Forestar Group Inc. (NYSE: FOR) announced robust financial results for the fourth quarter of fiscal year 2025, surpassing earnings expectations. The company reported earnings per share (EPS) of $1.70, significantly higher than the anticipated $1.17. This positive performance is attributed to strong revenue growth and effective management strategies despite ongoing market challenges.
During the earnings call held on October 28, 2025, Chris Hibbetts, Vice President of Finance and Investor Relations, emphasized the company’s commitment to transparency, noting that forward-looking statements made during the call are based on reasonable assumptions but may not guarantee future results. He also highlighted that comprehensive details regarding potential risks are available in the company’s annual report filed with the Securities and Exchange Commission.
Andy Oxley, President and CEO of Forestar, detailed the company’s achievements, including over $670 million in revenue for the fourth quarter and total annual revenues reaching $1.7 billion. This represents a 10% increase in annual revenues compared to the previous year, showcasing the resilience of Forestar’s business model in a challenging environment marked by affordability constraints and cautious consumer sentiment.
The company reported a net income of $87 million for the fourth quarter, up 7%, and a total net income of $167.9 million for the year. Oxley noted that the increase in book value per share to $34.78 marks an 11% rise year-over-year.
Forestar’s strategic investments have proven fruitful, as the company has allocated over $7.3 billion in land acquisition and development over the last five years. This investment has resulted in the delivery of more than 75,000 finished lots to approximately 60 homebuilders, reinforcing Forestar’s position as a key player in the lot development industry.
Strategic Goals and Market Position
Looking ahead to fiscal 2026, Forestar aims to continue executing its strategic plan by focusing on growth investments, maximizing returns, and consolidating its market presence in the fragmented lot development sector. Oxley expressed confidence in Forestar’s ability to navigate current market conditions, underscoring the company’s financial strength and operational expertise.
During the call, Jim Allen, Chief Financial Officer, detailed fourth-quarter financial specifics. He reported a gross profit margin of 22.3%, though slightly down from the previous year due to an unusually high-margin project. Revenues for the fourth quarter represented a 22% increase, driven by sales of 4,891 lots at an average sales price of $115,700.
Despite the slow new home sales influenced by affordability issues, Forestar remains focused on providing finished lots for entry-level and first-time buyers. The company’s operational efficiency and partnerships with trade contractors have allowed for improved cycle times in lot development, even amid governmental delays.
Outlook and Market Dynamics
Forestar’s strong relationship with its largest customer, D.R. Horton, is pivotal to its market strategy. Approximately 15% of homes started by D.R. Horton this year were on lots developed by Forestar, with aspirations to increase this figure significantly.
In terms of financial health, the company reported a liquidity position of $968 million, including $379 million in cash and $589 million available on its undrawn revolving credit facility. Forestar’s capital structure provides a competitive advantage, allowing for flexibility and opportunities in a challenging market where project-level loans are less accessible and more costly.
As the earnings call concluded, Oxley reaffirmed the company’s strategic focus on disciplined growth and market share consolidation. He indicated that while home affordability challenges and cautious buyer sentiment may impact demand in the near term, Forestar is well-positioned to capture long-term growth in the lot development market.
With plans to deliver between 14,000 and 15,000 lots and generate revenues between $1.6 billion and $1.7 billion in fiscal 2026, Forestar Group Inc. remains committed to advancing its market presence and achieving sustainable growth.
