Forestar Group (FOR) AI Stock Analysis

• Market Cap: $1.35B
• Dividend Yield: N/A
• Average Volume (3M): 198.68K
• Price to Earnings (P/E): 8.3
• Beta (1Y): 0.89
• Revenue Growth: 2.35%
• EPS Growth: -17.21%
• Country: US
• Employees: 440
• Sector: Real Estate
• Sector Strength: 54
• Industry: Real Estate - Development
• EPS (TTM): 0.65
• Shares Outstanding: 50,833,170
• 10 Day Avg. Volume: 214,837
• 30 Day Avg. Volume: 198,682
• PEG Ratio: N/A
• Price to Book (P/B): 0.00
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 0.00
• Enterprise Value/Market Cap: 1.27
• Enterprise Value/Revenue: 1.17
• Enterprise Value/Gross Profit: 5.07
• Enterprise Value/Ebitda: 8.36
• 1Y Price Target: $30.67
• Price Target Upside: 12.84% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 4

• Rating: 74 Outperform
• Price Target: $29.00 ▲(6.70% Upside)

Forestar Group's strong financial performance, particularly its profitability and debt-free status, is a key strength. However, negative cash flow and revenue growth challenges temper the outlook. Technical indicators suggest bullish momentum, but potential overbought conditions warrant caution. The attractive valuation enhances the overall score, despite mixed earnings call sentiment.

Positive Factors

Analyst Recommendation

Analyst recommends a Buy rating for Forestar with a price target of $40.

Market Expansion

Forestar expanded into VA and reentered WA, OR, and UT, growing share against smaller, often under-capitalized peers.

Operational Efficiency

Operational efficiencies in a market constrained by regulatory delays are viewed positively.

Negative Factors

Valuation Concerns

Forestar is valued at 1.27 times its book value per share.

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 through multiple streams primarily centered around its real estate activities. The company earns money by purchasing land, entitling it for development, and then selling residential lots to homebuilders, which constitutes a significant portion of its revenue. Additionally, Forestar engages in commercial property development, leasing, and sales, further diversifying its income sources. The company also benefits from partnerships with homebuilders and other real estate developers, which can lead to joint ventures and collaborative projects, enhancing its revenue potential. Furthermore, Forestar's efficient land acquisition strategies and market positioning in high-demand areas contribute to its profitability.

Forestar Group Financial Statement Overview

Summary

Forestar Group exhibits strong financial stability with impressive profitability margins and a debt-free balance sheet. However, challenges in revenue growth and negative cash flow require attention for continued financial flexibility.

Income Statement

Forestar Group demonstrates robust financial performance with a strong gross profit margin of 41.5% and a notable EBIT margin of 32.2% in the TTM. While revenue decreased by 2.5% compared to the previous period, the company maintains healthy profitability with a net profit margin of 11.4%. The decline in revenue is a concern, but the margins suggest efficient cost control and operational effectiveness.

Balance Sheet

The balance sheet shows a strong financial position with zero total debt, resulting in an exceptional debt-to-equity ratio of 0. The equity ratio stands at 54.1%, reflecting a solid capital structure. The return on equity is 10.2%, indicating efficient use of equity to generate profits. The company's low leverage reduces financial risk and enhances stability.

Cash Flow

The cash flow statement highlights challenges with negative free cash flow growth and an operating cash flow to net income ratio of -2.45. Despite these challenges, the company shows resilience with a positive free cash flow to net income ratio of -2.46, indicating potential for future improvement. The significant negative operating cash flow requires careful management to ensure liquidity.

Breakdown	Sep 2024	Sep 2023	Sep 2022	Sep 2021	Sep 2020
Income Statement
Total Revenue	1.51B	1.44B	1.52B	1.33B	931.80M
Gross Profit	359.30M	304.10M	324.00M	229.20M	118.10M
EBITDA	243.80M	209.40M	233.10M	163.50M	77.30M
Net Income	203.40M	166.90M	178.80M	110.20M	60.80M
Balance Sheet
Total Assets	2.84B	2.47B	2.34B	2.10B	1.74B
Cash, Cash Equivalents and Short-Term Investments	481.20M	616.00M	264.80M	153.60M	394.30M
Total Debt	716.60M	695.00M	706.00M	704.50M	641.10M
Total Liabilities	1.25B	1.10B	1.14B	1.09B	868.10M
Stockholders Equity	1.59B	1.37B	1.20B	1.01B	870.90M
Cash Flow
Free Cash Flow	-160.60M	362.80M	105.20M	-304.70M	-169.00M
Operating Cash Flow	-158.40M	364.10M	108.70M	-303.10M	-168.40M
Investing Cash Flow	7.30M	300.00K	1.30M	1.00M	5.00M
Financing Cash Flow	16.30M	-13.20M	1.20M	61.40M	174.90M

Forestar Group Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 27.18
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: 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 27.18 is above the 20-day moving average (MA) of 25.00, above the 50-day MA of 22.38, and above the 200-day MA of 23.66, indicating a bullish trend. The MACD of 1.22 indicates Negative momentum. The RSI at 74.66 is Negative, neither overbought nor oversold. The STOCH value of 78.17 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for FOR.

Forestar Group Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
FOR	74 Outperform	$1.35B	8.31	10.19%	―	2.35%	-17.21%
FPH	73 Outperform	$596.96M	5.13	10.56%	―	-19.68%	44.82%
Sector *	64 Neutral	C$1.99B	4.85	-0.88%	5.20%	1.67%	-56.01%
LSEA	61 Neutral	$411.79M	42.30	1.50%	―	24.15%	-60.70%
ARL	46 Neutral	$220.80M	―	-1.93%	―	-4.84%	-412.72%
OZ	―	$235.96M	―	-10.39%	―	―	―
MRNO	―	$447.34M	114.80		―	―	―

Forestar Group Corporate Events

Forestar Group Expands Board with CEO Appointment

On April 14, 2025, Forestar Group announced the appointment of Anthony W. Oxley, its President and CEO, as a director on the Board, expanding it from six to seven members. This strategic move is expected to enhance the company’s leadership, leveraging Mr. Oxley’s extensive experience in business development and land management to strengthen Forestar’s market position.