Shares of Forestar Group Inc. (FOR) soared 5.34% in pre-market trading on Tuesday following the release of its fiscal 2025 third-quarter results. The national residential lot developer reported a significant 23% increase in revenue, reaching $390.5 million, slightly beating analyst expectations of $384.7 million.

Despite the challenging macro environment, Forestar demonstrated resilience in its core business. The company reported an 11% increase in residential lots sold, totaling 3,605 for the quarter. This growth in lot sales, coupled with the revenue beat, appears to have boosted investor confidence.

While Forestar updated its fiscal 2025 lot delivery guidance to 14,500-15,000 lots, slightly lower than the previous guidance of 15,000-15,500 lots, the company maintained its revenue guidance for the fiscal year at $1.50 billion to $1.55 billion. This decision to maintain revenue projections despite lowering lot delivery expectations suggests potential for higher pricing or a more favorable product mix.

Investors seem particularly encouraged by Forestar's strong balance sheet, substantial operating platform, and strategic relationship with D.R. Horton. The company also highlighted $2.3 billion in contracted future revenue, indicating a solid pipeline for future growth. These factors, combined with Forestar's disciplined approach to capital allocation, appear to be driving the pre-market stock surge as investors anticipate long-term value creation.