Forestar Group Inc (NYSE:FOR) Q4 2025 Earnings: Revenue and EPS Surpass Estimates

Forestar Group Inc (NYSE:FOR) reported financial results for its fourth quarter and fiscal year ended September 30, 2025, delivering a performance that notably exceeded analyst expectations on the top and bottom lines. The residential lot developer's strong quarterly results were met with a positive market reaction, with shares rising over 7% in pre-market trading following the announcement.

Earnings and Revenue Performance Versus Estimates

The company's fourth-quarter results significantly surpassed Wall Street forecasts, driven by higher average lot prices and strategic execution.

• Earnings Per Share (EPS): Forestar reported Q4 diluted EPS of $1.70, comfortably beating the analyst estimate of $1.27.
• Revenue: Quarterly revenue reached $670.5 million, a 22% year-over-year increase and substantially higher than the $562.2 million analysts had projected.
• Full-Year Context: For the entire fiscal year 2025, revenue increased 10% to $1.66 billion, while net income decreased 17% to $167.9 million, or $3.29 per diluted share.

The market's positive pre-market response appears to be a direct reflection of this earnings and revenue beat, indicating investor approval of the company's ability to outperform expectations in the current economic environment.

Operational and Financial Highlights

Beyond the headline earnings figures, the press release detailed several key operational and financial metrics that underpin the company's performance.

• Lot Sales and Pricing: The number of lots sold in the fourth quarter decreased 9% to 4,891. However, a significant 24% increase in the average sales price per lot to $115,700 helped drive the substantial revenue growth for the period.
• Strong Balance Sheet: The company ended the fiscal year with a robust liquidity position of $968.1 million, comprising $379.2 million in unrestricted cash and $588.9 million in available borrowing capacity. The net debt to total capital ratio stood at a conservative 19.3%.
• Contracted Future Revenue: Forestar's owned lot position included 23,800 lots under contract for sale at September 30, 2025, representing approximately $2.1 billion of future revenue. This provides a degree of visibility for future earnings.
• Return on Equity: The company reported a return on equity of 10.1% for the fiscal year.

Forward Outlook and Analyst Estimates

Looking ahead, Forestar provided guidance for fiscal 2026 that aligns closely with current analyst projections, suggesting a year of stable performance.

The company expects to deliver between 14,000 and 15,000 lots, generating revenue in the range of $1.6 billion to $1.7 billion. This company outlook sits squarely within the vicinity of the analyst sales estimate of $1.689 billion for the full year 2026. For the upcoming first quarter, analysts are estimating revenue of $268.3 million.

Chairman Donald J. Tomnitz expressed confidence in the company's position, stating, "Forestar is uniquely positioned to consistently supply finished lots that are essential to the homebuilding industry. Our strong balance sheet and liquidity allow us to remain agile and resilient through changing market conditions."

Conclusion

Forestar Group's fourth-quarter earnings report demonstrated a clear ability to exceed financial expectations despite a lower volume of lots sold, leveraging higher pricing to drive revenue growth and profitability. The company's solid balance sheet and $2.1 billion in contracted future revenue provide a foundation for its stated goal of maximizing returns and driving long-term shareholder value. The initial market reaction suggests investors are rewarding this outperformance and the company's steady outlook for the year ahead.

For a more detailed look at Forestar's historical earnings and future estimates, you can review the data here.

Disclaimer: This article is for informational purposes only and does not constitute investment advice, financial analysis, or a recommendation to buy or sell any security. The performance data and estimates referenced are based on publicly available information and are subject to change. Readers should conduct their own research and consult with a qualified financial advisor before making any investment decisions.