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Forestar Group
(NYSE:FOR)
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Rating:68Neutral
Price Target:
$30.00
▲(5.93% Upside)
Action:Downgraded
Date:07/23/26
The score is driven primarily by healthy financial performance (revenue growth, positive earnings, and a strengthening balance sheet) and an attractive valuation (low P/E). These positives are moderated by weak technical conditions (below key moving averages with negative momentum) and call-out risks from the earnings update, including affordability-driven demand headwinds and margins remaining at the lower end of the historical range.
Positive Factors
Strong liquidity and low leverage
A large liquidity pool and conservative net-debt-to-capital (17.7%) give Forestar durable financial flexibility to fund land development, absorb timing swings in lot sales, and pursue ~$1.4B planned 2026 investments without near-term refinancing pressure, strengthening resilience across cycles.
Negative Factors
Affordability-driven demand headwinds
Structural affordability pressure reduces the pool of qualified buyers and slows absorption of finished lots, lengthening holding periods and raising carrying costs. Persisting demand constraints can depress lot pricing and extend cash conversion timelines across multiple quarters.
Read all positive and negative factors
Positive Factors
Negative Factors
Strong liquidity and low leverage
A large liquidity pool and conservative net-debt-to-capital (17.7%) give Forestar durable financial flexibility to fund land development, absorb timing swings in lot sales, and pursue ~$1.4B planned 2026 investments without near-term refinancing pressure, strengthening resilience across cycles.
Read all positive factors
Forestar Group (FOR) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$1.44B
Dividend YieldN/A
Average Volume (3M)170.25K
Price to Earnings (P/E)8.4
Beta (1Y)0.60
Revenue Growth11.76%
EPS Growth4.46%
CountryUS
Employees433
SectorReal Estate
Sector Strength53
IndustryReal Estate - Development
Share Statistics
EPS (TTM)3.34
Shares Outstanding51,017,628
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 Cap<0.01
Enterprise Value/Revenue<0.01
Enterprise Value/Gross Profit<0.01
Enterprise Value/Ebitda<0.01
Forecast
1Y Price TargetN/A
Price Target UpsideN/A
Rating ConsensusHold
Number of Analyst Covering2
EPS Forecast (FY)2.94
Revenue Forecast (FY)$1.66B
Forestar Group Business Overview & Revenue Model
Company Description
Forestar Group Inc. is an American company primarily engaged in developing residential lots. Its business model entails acquiring land, then preparing the necessary infrastructure for new single-family housing communities. These fully developed lo...
How the Company Makes Money
Forestar primarily makes money by selling finished residential lots to homebuilders. Its core revenue stream is lot sales: the company acquires raw or partially improved land, secures entitlements and approvals, designs and develops communities (t...
Forestar Group Earnings Call Summary
Earnings Call Date:Jul 21, 2026
(Q3-2026)
| % Change Since: |
Next Earnings Date:Nov 11, 2026
Earnings Call Sentiment Positive
The call communicated a predominately positive operating and financial update: revenue, EPS, pretax income, book value per share, contracted backlog and liquidity all improved or remained strong. Management maintained guidance and emphasized scale, disciplined underwriting, and significant upside via the D.R. Horton relationship. Offsetting these positives are persistent demand headwinds from affordability and cautious consumers, margins residing at the lower end of historic ranges, some inventory/control count questions, and permitting/absorption constraints. On balance, the strengths (solid financials, strong liquidity, backlog and strategic customer opportunity) outweigh the near-term challenges, supporting a constructive outlook.Positive Updates
Revenue and Earnings Growth
Revenues increased 4% year-over-year to $407 million. Net income attributable to Forestar rose 9% to $35.9 million ($0.70 diluted EPS, +8%). Pretax income increased 12% to $48.7 million and pretax profit margin expanded 80 basis points to 12.1% (from 11.2%).
Negative Updates
Demand and Affordability Headwinds
Ongoing home affordability constraints and cautious consumer sentiment continue to weigh on the pace of new home sales and are expected to remain near-term headwinds for lot demand.
Read all updates
Q3-2026 Updates
Positive
Negative
Revenue and Earnings Growth
Revenues increased 4% year-over-year to $407 million. Net income attributable to Forestar rose 9% to $35.9 million ($0.70 diluted EPS, +8%). Pretax income increased 12% to $48.7 million and pretax profit margin expanded 80 basis points to 12.1% (from 11.2%).
