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olivLaw · US equity research

Forestar Group Inc. FOR

Real Estate · SIC 6500 · Vertical: Real Estate (SIC 6500)

24.97USD+6.26% · 1 dayClose 04 Nov 2026

Forestar Group is a national residential lot developer that buys land, develops it and sells finished single-family lots to homebuilders. Recent filings show rising revenues and strong liquidity, while housing affordability remains a constraint and D.R. Horton holds a controlling stake.

The AI analysis may be outdated: new filings came after its sources (see the «AI analysis» section).

At the close of 04 Nov 2026, Forestar Group Inc. (FOR) stock was 24.97 USD (+6.26% on the day), with market capitalisation 1.3 bn USD, P/E 7.5 on diluted EPS of 3.33 USD over the last 12 months, beta 0.80, 52-week range 23.09–31.98 USD. Latest reported quarter (Q3 2026): revenue of 407.0 m USD (+4.2% YoY), net income of 35.9 m USD (+9.1% YoY), diluted EPS 0.70 USD.

Data as of · AI analysis dated · Source: SEC filings and closing prices, computed by olivLaw.

Market cap
1.3 bn USD
shares as of 17 Jul 2026
P/E (TTM)
7.5
Diluted EPS TTM 3.33 · TTM to 30 Jun 2026
E/P (TTM)
13.34%
TTM to 30 Jun 2026
Dividend yield
unavailable
Beta (2y)
0.80
Volatility (1y) 34%
52-week range
23.0931.98

Price history

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Technical reading

RSI (14)
46.5
neutral
Bollinger (20, 2)
23.88 – 26.76
in the lower half of the band · %B 0.38 · band width 11.4%
SMA 50 / 200
26.23 / 27.38
downtrend (price < SMA50 < SMA200)
MACD (12, 26, 9)
-0.48 / -0.39
MACD below signal

Indicators describe past prices; on their own they do not predict direction. On our history the RSI ≤ 40 filter added no return (see the signals methodology).

Performance

CompanyS&P 500vs S&P 500Vertical median
1 month−1.5%−1.1%−0.4 pp—
3 months−15.6%−0.5%−15.1 pp—
6 months−7.9%+4.4%−12.3 pp—
Year to date+1.4%+12.3%−10.9 pp—
1 year−0.9%+13.5%−14.5 pp−12.2%
3 years−5.6%+76.4%−82.0 pp−2.5%
5 years+16.7%+63.7%−47.0 pp—
Max drawdown (1y)
−26.5%
29 Jun 2026 → 03 Nov 2026
Max drawdown (5y)
−54.7%
09 Apr 2024 → 21 Apr 2025
Compound annual growth (5y)
+3.1%
S&P 500 +10.4%

Price returns, dividends excluded.

Quarterly results

Latest quarter: Q3 2026 · 30 Jun 2026

Revenue
407.0 m USD
+4.2% YoY
Net income
35.9 m USD
+9.1% YoY
Diluted EPS
0.70
+7.7% YoY
net / operating
8.8% / unavailable

Quarterly margins

Quarterly statements · USD

Fiscal yearQ4 '24Q1 '25Q2 '25Q3 '25Q4 '25Q1 '26Q2 '26Q3 '26
Revenue551.4 m250.4 m351.0 m390.5 m670.5 m273.0 m374.3 m407.0 m
Cost of revenue419.5 m195.4 m271.8 m310.8 m520.9 m218.0 m294.1 m322.9 m
SG&A32.0 m36.0 m38.4 m37.4 m42.6 m36.5 m37.9 m38.3 m
Depreciation & amortisation700.0 k800.0 k1.0 m ≈800.0 k ≈900.0 k900.0 k700.0 k ≈700.0 k ≈
Pre-tax income108.5 m21.9 m40.7 m43.6 m113.1 m20.8 m43.9 m48.7 m
Income tax26.9 m5.4 m9.1 m10.7 m26.2 m5.4 m11.7 m12.7 m
Net income81.6 m16.5 m31.6 m32.9 m86.9 m15.4 m32.1 m35.9 m
Diluted EPS1.60 ≈0.320.620.651.70 ≈0.300.630.70
Operating cash flow119.2 m-450.0 m-19.8 m ≈15.8 m ≈256.3 m-157.0 m151.9 m ≈32.7 m ≈
Capex800.0 k0700.0 k ≈800.0 k ≈700.0 k100.0 k200.0 k ≈0 ≈

≈ derived quarter (cumulative difference / share-days average)

E/P over time

E/P = trailing-12-month diluted EPS / price at quarter end. E/P is the inverse of P/E and stays defined when earnings are negative.

