Forestar affirms FY26 guidance as Q3 revenue rises 4%
Forestar Group reported a 4% increase in third-quarter revenues to $407 million and an 8% rise in diluted EPS to $0.70, driven by the sale of 3,659 lots. The company affirmed its fiscal 2026 guidance for lot deliveries of 14,000 to 14,500 and revenue of $1.6 billion to $1.7 billion, supported by $1.1 billion in liquidity and a contracted backlog of $2.3 billion.
*this image is generated using AI for illustrative purposes only.
Forestar Group reported third-quarter revenues of $407 million, a 4% increase from the prior-year quarter, driven by the sale of 3,659 lots. Earnings per diluted share rose 8% to $0.70, while pre-tax income increased 12% to $48.7 million, achieving a pre-tax profit margin of 12.0%. The company maintained its fiscal 2026 lot delivery guidance of 14,000 to 14,500 lots and revenue guidance of $1.6 billion to $1.7 billion, despite challenges in home affordability and consumer sentiment.
For the nine months ended June 30, 2026, net income attributable to Forestar increased 3% to $83.5 million, or $1.63 per diluted share. Revenues for the period increased 6% to $1.1 billion from $1.0 billion in the same period of fiscal 2025. The company’s return on equity stood at 9.6% for the trailing twelve months ended June 30, 2026.
Financial Performance
The company’s balance sheet reflects total assets of $3,220.6 million as of June 30, 2026. Real estate assets were valued at $2.7 billion, while cash and cash equivalents totaled $394.9 million. Stockholders’ equity increased to $1,856.6 million, with book value per share rising 10% to $36.40.
| Metric | Three Months Ended June 30, 2026 | Three Months Ended June 30, 2025 | Nine Months Ended June 30, 2026 | Nine Months Ended June 30, 2025 |
|---|---|---|---|---|
| Revenues | $407.0 million | $390.5 million | $1,054.3 million | $991.9 million |
| Net income attributable to Forestar | $35.9 million | $32.9 million | $83.5 million | $81.0 million |
| Diluted net income per common share | $0.70 | $0.65 | $1.63 | $1.59 |
Operational Results
Forestar’s lot position at June 30, 2026, consisted of 91,700 lots, comprising 62,200 owned lots and 29,500 controlled lots. The company reached a milestone of delivering its 100,000th lot during the quarter. Of the owned lots, 23,500 were under contract to be sold, representing approximately $2.3 billion of future revenue, secured by $202 million of hard earnest money deposits. Additionally, 19,200 owned lots were subject to a right of first offer to D.R. Horton based on executed purchase and sale agreements.
The company sold 289 lots, or 8% of its third-quarter deliveries, to 12 other customers outside of D.R. Horton. Management noted that 14% of the homes D.R. Horton started in the past 12 months were on a Forestar Group developed lot, with a mutually stated goal of increasing this ratio.
Capital Structure and Outlook
Forestar ended the quarter with total liquidity of $1.1 billion, comprising $394.9 million of unrestricted cash and $669.9 million of available borrowing capacity. Debt totaled $793.8 million, with no senior note maturities due in the next twelve months. The net debt to total capital ratio was 17.7%. The company plans to invest approximately $1.4 billion in land acquisition and development in fiscal 2026, subject to market conditions.
How will persistent challenges in home affordability and consumer sentiment impact the company's ability to meet its fiscal 2026 lot delivery guidance?
What specific strategies will Forestar employ to increase the percentage of D.R. Horton homes built on its lots beyond the current 14%?
With $1.1 billion in total liquidity, how does the company plan to balance its $1.4 billion capital investment plan against potential market downturns?
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