FOR

Download the Complete Report Here Key Takeaways: 3Q FY26 results increasingly reflected ALCO’s post-citrus operating model, with the revenue base now centered on land-management activities. Revenue increased 7.7% y/y to $9.0 million from $8.4 million, as Land Management and Other Operations revenue rose to $7.9 million from $0.6 million, more than offsetting the 85.6% decline in Alico Citrus revenue to $1.1 million from $7.8 million following completion of the final significant citrus harvest. Net income improved to $2.1 million from a loss of $18.3 million y/y, while adjusted EBITDA was $4.6 million and FY26 guidance was raised to approximately $15 million. Beginning in 3Q FY26 (q/e June 30, 2026), ALCO also moved to a single reportable segment following substantial completion of the citrus wind-down, providing a structural marker that the citrus wind-down is substantially complete and the financial reporting increasingly reflects execution of the land-focused model. A key strategic development is ALCO’s new agricultural lease covering approximately 3,280 acres in Hendry County. The lease commenced July 1, 2026, and initially runs through June 30, 2027, with the lessee holding the right to extend it for an additional ten years. More importantly, the agreement includes an option to acquire approximately 3,280 acres for $29.52 million, or $9,000 per acre, if exercised by June 30, 2029, subject to annual escalation and certain acreage adjustments; an extended lease would push the option period through June 2031. Rather than choosing between leasing and selling the asset today, ALCO can therefore generate agricultural income while preserving exposure to future land-value realization. Recent transaction pricing continues to support upside to our agricultural land assumptions. The new purchase option is initially priced at approximately $9,000 per acre, while ALCO sold 3,546 acres during the first nine months of FY26 for $34.6 million, or approximately $9,761 per acre. Both sit materially above the $4,000-$5,000-per-acre assumptions used in the agricultural component of our valuation framework. The broad consistency between recent realized pricing and the new option value provides further evidence that these assumptions leave meaningful room for upside as additional acreage is monetized. While values will vary by location, infrastructure and development potential, the latest transaction evidence supports upside to conservative portfolio assumptions. Corkscrew Grove East Village has moved beyond the local entitlement milestone achieved in April and into the state and federal permitting phase, progressively reducing the regulatory discount embedded in ALCO’s largest development asset. Corkscrew Grove Villages encompasses approximately 4,660 acres and is planned as two master-planned villages supporting roughly 9,000 homes, including approximately 750 affordable units, and approximately 480,000 square feet of commercial uses. More than 6,000 surrounding acres are expected to enter permanent conservation. Following Collier County approval, the remaining process includes permits from the South Florida Water Management District, U.S. Army Corps of Engineers and U.S. Fish and Wildlife Service, with construction potentially beginning in 2028 or 2029 if approvals are obtained. The Citree acquisition increases ALCO’s control over future land monetization by consolidating full ownership of approximately 1,200 acres in DeSoto County. ALCO acquired the remaining 49% interest in Citree for $2.0 million in cash and assumed sole responsibility for approximately $3.3 million of debt that was already reflected on ALCO’s consolidated balance sheet, eliminating the minority interest and giving the company sole discretion over future leasing, sale or other land-use decisions. Following the Citree transaction and recent land sales, ALCO’s owned portfolio stands at approximately 47,300 acres. Full ownership also allows ALCO to retain a greater share of any future value creation from the property, subject to contingent consideration tied to a sale above $12,000 per acre within 24 months. We view the transaction as a strategic step toward simplifying the portfolio and increasing control over monetization timing. The post-citrus cost structure continues to normalize, improving the durability of the underlying operating model. G&A declined 21.2% y/y in 3Q to $2.3 million, driven by lower employee expenses and insurance premiums, while management continues to review overhead following the citrus wind-down. A new office lease is expected to generate additional savings beginning in 2Q FY27. As the remaining legacy citrus costs roll off, ALCO should operate against a lower and more predictable expense base while new lease and land-management revenues build. Adjusted EBITDA remained positive in 3Q FY26, while the raised full-year outlook highlights the timing variability of ALCO’s transformed earnings model. Adjusted EBITDA was $4.6 million in 3Q FY26 versus $19.3 million in the prior-year quarter, with the y/y decline primarily reflecting lower crop-insurance proceeds and a lower gain on property sales. For the first nine months of FY26, adjusted EBITDA totaled $24.2 million versus $25.3 million a year ago. Despite 9M results already exceeding the full-year outlook, ALCO raised FY26 adjusted EBITDA guidance to approximately $15 million from $14 million, with 4Q expected to be an EBITDA usage quarter as revenue steps down materially while recurring property taxes and G&A continue. Stronger liquidity extends ALCO’s operating runway through FY29 without