Today's P/E sits at the 33 percentile of its own 33-quarter history (min 3.1, median 8.2, max 23.4; quarters with earnings only).

Fiscal years

Fiscal year⚠ 20172019202020212022202320242025
Revenue114.3 m428.3 m931.8 m1.3 bn1.5 bn1.4 bn1.5 bn1.7 bn
Revenue YoY—unavailable+117.6%+42.3%+14.6%−5.4%+5.0%+10.1%
Net income50.3 m33.0 m60.8 m110.2 m178.8 m166.9 m203.4 m167.9 m
Net income YoY—unavailable+84.2%+81.3%+62.3%−6.7%+21.9%−17.5%
Diluted EPS1.190.791.262.253.593.334.003.29
Diluted EPS YoY—unavailable+59.5%+78.6%+59.6%−7.2%+20.1%−17.8%
net %44.0%7.7%6.5%8.3%11.8%11.6%13.5%10.1%
Free cash flow-15.4 m-392.1 m-169.0 m-304.7 m105.2 m362.8 m-160.6 m-199.9 m

The series breaks before 2017: earlier years come from the original reports of the issuer of that time, later years from a subsequent filing that restated the perimeter (a separation, discontinued operations). The year-on-year change across the break is not shown.

Reported results vs expectations

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Balance sheet & financial health

Fiscal year 2025 · 30 Sept 2025

Cash
379.2 m USD
Financial debt
802.7 m USD
Net debt
423.5 m USD
Equity
1.8 bn USD
Total assets
3.1 bn USD
Debt / equity
0.45x
Current ratio
unavailable
ROE
10.0%
ROA
5.6%
FCF margin
-12.0%

Financial statements (source on every figure)

Revenue and net income (USD)

