Abstract

Forestar Group Inc. will report its quarterly results on January 20, 2026, Pre-Market. This preview synthesizes company guidance, last-quarter results, and recent institutional commentary to frame expectations for revenue, profitability, and earnings per share through the near term.

Market Forecast

Consensus expectations and Forestar Group Inc.’s projections indicate current-quarter revenue of USD 260.97 million, a year-over-year decline of 20.63%, with forecast EBIT at USD 19.17 million, EPS at USD 0.32, and softer profitability implied by negative year-over-year trajectories for EPS and EBIT; year-over-year figures are EPS at -54.75% and EBIT at -57.13%. The company’s main business is residential real estate lot sales, which remains the central revenue driver with ongoing demand normalization and tighter margins amid housing affordability constraints. The most promising segment is residential real estate, which generated USD 1.54 billion last quarter; management is focused on scalable community development and streamlined lot delivery, although near-term year-over-year momentum is moderating.

Last Quarter Review

Forestar Group Inc. delivered prior-quarter revenue of USD 670.50 million, a gross profit margin of 22.31%, GAAP net profit attributable to the parent company of USD 86.90 million, a net profit margin of 12.96%, and adjusted EPS of USD 1.70, with year-over-year growth for revenue at 21.60% and adjusted EPS at 6.25%. Net profit rose sequentially by 164.13%, reflecting improved operating leverage and favorable mix, while gross margin held above 20.00% on disciplined land acquisition and development execution. The main business highlights centered on residential real estate, where revenue reached USD 1.54 billion for the quarter, supported by project deliveries and lot closings; residential areas and other contributed USD 118.10 million.

Current Quarter Outlook

Residential Real Estate (Main Business)

Forestar Group Inc.’s core engine remains residential real estate lot sales across master-planned communities. The forecasted revenue of USD 260.97 million and EPS of USD 0.32 signal a slower quarter relative to the preceding period, consistent with seasonal lot delivery patterns and a high prior-quarter base. Margins are forecast to compress versus last year, implied by the year-over-year declines of 57.13% for EBIT and 54.75% for EPS, as land development cost inflation intersects with cautious builder pacing. Management’s focus on maintaining a disciplined pipeline should support gross margin resilience near the low-20.00% range, hinging on efficient entitlement cycles and selective investment in higher-velocity submarkets. The quarter’s performance will be shaped by the cadence of closings within large communities and the extent to which affordability improves with stable mortgage rates.

Residential Segment with Largest Growth Potential

The residential segment, which produced USD 1.54 billion last quarter, continues to offer the largest growth opportunity through incremental community expansions and targeted lot releases to national and regional builders. The scale achieved in recent quarters positions Forestar Group Inc. to convert backlog into revenue, but quarter-to-quarter variability is inherent in the lot closing schedule. The growth pathway is underpinned by breadth across geographies, allowing the company to pivot into markets with stronger absorption while keeping capital deployment disciplined. Over the current quarter, a more modest revenue run-rate is anticipated; however, the pipeline remains constructive for medium-term growth if construction lending stays available and builders retain demand visibility.

Key Factors Impacting the Stock Price This Quarter

Investor focus will center on the magnitude of year-over-year declines in EPS and EBIT versus management’s commentary on margin preservation and lot demand. The market will parse whether the anticipated revenue of USD 260.97 million marks a trough or whether further moderation is likely, considering the prior quarter’s outsized volume. Commentary on land spend and returns on invested capital will be monitored for signals of capital discipline amid a normalized demand environment. Any updates to gross margin outlook, visibility on closings within larger communities, and the balance of price versus volume in lot sales will guide sentiment, especially as affordability and builder starts drive incremental variance.

Analyst Opinions

The preponderance of recently cited institutional views are cautious, leaning toward moderation rather than acceleration for the current quarter given the forecast declines in EPS and EBIT. Analysts highlight the sequential drop-off from last quarter’s strong performance and the year-over-year compression in profitability as near-term constraints. Commentary emphasizes monitoring lot closing schedules and margin trajectory, with expectations that management will underscore discipline in land acquisition and controlled capital deployment to navigate a balanced housing market. The cautious stance reflects the consensus that revenue at USD 260.97 million and EPS at USD 0.32 represent a normalized quarter, and that confirmation of stable gross margins and steady lot absorption will be required to support a constructive medium-term view.