requiring additional asset sales. Cash increased to $55.6 million at June 30 from $38.1 million at FY25-end, while total debt remained essentially unchanged at approximately $85.4 million and net debt declined to $29.8 million from $47.4 million. Working capital reached $50.6 million with a 7.96x current ratio, compared with $49.2 million and 9.56x at September 2025, while ALCO had approximately $92.5 million of available borrowings under its line of credit against a minimum liquidity requirement of $5.8 million. The company now expects to end FY26 with approximately $48 million of cash and $37 million of net debt, improved from prior guidance of $40 million and $45 million, respectively, while maintaining only the minimum required $2.5 million balance on its revolving credit facility. This liquidity gives ALCO greater flexibility to advance development projects on its own timeline rather than relying on near-term asset sales. Inventory also declined to $0.2 million from $4.2 million at FY25-end, while assets held for sale declined from $9.2 million to zero, further reflecting the runoff of the legacy citrus balance-sheet footprint. Land monetization continued to fund the transformation while supporting capital returns and a stronger cash position. Nine-month operating cash flow was $2.3 million versus $22.8 million last year, with the $20.5 million decline largely attributable to significantly higher crop-insurance proceeds received in FY25. Investing cash flow contributed $28.2 million, driven by $35.0 million of property-sale proceeds and partially offset by the $5.1 million Corkscrew advance, while financing outflows totaled $13.1 million, principally reflecting $10.0 million of share repurchases and the $2.0 million Citree acquisition. The company repurchased 245,399 shares, including 38,059 shares in 3Q, and paid approximately $1.1 million of dividends through 9M FY26, returning more than $11 million to shareholders while still increasing cash by $17.5 million since fiscal year-end. Shares outstanding declined to approximately 7.42 million, leaving the company with greater flexibility to balance shareholder returns, entitlement investment and future land monetization. Disclaimer: Exec Edge does not publish proprietary estimates, ratings, price targets, or investment recommendations. The valuation discussion below is illustrative only and is based on company filings, management commentary, and third-party data and estimates. It does not constitute a recommendation, price target, rating, or prediction of future pricing. While we do not publish a formal price target for ALCO, our analysis suggests potential upside from current levels. In light of ALCO’s transition to a land-management-focused business model, we apply a sum-of-the-parts framework combining discounted cash flow analysis for near-term development with risk-adjusted asset values for longer-dated development and agricultural land. Any implied upside reflects the output of this framework and should not be interpreted as a formal price target. We value ALCO using a sum-of-the-parts (SOTP) framework that reflects the company’s evolution into a diversified land platform with distinct asset components and risk profiles. Our approach separates value across near-term development projects with defined execution visibility, longer-dated development optionality embedded in the broader land base, and the long-duration value of agricultural land and royalty streams. Near-term development is valued using a conservative discounted cash flow methodology, while longer-dated development and agricultural land value are incorporated on a risk-adjusted basis to reflect timing, liquidity, and execution uncertainty. We believe this framework more appropriately captures ALCO’s underlying asset value than a single consolidated DCF, while maintaining disciplined underwriting and a clear linkage between upside and execution. Illustrative Valuation. Combining our base-case DCF with risk-adjusted contributions from longer-dated development and agricultural land value, and adjusting for net debt, supports an implied equity value modestly above the current share price. We therefore arrive at an illustrative valuation of approximately $50 per share. Importantly, this upside is driven primarily by execution and entitlement progress rather than discount-rate compression or multiple expansion. As regulatory milestones are achieved and development visibility improves, we see scope for incremental value recognition over time. Recent land transactions continue to support potential upside to ALCO’s underlying land valuation. ALCO’s remaining portfolio comprises approximately 47,300 acres, while recent transaction evidence continues to support values materially above the $4,000-$5,000 per acre agricultural assumptions embedded in our conservative NPV framework. The new 3,280-acre purchase option is initially priced at approximately $9,000 per acre, broadly consistent with recent agricultural land-sale values, while ALCO sold 3,546 acres during the first nine months of FY26 for approximately $34.6 million, or roughly $9,761 per acre. While values vary materially by location, infrastructure and development potential, recent realized and contractual pricing provides additional support for upside to the agricultural component of our SOTP. Read Exec Edge’s Initiation on Alico Here Subscribe to our Weekly Newsletter to Receive All Research Contact: Executives-Edge.com [email protected] The post Alico 3Q Revenue Jumps on Booming Land Management Strategy – Quarterly Update Report appeared first on ExecEdge.