Margins

Income statement · USD

Revenue
2023
1.4 bn
2024
1.5 bn
2025
1.7 bn

SEC (XBRL)· 19 Nov 2025verified

Cost of revenue
2023
1.1 bn
2024
1.2 bn
2025
1.3 bn

SEC (XBRL)· 19 Nov 2025verified

Gross profit
2023
304.1 m ≈
2024
359.3 m ≈
2025
363.5 m ≈

SEC (XBRL)· 19 Nov 2025derived

SG&A
2023
97.7 m
2024
118.5 m
2025
154.4 m

SEC (XBRL)· 19 Nov 2025verified

Depreciation & amortisation
2023
3.0 m
2024
3.0 m
2025
3.5 m

SEC (XBRL)· 19 Nov 2025verified

Interest expense
2023
—
2024
—
2025
—

SEC (XBRL)· 19 Nov 2020verified

Pre-tax income
2023
221.6 m
2024
270.1 m
2025
219.3 m

SEC (XBRL)· 19 Nov 2025verified

Income tax
2023
54.7 m
2024
66.7 m
2025
51.4 m

SEC (XBRL)· 19 Nov 2025verified

Net income
2023
166.9 m
2024
203.4 m
2025
167.9 m

SEC (XBRL)· 19 Nov 2025verified

Diluted EPS
2023
3.33
2024
4.00
2025
3.29

SEC (XBRL)· 19 Nov 2025verified

Weighted average diluted shares
2023
50.1 m
2024
50.8 m
2025
51.1 m

SEC (XBRL)· 19 Nov 2025verified

Balance sheet · USD

Cash
2023
616.0 m
2024
481.2 m
2025
379.2 m

SEC (XBRL)· 19 Nov 2025verified

Property, plant & equipment, net
2023
5.9 m
2024
7.1 m
2025
8.1 m

SEC (XBRL)· 19 Nov 2025verified

Total assets
2023
2.5 bn
2024
2.8 bn
2025
3.1 bn

SEC (XBRL)· 19 Nov 2025verified

Long-term debt
2023
695.0 m
2024
706.4 m
2025
802.7 m

SEC (XBRL)· 19 Nov 2025verified

Total liabilities
2023
1.1 bn
2024
1.2 bn
2025
1.4 bn

SEC (XBRL)· 19 Nov 2025verified

Equity
2023
1.4 bn
2024
1.6 bn
2025
1.8 bn

SEC (XBRL)· 19 Nov 2025verified

Cash flow · USD

Operating cash flow
2023
364.1 m
2024
-158.4 m
2025
-197.7 m

SEC (XBRL)· 19 Nov 2025verified

Capex
2023
1.3 m
2024
2.2 m
2025
2.2 m

SEC (XBRL)· 19 Nov 2025verified

Free cash flow
2023
362.8 m ≈
2024
-160.6 m ≈
2025
-199.9 m ≈

SEC (XBRL)· 19 Nov 2025derived

Investing cash flow
2023
300.0 k
2024
7.3 m
2025
3.2 m

SEC (XBRL)· 19 Nov 2025verified

Financing cash flow
2023
-13.2 m
2024
16.3 m
2025
92.5 m

SEC (XBRL)· 19 Nov 2025verified

Computed indicators

Growth

Revenue growth (YoY)
10.1%
computed by olivLawFY 2025
Revenue CAGR 3Y
3.1%
computed by olivLawFY 2022 → FY 2025
Revenue CAGR 5Y
12.3%
computed by olivLawFY 2020 → FY 2025
EBIT growth (YoY)
unavailable
input data missing
Net income growth (YoY)
-17.5%
computed by olivLawFY 2025
Net income CAGR 3Y
-2.1%
computed by olivLawFY 2022 → FY 2025
Net income CAGR 5Y
22.5%
computed by olivLawFY 2020 → FY 2025
EPS growth (YoY)
-17.8%
computed by olivLawFY 2025
EPS CAGR 3Y
-2.9%
computed by olivLawFY 2022 → FY 2025
EPS CAGR 5Y
21.2%
computed by olivLawFY 2020 → FY 2025
FCF growth (YoY)
unavailable
the base of the ratio is not positive

Profitability

Gross margin
21.4%
computed by olivLawTTM to 30 Jun 2026
EBITDA margin
unavailable
input data missing
EBIT margin
unavailable
input data missing
Net margin
9.9%
computed by olivLawTTM to 30 Jun 2026
FCF margin
16.4%
computed by olivLawTTM to 30 Jun 2026

Returns

ROE
9.6%
computed by olivLawTTM to 30 Jun 2026 · balance sheet at 30 Jun 2026
ROA
5.4%
computed by olivLawTTM to 30 Jun 2026 · balance sheet at 30 Jun 2026
ROIC
unavailable
input data missing
ROCE
unavailable
input data missing
Payout ratio (EPS)
unavailable
input data missing
Payout ratio (FCF)
unavailable
input data missing

Balance sheet

Net debt
398.9 m USD
computed by olivLawbalance sheet at 30 Jun 2026
Net debt / EBITDA
unavailable
input data missing
Debt / equity
0.4x
computed by olivLawbalance sheet at 30 Jun 2026
Interest coverage
unavailable
the reported interest expense is far older than the latest period (the filer changed its XBRL tag): a stale figure is not used

Liquidity

Current ratio
unavailable
input data missing
Cash ratio
unavailable
input data missing

Cash

Operating cash flow
283.9 m USD
computed by olivLawTTM to 30 Jun 2026
Capital expenditure
1.0 m USD
computed by olivLawTTM to 30 Jun 2026
Free cash flow
282.9 m USD
computed by olivLawTTM to 30 Jun 2026
Cash conversion
unavailable
input data missing

Market and valuation

Market capitalisation
1.3 bn USD
computed by olivLawbalance sheet at 30 Jun 2026
Enterprise value
1.7 bn USD
computed by olivLawbalance sheet at 30 Jun 2026
Market cap / net income TTM
7.5x
computed by olivLawTTM to 30 Jun 2026
P/E (TTM)
7.5x
computed by olivLawTTM to 30 Jun 2026
Earnings yield
13.3%
computed by olivLawTTM to 30 Jun 2026
P/B
0.7x
computed by olivLawbalance sheet at 30 Jun 2026
P/S
0.7x
computed by olivLawTTM to 30 Jun 2026 · balance sheet at 30 Jun 2026
EV/EBITDA
unavailable
input data missing
EV/EBIT
unavailable
input data missing
EV/Sales
1.0x
computed by olivLawTTM to 30 Jun 2026 · balance sheet at 30 Jun 2026
Dividend yield
unavailable
no dividend in the structured statements; a missing line is not a confirmed zero
Shareholder yield (distributions)
unavailable
input data missing

9 indicators that do not apply to the sector.

