Forestar Q2 Earnings Decline, Revenue Up 5%; Beat Estimates
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Apr 01 2025
0mins
Should l Buy FOR?
Source: NASDAQ.COM
Financial Performance: Forestar Group Inc. reported a 30% decline in net income for the second quarter, with pre-tax income dropping to $40.7 million and earnings per share falling to $0.62, despite a 5% increase in revenue to $351 million.
Future Outlook: The company has revised its lot delivery expectations down to 15,000-15,500 lots, projecting revenue of $1.5 billion to $1.55 billion, which is lower than previous forecasts.
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Analyst Views on FOR
Wall Street analysts forecast FOR stock price to rise
2 Analyst Rating
1 Buy
1 Hold
0 Sell
Moderate Buy
Current: 29.730
Low
26.00
Averages
32.00
High
38.00
Current: 29.730
Low
26.00
Averages
32.00
High
38.00
About FOR
Forestar Group Inc. is a residential lot development company, which is focused on making investments in land acquisition and development to sell finished single-family residential lots to homebuilders. It manages its operations through its real estate segment. Its real estate segment conducts a wide range of project planning and management activities related to the entitlement, acquisition, community development and sale of residential lots. It primarily invests in entitled short-duration projects that can be developed in phases, enables to complete and sell lots at a pace that matches market demand. The Company has diversified its lot development operations across 62 markets in 24 states. Its customers are primarily local, regional and national homebuilders.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Forestar Group (NYSE:FOR) Reports 9% Revenue Growth to $273 Million in Q1
- Revenue Growth: Forestar Group reported Q1 revenues of $273 million, marking a 9% increase year-over-year, indicating stable performance amidst challenges in demand.
- Net Income Decline: Net income fell to $15.4 million, with diluted earnings per share at $0.3, down from $16.5 million and $0.32 in the prior year, reflecting cost pressures and changing market conditions.
- Strong Liquidity: The company ended the quarter with $820 million in liquidity, including $212 million in unrestricted cash and $608 million available on its revolving credit facility, showcasing robust financial health to support future investments and operations.
- Contracted Backlog: Forestar Group maintains a contracted backlog with visibility towards $2.2 billion in future revenue, demonstrating its competitive position and growth potential despite fluctuations in market demand.
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Forestar Group (FOR) Q1 Revenue Grows 9% to $273M, Beats Estimates
- Strong Revenue Performance: Forestar Group reported Q1 revenue of $273 million, marking a 9% year-over-year increase that exceeded market expectations by $7.52 million, indicating robust demand and competitive strength in land development.
- Impressive Sales Figures: The company sold 1,944 lots during the quarter, further solidifying its market position, while owning and controlling a total of 101,000 lots, laying a solid foundation for future growth.
- Future Revenue Potential: Forestar has 24,100 lots contracted for sale, representing an anticipated future revenue of $2.2 billion, which will provide substantial cash flow support for the company.
- Increase in Book Value: The book value per share rose by 10% to $35.10, reflecting asset appreciation and improved financial health, thereby boosting investor confidence.
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Forestar Group Inc. (FOR) Reports Q1 Profit Drop to $15.4M Despite 9% Revenue Growth
- Profit Decline: Forestar's Q1 net profit fell to $15.4 million, or $0.30 per share, down from $16.5 million and $0.32 last year, aligning with market expectations and indicating pressure on profitability.
- Revenue Growth: The company reported a 9% increase in revenue to $273 million, up from $250.4 million last year, demonstrating strong sales performance despite the profit decline.
- Future Outlook: Chairman Donald J. Tomnitz stated that for fiscal 2026, the company expects to deliver between 14,000 and 15,000 lots, generating projected revenues of $1.6 billion to $1.7 billion, reflecting confidence in future growth.
- Stock Price Reaction: Forestar's stock rose by 0.36% to $27.50 in pre-market trading on the New York Stock Exchange, indicating a positive market response to the company's performance.
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- Market Sentiment: Investors are adopting a cautious stance ahead of these earnings announcements, particularly given the backdrop of increasing economic uncertainty, which could lead to heightened market volatility.
- Sector Impact: The earnings results from these companies will provide critical performance benchmarks for their respective industries, especially in manufacturing and financial services, potentially influencing investor confidence.
- Earnings Season Schedule: Additionally, other firms such as Fifth Third Bank (FITB) and Ford (FOR) are also slated to report at the same time, further enriching the dynamics of the ongoing earnings season.
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- Revenue Expectations: The anticipated revenue for Q1 is $265.48 million, representing a 6.0% year-over-year increase, indicating the company's sustained growth potential in land development despite market challenges.
- Historical Performance: Over the past two years, Forestar has beaten EPS and revenue estimates 75% of the time, demonstrating financial stability and market adaptability, which could enhance investor trust.
- Estimate Revisions: In the last three months, both EPS and revenue estimates have seen one upward revision, reflecting analysts' cautious optimism regarding the company's future performance, potentially influencing short-term market reactions.