ARLINGTON, Texas, July 21, 2026--(BUSINESS WIRE)--Forestar Group Inc. ("Forestar") (NYSE: FOR), a leading national residential lot developer, today reported financial results for its third fiscal quarter ended June 30, 2026. Fiscal 2026 Third Quarter Highlights As of or for the quarter ended June 30, 2026, unless otherwise notedAll comparisons to the prior year quarter Net income attributable to Forestar increased 9% to $35.9 million or $0.70 per diluted share Pre-tax income increased 12% to $48.7 million, with a pre-tax profit margin of 12.0% Consolidated revenues increased 4% to $407.0 million on 3,659 lots sold Owned and controlled 91,700 lots 23,500 lots contracted for sale representing $2.3 billion of future revenue Real estate of $2.7 billion Total liquidity of $1.1 billion Net debt to total capital ratio of 17.7% Return on equity of 9.6% for the trailing twelve months ended June 30, 2026 Book value per share increased 10% to $36.40 Financial Results Net income attributable to Forestar for the third quarter of fiscal 2026 increased 9% to $35.9 million, or $0.70 per diluted share, compared to $32.9 million, or $0.65 per diluted share, in the same quarter of fiscal 2025. Pre-tax income for the quarter increased 12% to $48.7 million from $43.6 million in the same quarter of fiscal 2025. Revenues for the third quarter increased 4% to $407.0 million from $390.5 million in the same quarter of fiscal 2025. For the nine months ended June 30, 2026, net income attributable to Forestar increased 3% to $83.5 million, or $1.63 per diluted share, compared to $81.0 million, or $1.59 per diluted share, in the same period of fiscal 2025. Pre-tax income for the nine months ended June 30, 2026 increased 7% to $113.5 million from $106.2 million in the same period of fiscal 2025. Revenues for the first nine months of fiscal 2026 increased 6% to $1.1 billion from $1.0 billion in the same period of fiscal 2025. The Company’s return on equity was 9.6% for the trailing twelve months ended June 30, 2026. Return on equity is calculated as net income attributable to Forestar for the trailing twelve months divided by average stockholders’ equity, where average stockholders’ equity is the sum of ending stockholders’ equity balances of the trailing five quarters divided by five. Operational Results Lots sold during the third quarter increased 1% to 3,659 lots compared to 3,605 lots in the same quarter of fiscal 2025. During the third quarter of fiscal 2026, Forestar sold 289 lots to customers other than D.R. Horton, Inc. ("D.R. Horton") compared to 530 lots in the prior year quarter. Lots sold to customers other than D.R. Horton in the prior year quarter included 331 lots that were sold to a lot banker who expects to sell those lots to D.R. Horton at a future date. Lots sold during the nine months ended June 30, 2026 decreased 9% to 8,541 lots compared to 9,349 lots in the same period of fiscal 2025. During the nine months ended June 30, 2026, 1,094 lots were sold to customers other than D.R. Horton compared to 1,661 lots in the same period of fiscal 2025. Lots sold to customers other than D.R. Horton in the current year nine-month period included 146 lots that were sold to a lot banker who expects to sell those lots to D.R. Horton at a future date compared to 693 lots in the prior year period. The Company’s lot position at June 30, 2026 was 91,700 lots, of which 62,200 were owned and 29,500 were controlled through land and lot purchase contracts. Lots owned at June 30, 2026 included 9,600 that were fully developed. Of the Company’s owned lot position at June 30, 2026, 23,500 lots, or 38%, were under contract to be sold, representing approximately $2.3 billion of future revenue. Another 19,200 lots, or 31%, of the Company’s owned lots were subject to a right of first offer to D.R. Horton based on executed purchase and sale agreements at June 30, 2026. Capital Structure, Leverage and Liquidity Forestar ended the quarter with $394.9 million of unrestricted cash and $669.9 million of available borrowing capacity on its senior unsecured revolving credit facility for total liquidity of $1.1 billion. Debt at June 30, 2026 totaled $793.8 million, with no senior note maturities in the next twelve months. The Company’s net debt to total capital ratio at the end of the quarter was 17.7%. Net debt to total capital consists of debt net of unrestricted cash divided by stockholders’ equity plus debt net of unrestricted cash. Outlook Donald J. Tomnitz, Chairman of the Board, said, "The Forestar team delivered solid