Valuation

olivLaw classification

Insufficient data
What is missing
  • indicators available: 4 of at least 6
  • score weight coverage: 43.5% of at least 60%

A scoring methodology on indicators and valuation, not investment advice.

Closing price

24.97 USD

04 Nov 2026Source: olivLaw, closing series

Market cap: 1.3 bn USD

Key indicators

Market capitalisation
1.3 bn USD
computed by olivLawbalance sheet at 30 Jun 2026
P/E (TTM)
7.5x
computed by olivLawTTM to 30 Jun 2026
P/B
0.7x
computed by olivLawbalance sheet at 30 Jun 2026
EV/EBITDA
unavailable
input data missing
ROE
9.6%
computed by olivLawTTM to 30 Jun 2026 · balance sheet at 30 Jun 2026
Net margin
9.9%
computed by olivLawTTM to 30 Jun 2026
Revenue growth (YoY)
10.1%
computed by olivLawFY 2025
Dividend yield
unavailable
no dividend in the structured statements; a missing line is not a confirmed zero

Coverage and freshness

22/37 reporting lines present
Latest full fiscal year: 2025
Latest reported period: 30 Jun 2026
Latest balance sheet date: 30 Jun 2026
Share count (cover of the latest filing), as of: 17 Jul 2026
Source: SEC (XBRL)published 22 Jul 2026
verified 1919derived 125

Score by group

43% · Insufficient data

Estimated value range

Low
18.08
USD per share
Mid
33.52
USD per share
High
60.26
USD per share
Price: 24.97 USD
The price is within the range
Potential to the central value: 34.3% (value / price − 1)
Margin of safety: 25.5% (1 − price / value)
Agreement between methods: single method · 1 methods used · 1 independent bases

The combined range = the median of the valid methods' low, central and high values; it is not a probability interval and does not cover every result. Envelope of all methods: 18.08 – 60.26 USD.

Valuation assumptions are editorial choices, not measured; beta is not measured.

Method ranges (USD per share)

— — Mid · ▏ Price

Valuation methods

  • Net asset value (NAV)unavailable · input data missing
  • Dividend discount (DDM)unavailable · the company pays no dividend: a dividend model needs an explicit initiation assumption
  • Peers: P/B18.08 – 60.26 (Mid 33.52)
    19 companies used · median multiple 0.9x · quartiles 0.5x – 1.7x
    AEI, AHRT, AIRE, BEEP, CBRE, CHCI, CIGI, CMTG, CURB, CWK, FRPH, GTY, HPP, IIPR, LPA, OPI, TRC, TRNO, UE
Multiple comparisons use the SIC vertical: Real Estate (SIC 6500)

Classification (SIC) comparables group by industry code, not by economic activity; the direct group is an editorial selection by activity. Members' multiples are on their own trailing twelve months, at their own latest close.

Assumptions (illustrative, editorial)

Risk-free rate
4.3%
Equity risk premium
5.0%
Beta (default)
1.00
Cost of equity
9.3%
Terminal growth
2.5%

Factor scorecard

Insufficient data

Minimum-evidence gate: indicators available: 4 of at least 6; score weight coverage: 43.5% of at least 60%

FactorValueScoreWeight used
ROE · Quality9.6%86 (vs peers)15%
EBITDA margin · Qualityunavailableunavailable—
Revenue CAGR 3Y · Growth3.1%31 (on a fixed band)20%
Net debt / EBITDA · Balance sheetunavailableunavailable—
Interest coverage · Balance sheetunavailableunavailable—
P/B · Valuation0.7x68 (vs peers)45%
P/E (TTM) · Valuation7.5x87 (vs peers)20%
Dividend yield · Returnsunavailableunavailable—
Payout ratio (EPS) · Returnsunavailableunavailable—

Factors without a value were dropped; the remaining weights were renormalised.

Score groups

  • Balance sheet· partialunavailable · 0/2 factors with a value
  • Growth31/100 · 1/1 factors with a value
  • Quality· partial86/100 · 1/2 factors with a value
  • Returns· partialunavailable · 0/2 factors with a value
  • Valuation74/100 · 2/2 factors with a value

A «partial» group is computed from under half of its weight or from one factor: it is not a full assessment of the group.

Memo

FORESTAR GROUP INC. (FOR). Latest full fiscal year: 2025; data up to 2026-06-30.

Figures computed from the financial statements: revenue 1.7 bn USD in 2025; YoY growth 10.1%; net margin 9.9%; ROE 9.6%.

