintained guidance, strong liquidity, and sizable backlog, partially offset by margin compression and demand/affordability risks.
Positive Factors
Strong liquidity
Substantial liquidity (> $1B) plus revolver capacity gives Forestar durable financial flexibility to fund land/development commitments, bridge timing gaps, and support buy/sell cadence during cyclical housing periods. This reduces refinancing and execution risk over the medium term.
Negative Factors
Gross margin compression
A multi-quarter drop in gross margin, partly from option/write-offs, signals pressure on structural profitability. If development costs, mix shifts, or write-offs persist, it could compress long-term returns on projects and reduce the spread between lot sale prices and total project costs.
Read all positive and negative factors
Positive Factors
Negative Factors
Strong liquidity
Substantial liquidity (> $1B) plus revolver capacity gives Forestar durable financial flexibility to fund land/development commitments, bridge timing gaps, and support buy/sell cadence during cyclical housing periods. This reduces refinancing and execution risk over the medium term.
Read all positive factors
Forestar Group (FOR) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$1.45B
Dividend YieldN/A
Average Volume (3M)170.25K
Price to Earnings (P/E)9.7
Beta (1Y)0.68
Revenue Growth16.12%
EPS Growth-0.91%
CountryUS
Employees440
SectorReal Estate
Sector Strength53
IndustryReal Estate - Development
Share Statistics
EPS (TTM)0.63
Shares Outstanding51,008,730
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 Cap1.28
Enterprise Value/Revenue1.08
Enterprise Value/Gross Profit5.09
Enterprise Value/Ebitda8.69
Forecast
1Y Price Target
$38.00Price Target Upside42.70% 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 primarily makes money by developing and selling finished residential lots to homebuilders. Its core revenue stream is lot sales revenue recognized when control of lots transfers to the buyer under the applicable contract terms. The compan...
Forestar Group Earnings Call Summary
Earnings Call Date:Apr 21, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Jul 21, 2026
Earnings Call Sentiment Positive
The call presented solid operational and financial progress: revenues (+7%), pre-tax income (+8%), increased book value per share (+10%), strong liquidity (> $1 billion), and healthy backlog (~$2.2 billion). Management maintained revenue guidance and raised lot delivery cadence expectations, while exercising capital discipline and committing to significant land/development investment. Lowlights included a modest decline in gross margin (impacted by $6.3M of option/write-off charges), only modest net income growth (+2%), and continued industry headwinds from affordability and variable builder demand. Overall the positives (top-line growth, balance sheet strength, backlog, and guidance) materially outweigh the negatives, suggesting confidence in near- to medium-term execution despite some margin and demand cadence risks.Positive Updates
Revenue Growth
Total revenues of $374.3 million in Q2 FY2026, a 7% increase versus $351.0 million in the prior-year quarter.
Negative Updates
Gross Profit Margin Compression
Reported gross profit margin declined to 21.4% from 22.6% year-over-year; margin included $6.3 million of planned option charges and pre-acquisition cost write-offs (vs. $0.9 million prior-year). Management stated adjusted gross margin would be ~22.9% excluding net write-offs.
Read all updates
Q2-2026 Updates
Positive
Negative
Revenue Growth
Total revenues of $374.3 million in Q2 FY2026, a 7% increase versus $351.0 million in the prior-year quarter.
