Forestar Group Inc. (NYSE: FOR), a residential lot development company and majority-owned subsidiary of D.R. Horton, Inc., reported First Quarter Fiscal 2026 Results on January 21, 2026. Shares traded marginally lower in line with broader market trends.
Market Capitalization
As of January 20, 2026, Forestar Group Inc. had a market capitalization of approximately $1.35 billion. The company has approximately 50.9 million shares outstanding.
Latest Quarterly Results
Q1 FY2026 Financial Highlights:
Revenue: $273.0 million, up 9% from $250.4 million in Q1 FY2025.
Net Income: $15.4 million, or $0.30 per diluted share, compared to $16.5 million, or $0.32 per diluted share in Q1 FY2025.
Pre-tax Income: $20.4 million compared to $21.9 million in the prior year period.
Gross Profit: $51.9 million with a gross profit margin of 19.0%, compared to $46.9 million and 18.7% in Q1 FY2025.
Lots Sold: 1,944 residential lots, down from 2,333 lots in Q1 FY2025.
Average Sales Price Per Lot: $120,700, up 31% from $92,400 in the prior year period.
Balance Sheet Highlights
As of December 31, 2025:
– Real Estate Assets: $2.85 billion
– Total Assets: $3.18 billion
– Total Debt: $793.2 million
– Stockholders’ Equity: $1.79 billion
– Book Value Per Share: $35.10, up 10% year-over-year
– Net Debt to Capital: 24.6%
– Total Liquidity: $819.3 million
Financial Trends
Chart 1: Quarterly Operating Performance
Chart 2: 3-Month Trading Volume Trend
Full-Year Context
Forestar delivered solid results in its first quarter of fiscal 2026 amid varying market conditions. For full-year fiscal 2025, the company generated revenue of $1.48 billion and sold 14,084 residential lots. Return on equity was 9.8% on a trailing twelve-month basis. The company continues to execute its strategy of providing finished lots primarily to D.R. Horton while also serving other homebuilders.
Business and Operations Update
Operational Metrics:
– Lots Owned and Controlled: 97,400 (57,700 owned, 39,700 controlled)
– Contracted Lot Sales Backlog: 16,800 lots valued at $1.8 billion
– Lots Under Development: 32,200
– Active Projects: Operating in 54 markets across 22 states
The company’s lot development pipeline remains robust with significant backlog providing revenue visibility. Forestar focuses on acquiring entitled or near-entitled land parcels and developing finished lots for sale to homebuilders.
Strategic Relationship
D.R. Horton, Inc. owns approximately 62% of Forestar’s outstanding common stock. The strategic relationship between Forestar and D.R. Horton continues to drive operational efficiency and growth opportunities. D.R. Horton represented a significant portion of Forestar’s lot sales during the quarter, while Forestar also sells to other national and regional homebuilders.
Institutional Coverage
Forestar Group is followed by multiple equity research analysts covering the homebuilding and land development sector. The company’s unique position as a pure-play residential lot developer with a strategic relationship to the nation’s largest homebuilder provides differentiated exposure to the housing market.
Guidance and Outlook
Fiscal 2026 Full-Year Guidance:
– Lots Sold: 14,000 to 15,000 residential lots
– Revenue: $1.6 billion to $1.7 billion
Management noted that market conditions remain supportive of lot development activity. The company expects to continue growing its lot development operations while maintaining financial flexibility and a strong balance sheet position.
Performance Summary
Forestar Group Inc. reported Q1 FY2026 revenue of $273.0 million (up 9% YoY) and net income of $15.4 million ($0.30 EPS). The company sold 1,944 lots at an average price of $120,700, reflecting higher-value lot mix. Book value per share increased 10% to $35.10 while net debt to capital remained conservative at 24.6%. The contracted backlog of 16,800 lots valued at $1.8 billion provides solid revenue visibility. Management maintained full-year fiscal 2026 guidance for 14,000-15,000 lots and $1.6 billion to $1.7 billion in revenue.