The estimated value range is 18.08–60.26 USD per share (median of 1 methods, agreement: single method); assumptions are illustrative. Against the central value of 33.52 USD, the price of 24.97 USD leaves a potential of 34.3% (value / price − 1) and a margin of safety of 25.5% (1 − price / value). The range is the median of the methods' low, central and high values, not a probability interval.

Insufficient data for a verdict (indicators available: 4 of at least 6; score weight coverage: 43.5% of at least 60%).

Text generated deterministically from the figures shown; no language model. Not investment advice.

What supports the thesis

  • ROE: 9.6%
  • P/E (TTM): 7.5x

What contradicts it

No signal among the computed factors. That is not an absence of risk: factors without data were not assessed, and business risks (margins, inventory, demand) are in the source-based analysis.

Not assessed (insufficient data or a ratio without meaning): EBITDA margin, Net debt / EBITDA, Interest coverage, Dividend yield, Payout ratio (EPS).

Versus the vertical median

Real Estate (SIC 6500) · same industry (4-digit SIC) · compared with 31 companies

Multiples and returns vs the median

P/E
7.5x
vertical median 30.2x
below median (−75.2%)
EV/EBITDA
—
vertical median 13.3x
P/S
0.7x
vertical median 2.3x
below median (−68.6%)
P/B
0.7x
vertical median 1.0x
below median (−29.8%)
ROE
9.6%
vertical median 1.3%
above median (+657.0%)
Net margin
9.9%
vertical median 2.7%
above median (+261.9%)
EBIT margin
—
vertical median 6.1%
Revenue YoY
10.1%
vertical median 7.5%
above median (+35.4%)
Net debt/EBITDA
—
vertical median 2.6x
Dividend yield
—
vertical median 3.7%

Price rebased to 100 (monthly, 5 years)

Companies in the vertical

Market capP/EROENet marginRevenue YoY1A / 3A
CBRECbre Group, Inc.40.7 bn30.216.1%3.1%+13.4%−13% / +79%
VTMXVesta Real Estate Corporation, S.A.B. de C.V.32.7 bn131.89.1%85.4%+12.2%+19% / −2%
TRNOTerreno Realty Corporation7.5 bn20.38.3%68.1%+24.5%+8% / +19%
FSVFirstService Corporation7.1 bn49.014.9%3.5%+5.4%−1% / −1%
CIGIColliers International Group Inc.4.0 bn48.815.7%4.0%+15.3%−32% / −5%
CURBCurbline Properties Corp.3.7 bn125.41.3%11.2%+51.3%+26% / unavailable
CWKCushman & Wakefield Ltd.3.5 bn50.53.4%0.6%+8.9%−11% / +82%
UEUrban Edge Properties2.7 bn24.67.9%22.2%+6.1%+10% / +26%
GTYGetty Realty Corp.1.9 bn17.48.9%42.4%+9.0%+1% / −2%
IIPRInnovative Industrial Properties, Inc.1.6 bn12.57.6%53.2%−13.8%+14% / −31%
FORForestar Group Inc.1.3 bn7.59.6%9.9%+10.1%−1% / −6%
HPPHudson Pacific Properties, Inc.572.8 m—-19.8%-69.1%−1.3%−24% / −74%
DUOFangdd Network Group Ltd.548.5 m—-17.9%-23.9%+9.2%−68% / −96%
AHRTAh Realty Trust, Inc.500.6 m—-6.7%-18.2%+4.1%+3% / −38%
TRCTejon Ranch Co.439.9 m71.31.3%10.6%+18.4%+0% / +3%
FRPHFrp Holdings, Inc.360.7 m2,041,655.00.0%0.2%+2.6%−19% / −32%
MLPMaui Land & Pineapple Co Inc289.5 m—-16.1%-28.6%+68.2%−8% / −2%
OPIOffice Properties Income Trust285.6 m—-40.5%-73.0%−11.8%unavailable / unavailable
CMTGClaros Mortgage Trust, Inc.261.0 m—-36.5%-391.9%−24.4%−44% / −85%
CHCIComstock Holding Companies, Inc.165.7 m6.736.4%32.2%+22.6%+46% / +352%
BEEPMobile Infrastructure Corporation100.4 m—-16.1%-67.2%−5.2%−22% / −54%
LPALogistic Properties of the Americas78.1 m7.54.3%20.9%+14.3%−27% / unavailable
OZBelpointe PREP, LLC47.6 m——-212.1%+243.4%−41% / −50%
AEIAlset Inc.21.1 m—-43.4%-951.4%−78.8%−80% / −54%
CWDCalibercos Inc.4.7 m——-117.3%−60.7%−80% / −98%

1- and 3-year price returns: for FOR from daily closes (the same as the performance table), for the other companies from month-end closes.

olivLaw engine forecast

The world engine ran after the company's latest material disclosure. Probabilities are of TOUCHING a level within the horizon (not closing there) and sit next to the random walk (p_rw), the no-information benchmark.