Read all positive updates
Company Guidance
Forestar reaffirmed fiscal 2026 guidance, maintaining lot deliveries of 14,000–14,500 and revenues of $1.6–$1.7 billion, while expecting to invest roughly $1.4 billion in land acquisition and development (subject to market conditions); underwriting targets remain a minimum 15% pre‑tax return on average inventory and return of initial cash within 36 months, with a strategic target of owning a 3–4 year supply of lots (currently just north of 4 years). The company highlighted a strong contracted backlog and visibility to about $2.3 billion of future revenue (supported by $202 million of hard earnest money deposits), ending the quarter with ~$1.1 billion of liquidity (including $395 million unrestricted cash and $670 million revolver capacity), $794 million of total debt, no senior note maturities in the next 12 months, a net‑debt‑to‑capital ratio of 17.7%, and book value per share of $36.40 (up 10% year‑over‑year).Forestar Group Financial Statement Overview
Summary
Income Statement
72
Positive
Balance Sheet
74
Positive
Cash Flow
63
Positive
| Breakdown | TTM | Sep 2025 | Sep 2024 | Sep 2023 | Sep 2022 | Sep 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 1.72B | 1.66B | 1.51B | 1.44B | 1.52B | 1.33B |
| Gross Profit | 368.90M | 363.50M | 359.30M | 304.10M | 324.00M | 229.20M |
| EBITDA | 222.20M | 222.80M | 273.10M | 224.60M | 238.50M | 149.30M |
| Net Income | 170.40M | 167.90M | 203.40M | 166.90M | 178.80M | 110.20M |
Balance Sheet | ||||||
| Total Assets | 3.22B | 3.14B | 2.84B | 2.47B | 2.34B | 2.10B |
| Cash, Cash Equivalents and Short-Term Investments | 394.90M | 379.20M | 481.20M | 616.00M | 264.80M | 153.60M |
| Total Debt | 810.20M | 817.10M | 716.60M | 703.10M | 714.10M | 711.80M |
| Total Liabilities | 1.36B | 1.37B | 1.25B | 1.10B | 1.14B | 1.09B |
| Stockholders Equity | 1.86B | 1.77B | 1.59B | 1.37B | 1.20B | 1.01B |
Cash Flow | ||||||
| Free Cash Flow | 277.50M | -199.90M | -160.60M | 362.80M | 105.20M | -304.70M |
| Operating Cash Flow | 278.80M | -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 | -93.30M | 92.50M | 16.30M | -13.20M | 1.20M | 61.40M |
Forestar Group Technical Analysis
Positive
28.32
Price Trends
29.23
Negative
27.68
Positive
26.98
Positive
Market Momentum
-0.10
Negative
50.54
Neutral
81.55
Negative
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 28.32 is below the 20-day moving average (MA) of 29.11, below the 50-day MA of 29.23, and above the 200-day MA of 26.98, indicating a neutral trend. The MACD of -0.10 indicates Negative momentum. The RSI at 50.54 is Neutral, neither overbought nor oversold. The STOCH value of 81.55 is Negative, 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 |
|---|---|---|---|---|---|---|---|
79 Outperform | $3.06B | 7.38 | 14.33% | 2.42% | 21.16% | 1174.42% | |
68 Neutral | $1.44B | 8.43 | 9.42% | ― | 11.76% | 4.46% | |
65 Neutral | $2.17B | 12.19 | 3.79% | 4.94% | 3.15% | 1.96% | |
65 Neutral | $123.75M | 12.04 | 7.47% | ― | 6.34% | -19.44% | |
65 Neutral | $569.22M | 6.93 | 6.35% | ― | -40.80% | -33.41% | |
51 Neutral | $245.83M | 20.08 | 1.99% | ― | 6.16% | ― |
* Real Estate Sector Average
FOR
Forestar Group
29.21
3.13
12.00%
ARL
American Realty Investors
14.99
2.04
15.75%
AXR
Amrep
22.08
0.08
0.36%
FPH
Five Point Holdings
5.15
-0.22
-4.10%
OZ
Belpointe PREP
47.44
-15.56
-24.71%
VTMX
Corporacion Inmobiliaria Vesta S.A.B. de C.V. ADR
33.69
5.68
20.27%
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.