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Forestar Group (NYSE:FOR) Reports 9% Revenue Growth to $273 Million in Q1
- Revenue Growth: Forestar Group reported Q1 revenues of $273 million, marking a 9% increase year-over-year, indicating stable performance amidst challenges in demand.
- Net Income Decline: Net income fell to $15.4 million, with diluted earnings per share at $0.3, down from $16.5 million and $0.32 in the prior year, reflecting cost pressures and changing market conditions.
- Strong Liquidity: The company ended the quarter with $820 million in liquidity, including $212 million in unrestricted cash and $608 million available on its revolving credit facility, showcasing robust financial health to support future investments and operations.
- Contracted Backlog: Forestar Group maintains a contracted backlog with visibility towards $2.2 billion in future revenue, demonstrating its competitive position and growth potential despite fluctuations in market demand.
See More
Forestar Group (FOR) Q1 Revenue Grows 9% to $273M, Beats Estimates
- Strong Revenue Performance: Forestar Group reported Q1 revenue of $273 million, marking a 9% year-over-year increase that exceeded market expectations by $7.52 million, indicating robust demand and competitive strength in land development.
- Impressive Sales Figures: The company sold 1,944 lots during the quarter, further solidifying its market position, while owning and controlling a total of 101,000 lots, laying a solid foundation for future growth.
- Future Revenue Potential: Forestar has 24,100 lots contracted for sale, representing an anticipated future revenue of $2.2 billion, which will provide substantial cash flow support for the company.
- Increase in Book Value: The book value per share rose by 10% to $35.10, reflecting asset appreciation and improved financial health, thereby boosting investor confidence.
See More
Forestar Group Inc. (FOR) Reports Q1 Profit Drop to $15.4M Despite 9% Revenue Growth
- Profit Decline: Forestar's Q1 net profit fell to $15.4 million, or $0.30 per share, down from $16.5 million and $0.32 last year, aligning with market expectations and indicating pressure on profitability.
- Revenue Growth: The company reported a 9% increase in revenue to $273 million, up from $250.4 million last year, demonstrating strong sales performance despite the profit decline.
- Future Outlook: Chairman Donald J. Tomnitz stated that for fiscal 2026, the company expects to deliver between 14,000 and 15,000 lots, generating projected revenues of $1.6 billion to $1.7 billion, reflecting confidence in future growth.
- Stock Price Reaction: Forestar's stock rose by 0.36% to $27.50 in pre-market trading on the New York Stock Exchange, indicating a positive market response to the company's performance.
See More
3M, U.S. Bancorp, and Others Set to Report Earnings Before Tuesday's Open
- Earnings Preview: Before Tuesday's market open, major companies including 3M (MMM), U.S. Bancorp (USB), and D.R. Horton (DHI) are set to release their earnings reports, with market participants keenly awaiting their performance and guidance.
- Market Sentiment: Investors are adopting a cautious stance ahead of these earnings announcements, particularly given the backdrop of increasing economic uncertainty, which could lead to heightened market volatility.
- Sector Impact: The earnings results from these companies will provide critical performance benchmarks for their respective industries, especially in manufacturing and financial services, potentially influencing investor confidence.
- Earnings Season Schedule: Additionally, other firms such as Fifth Third Bank (FITB) and Ford (FOR) are also slated to report at the same time, further enriching the dynamics of the ongoing earnings season.
See More
Forestar Group (FOR) to Announce Q1 Earnings on January 20, EPS Estimate at $0.30
- Earnings Announcement: Forestar Group is set to release its Q1 2023 earnings on January 20 before market open, with a consensus EPS estimate of $0.30, reflecting a 6.3% year-over-year decline, which may impact investor confidence in the company's profitability.
- Revenue Expectations: The anticipated revenue for Q1 is $265.48 million, representing a 6.0% year-over-year increase, indicating the company's sustained growth potential in land development despite market challenges.
- Historical Performance: Over the past two years, Forestar has beaten EPS and revenue estimates 75% of the time, demonstrating financial stability and market adaptability, which could enhance investor trust.
- Estimate Revisions: In the last three months, both EPS and revenue estimates have seen one upward revision, reflecting analysts' cautious optimism regarding the company's future performance, potentially influencing short-term market reactions.
See More
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- Market Analysis Platform Launch: Fortrade has introduced a new Market Analysis page designed to provide traders with a comprehensive view of global market dynamics, integrating daily market reviews, weekly summaries, and detailed micro-analysis to help users make informed trading decisions in an uncertain economic landscape.
- Information Integration and Support: The platform not only offers in-depth analysis of price movements, economic sentiment, and technical trends but also includes a calendar for upcoming financial events and special reports on high-impact instruments, enhancing users' knowledge and confidence.
- Combining Technology and Service: As a multi-regulated broker, Fortrade is committed to strengthening its position as a provider of online trading solutions through reliable technology and a secure trading environment, ensuring a consistent trading experience for both beginners and experienced traders.
- Customer Safety Priority: Fortrade's CEO Chris Warburton emphasizes that the Market Analysis section is part of their mission to help clients feel secure in their trading, while also integrating their trading platforms and customer service to enhance the overall user experience.
See More