The engine has no published run for this company yet.

Valuation scenarios (editable assumptions)

Illustrative scenarios

Illustrative: not forecasts and without probabilities. Each case is one coherent set of assumptions, computed on today's figures.

Bear
Allowed range: -50 … 50%
Allowed range: -100 … 100%
Allowed range: 0 … 100
Allowed range: -10 … 20%
Allowed range: 0 … 100%
Base
Allowed range: -50 … 50%
Allowed range: -100 … 100%
Allowed range: 0 … 100
Allowed range: -10 … 20%
Allowed range: 0 … 100%
Bull
Allowed range: -50 … 50%
Allowed range: -100 … 100%
Allowed range: 0 … 100
Allowed range: -10 … 20%
Allowed range: 0 … 100%
Nothing is saved.

Estimated price (USD)

Estimated priceBearBaseBull
1 years
14.58
Total return -42% · Per year -42%
25.79
Total return 3% · Per year 3%
38.87
Total return 56% · Per year 56%
3 years
13.74
Total return -45% · Per year -18%
27.39
Total return 10% · Per year 3%
45.38
Total return 82% · Per year 22%
5 years
12.95
Total return -48% · Per year -12%
29.08
Total return 16% · Per year 3%
52.98
Total return 112% · Per year 16%
What moves the 3-year price the most
  • Exit P/E± 6.85
  • Net margin± 4.79
  • Annual revenue growth± 3.99
  • Annual dilution± 0.40

AI analysis

AI-generatedAI-generated analysis (Claude) from cited public sources; it may contain errors. Not investment advice. As of 27 Oct 2026 · Model: claude-haiku-5-5.

Possibly outdated: the newest document it read is from 22 Jul 2026; since then the company filed 8-K (29 Oct 2026 · results).

In brief

Forestar Group is a national residential lot developer that buys land, develops it and sells finished single-family lots to homebuilders. Recent filings show rising revenues and strong liquidity, while housing affordability remains a constraint and D.R. Horton holds a controlling stake.123

SWOT

Strengths

  • Broad geographic coverage and strong local teams that diversify regional risk.
  • Solid liquidity and low net leverage that provide flexibility in uncertain periods.
  • A substantial contracted pipeline of future sales that supports revenue visibility.

Weaknesses

  • Heavy dependence on one customer, D.R. Horton, which buys most of the lots.
  • Majority control by the principal shareholder, which limits other shareholders' influence.
  • Exposure to the cyclicality of the real estate industry and to changes in local economic conditions.

Opportunities

  • Consolidating market share in a fragmented sector by expanding into new markets.
  • Rising demand for affordable lots if mortgage rates ease.
  • Additional customers beyond the D.R. Horton relationship could diversify sales.

Threats

  • High mortgage rates could reduce housing affordability and lot demand.
  • Municipal approval delays and high development costs could lengthen delivery cycles.
  • Inflation or tariffs on imported materials could raise costs and compress margins.

Risks

  • Controlling shareholderhigh

    The principal shareholder can strongly influence strategic decisions and limit other shareholders' ability to affect voting outcomes.1

  • Dependence on the D.R. Horton relationshiphigh

    Most lot sales go to a single customer, so revenues could be affected if that relationship changes.1

  • Industry cyclicalitymedium

    Lot development is sensitive to economic changes, interest rates and consumer confidence.1

  • Construction costs and approvalsmedium

    Inflation, labour shortages and municipal delays could raise costs and delay deliveries.12

  • Interest rate exposuremedium

    High mortgage rates could keep demand limited and reduce margins through price adjustments.12

Investment thesis

What would need to be true (bull case)

  • The company has solid liquidity, modest debt and a contracted sales pipeline, which give it flexibility if the market stabilises.
  • Revenues and pre-tax income have grown in recent quarters, suggesting the model can work even in difficult conditions.
  • A fragmented market offers consolidation opportunities, especially if the company extends its presence into new markets.