Read all positive updates
Company Guidance
Management updated fiscal 2026 guidance to 14,000–14,500 lot deliveries and maintained revenue guidance of $1.6–$1.7 billion, while reiterating plans to invest about $1.4 billion in land acquisition and development for the year; this guidance is supported by Q2 results of 2,938 lots sold (ASP $112,800), $374.3 million revenue, $32.1 million net income ($0.63 diluted EPS), $43.9 million pre-tax income (11.7% pre-tax margin) and a contracted backlog/visibility toward roughly $2.2 billion of future revenue secured by $209 million of hard deposits. Management emphasized financial flexibility and underwriting discipline — more than $1 billion of liquidity (including $362 million unrestricted cash and $672 million available on the revolver), total debt $793.5 million, net debt-to-capital 19.2%, a book value per share of $35.66 (up 10% YoY), a target owned land/lot supply of three to four years, and minimum underwriting thresholds of a 15% pre-tax return on average inventory and return of initial cash within 36 months.Forestar Group Financial Statement Overview
Summary
Income Statement
74
Positive
Balance Sheet
78
Positive
Cash Flow
63
Positive
| Breakdown | TTM | Sep 2025 | Sep 2024 | Sep 2023 | Sep 2022 | Sep 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 1.71B | 1.66B | 1.51B | 1.44B | 1.52B | 1.33B |
| Gross Profit | 364.50M | 363.50M | 359.30M | 304.10M | 324.00M | 229.20M |
| EBITDA | 213.40M | 222.80M | 243.80M | 209.40M | 233.10M | 163.50M |
| Net Income | 167.40M | 167.90M | 203.40M | 166.90M | 178.80M | 110.20M |
Balance Sheet | ||||||
| Total Assets | 3.17B | 3.14B | 2.84B | 2.47B | 2.34B | 2.10B |
| Cash, Cash Equivalents and Short-Term Investments | 362.20M | 379.20M | 481.20M | 616.00M | 264.80M | 153.60M |
| Total Debt | 810.40M | 817.10M | 716.60M | 703.10M | 714.10M | 711.80M |
| Total Liabilities | 1.35B | 1.37B | 1.25B | 1.10B | 1.14B | 1.09B |
| Stockholders Equity | 1.82B | 1.77B | 1.59B | 1.37B | 1.20B | 1.01B |
Cash Flow | ||||||
| Free Cash Flow | 265.50M | -199.90M | -160.60M | 362.80M | 105.20M | -304.70M |
| Operating Cash Flow | 267.00M | -197.70M | -158.40M | 364.10M | 108.70M | -303.10M |
| Investing Cash Flow | 2.70M | 3.20M | 7.30M | 300.00K | 1.30M | 1.00M |
| Financing Cash Flow | -81.80M | 92.50M | 16.30M | -13.20M | 1.20M | 61.40M |
Forestar Group Technical Analysis
Positive
26.63
Price Trends
26.80
Negative
26.32
Positive
25.97
Positive
Market Momentum
0.07
Negative
57.13
Neutral
77.50
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For FOR, the sentiment is Positive. The current price of 26.63 is above the 20-day moving average (MA) of 25.37, below the 50-day MA of 26.80, and above the 200-day MA of 25.97, indicating a neutral trend. The MACD of 0.07 indicates Negative momentum. The RSI at 57.13 is Neutral, neither overbought nor oversold. The STOCH value of 77.50 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive 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 | $149.29M | 8.82 | 9.58% | ― | -8.70% | -0.61% | |
77 Outperform | $3.14B | 7.09 | 12.36% | 2.29% | 15.70% | 13.01% | |
76 Outperform | $1.45B | 9.71 | 9.49% | ― | 16.12% | -0.91% | |
65 Neutral | $2.17B | 12.19 | 3.79% | 4.94% | 3.15% | 1.96% | |
57 Neutral | $550.40M | -38.86 | 3.95% | ― | -54.20% | -50.02% | |
47 Neutral | $233.72M | 6.63 | 2.58% | ― | 5.70% | ― |
* Real Estate Sector Average
FOR
Forestar Group
28.09
8.83
45.85%
ARL
American Realty Investors
14.47
2.38
19.69%
AXR
Amrep
27.60
5.05
22.39%
FPH
Five Point Holdings
5.03
-0.23
-4.37%
OZ
Belpointe PREP
51.00
-11.25
-18.07%
VTMX
Corporacion Inmobiliaria Vesta S.A.B. de C.V. ADR
35.63
8.72
32.39%
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.