Forestar Group Inc.

Forestar reported Q3 revenue of $407 million, up 4% year over year from $391 million, on 3.66 thousand lots sold. Net income attributable to Forestar increased 9% to $35.9 million, or $0.70 per diluted share, versus $32.9 million or $0.65 per share last year. Pretax income rose 12% to $48.7 million and pretax margin improved to 12.1% from 11.2%; gross profit margin was 20.7% versus 20.4% a year ago. SG&A was $38.3 million, or 9.4% of revenue, down from 9.6%. For fiscal 26, management maintained lot delivery guidance of 14,000 to 14,500 lots and revenue guidance of $1.6 billion to $1.7 billion.

CEO Andy Oxley said the quarter reflected solid execution despite affordability constraints and cautious consumer sentiment. He emphasized disciplined inventory investment, a strong balance sheet, and the company’s ability to flex the pace and price of lot sales by market. Oxley highlighted the 100,000th lot delivered since D.R. Horton’s 2017 investment and said Forestar is positioned to gain market share over time.

CFO James Allen highlighted stronger profitability metrics, including 9% net income growth to $35.9 million, 12% pretax income growth to $48.7 million, and pretax margin expansion to 12.1%. He also pointed to a strong liquidity position of about $1.1 billion, including $395 million of unrestricted cash and $670 million of revolver capacity, with total debt of $794 million and net debt to capital of 17.7%. Allen said book value per share increased 10% year over year to $36.40 and noted that the company expects to invest about $1.4 billion in land acquisition and development in fiscal 26, subject to market conditions.

Analysts focused on land-market competition, market share growth into 2027, headcount strategy, cycle times, and margin pressure. Management said the land market has been relatively stable, with some easing in negotiation terms and a modest slowdown in development activity, but most markets remain slightly undersupplied. On headcount, Oxley said staffing was intentionally moderated after growth in 2024 and early 2025, but he expects headcount to rise in 2027 as more land capabilities are built out. On margins, management said the lower end of the historic gross margin range was mainly due to mix and a slower absorption environment, while direct costs have mostly stabilized rather than fallen sharply.