What would break the thesis

  • Dependence on one customer and the controlling shareholder's stake could limit strategic independence and value for other shareholders.
  • High mortgage rates and weak affordability could keep demand subdued and pressure prices.
  • Development costs remain elevated, and municipal approval delays could reduce margins and delay deliveries.

What to watch

  • Full-year financial results and final guidance for fiscal 2026Q4 2026
  • Lot deliveries against the 14,000-14,500 range and revenue against 1.6-1.7 billionQ4 2026
  • Trends in mortgage rates and housing affordability2027
  • Development of the D.R. Horton relationship and sales to other customersnext 10-K

Products, market & competition

AI-generatedAI-generated analysis (Claude) from cited public sources; it may contain errors. Not investment advice. As of 27 Oct 2026 · Model: claude-haiku-5-5.

Possibly outdated: the newest document it read is from 22 Jul 2026; since then the company filed 8-K (29 Oct 2026 · results).

The business

Forestar Group Inc. is a national residential lot development company based in Arlington, Texas, that invests in land acquisition and development to sell finished single-family lots to homebuilders.13 It runs its operations through a real estate segment, which generates substantially all of its revenues, across 65 markets in 24 states.23 Most projects are single-family communities, and substantially all development work is performed by subcontractors selected through competitive bidding.1

The business model centres on short-duration, entitled projects developed in phases so that sales match market demand, which the company says could produce more consistent returns than other developers.1 It supplies lots to D.R. Horton under a master supply agreement while also selling to other local, regional and national homebuilders.12

The capital structure is relatively conservative: debt is a modest share of total capital, and the company has a revolving credit facility that gives it flexibility in uncertain periods.23

Segments

Residential lot development

The main segment sells finished lots to homebuilders, mainly D.R. Horton, which bought most of the lots sold in fiscal 2025.1

Lot banking and land banking

Short-term investments in finished lots or undeveloped land, sold within a short period, mainly to D.R. Horton, to use available capital before longer-term projects.12

Tract sales and other revenue

Tract land sales and other revenue rose sharply in the nine months of fiscal 2026, adding to total revenues.2

Market context

The market is fragmented, with many local and private developers, and housing demand is shaped by mortgage rates and affordability.1 The company expanded from 64 to 65 markets and from 23 to 24 states, a gradual expansion.12

Builder demand remains affected by cautious consumer sentiment and by incentives such as mortgage rate buydowns, and these conditions could continue to weigh on prices and volumes.2

Trends

  • Low housing affordabilityheadwind

    High mortgage rates have reduced affordability and lot demand, pushing the company to adjust prices and incentives.12

  • Demand for affordable lotstailwind

    The company focuses on lots for affordable homes, the segment with the most demand in the new home market.12

  • Municipal approval delaysheadwind

    Delays in municipal approvals are extending development cycles and keeping costs elevated in some markets.2

  • Easing supply chain disruptionstailwind

    Disruptions in construction material supply and labour tightness have largely subsided, shortening construction cycles.2

Competitive position

The company faces competition from local, regional and national developers, including homebuilders that develop their own lots.1 Some competitors are better established or have a lower cost of capital, which can raise land prices.1

The company's advantages are its national footprint, local teams, low net leverage and its strategic relationship with D.R. Horton, which may ease competitive pressure but also limits commercial independence.12

  • Local and private lot developers

    Most competitors are local or privately owned companies active in land acquisition and development without a significant national share.

  • Homebuilders that develop their own lots

    Some builders develop the lots on which they then build and sell homes, making them direct competitors for land.

  • Regional and national land developers

    A few regional and national developers compete for the same land and customers, sometimes with greater financial resources.

  • Investors competing for land and financing

    Competition for land, financing and labour can increase the bargaining power of owners who are selling.

News & filings

In the press

No news in our archive over the last 180 days.

SEC filings

Sources

  1. [1] Form 10-K, fiscal year ended 2025-09-30 · SEC / Forestar Group Inc. · 19 Nov 2025
  2. [2] Form 10-Q, quarter ended 2026-06-30 · SEC / Forestar Group Inc. · 22 Jul 2026
  3. [3] Form 8-K, results release (exhibit 99.1) · SEC / Forestar Group Inc. · 21 Jul 2026

Figures computed by olivLaw from SEC filings and closing prices; the qualitative analysis is AI-generated from cited sources. Not investment advice.