third quarter results, including a 4% increase in revenues to $407.0 million and a 12% increase in pre-tax income to $48.7 million. Our liquidity increased to $1.1 billion, reflecting our disciplined approach to capital management amid continued affordability constraints and cautious consumer sentiment. We remain focused on maximizing returns across our projects by aligning the pace and price of lot sales with the timing of our investments and market demand. "Based on our fiscal year-to-date results and current market conditions, we are maintaining our fiscal 2026 lot delivery guidance of 14,000 to 14,500 lots and our revenue guidance of $1.6 billion to $1.7 billion. "Forestar is well positioned to continue supplying finished lots that are essential to the homebuilding industry. Our strong balance sheet and liquidity provide flexibility to navigate changing market conditions and capitalize on opportunities. We expect to continue aggregating market share, supported by our financial strength, broad operating platform, strategic relationship with D.R. Horton and $2.3 billion of contracted future revenue. We remain committed to disciplined capital allocation while positioning Forestar for growth and long-term shareholder value." Conference Call and Webcast Details The Company will host a conference call today (Tuesday, July 21) at 11:00 a.m. Eastern Time. The dial-in number is 888-506-0062, the entry code is 153808, and the call will also be webcast from the Company’s website at investor.forestar.com. Fourth Quarter Conference Call The Company plans to release financial results for its fourth quarter and fiscal year ended September 30, 2026 on October 29, 2026 before the market opens. The Company will host a conference call that morning at 11:00 a.m. Eastern Time. Details on how to access the conference call will be available at a later date. About Forestar Group Inc. Forestar Group Inc. is a residential lot development company with operations in 65 markets and 24 states. Based in Arlington, Texas, the Company delivered more than 13,400 residential lots during the twelve-month period ended June 30, 2026. Forestar is a majority-owned subsidiary of D.R. Horton, the largest homebuilder by volume in the United States since 2002. Forward-Looking Statements Portions of this document may constitute "forward-looking statements" as defined by the Private Securities Litigation Reform Act of 1995. Although Forestar believes any such statements are based on reasonable assumptions, there is no assurance that actual outcomes will not be materially different. All forward-looking statements are based upon information available to Forestar on the date this release was issued. Forestar does not undertake any obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Forward-looking statements in this release include we expect to deliver between 14,000 and 14,500 lots, generating $1.6 billion to $1.7 billion of revenue; Forestar is well positioned to continue supplying finished lots that are essential to the homebuilding industry; our strong balance sheet and liquidity provide flexibility to navigate changing market conditions and capitalize on opportunities; we expect to continue aggregating market share, supported by our financial strength, broad operating platform, strategic relationship with D.R. Horton and $2.3 billion of contracted future revenue; and we remain committed to disciplined capital allocation while positioning Forestar for growth and long-term shareholder value. Factors that may cause the actual results to be materially different from the future results expressed by the forward-looking statements include, but are not limited to: the effect of D.R. Horton’s controlling level of ownership on us and the holders of our securities; our ability to realize the potential benefits of the strategic relationship with D.R. Horton; the effect of our strategic relationship with D.R. Horton on our ability to maintain relationships with our customers; the cyclical nature of the homebuilding and lot development industries and changes in economic, real estate or other conditions; the impact of significant inflation, higher interest rates or deflation; supply shortages and other risks of acquiring land, construction materials and skilled labor; the effects of public health issues such as a major epidemic or pandemic on the economy and our business; the effects of weather conditions and natural disasters on our business and financial results; health and safety incidents relating to our operations; our ability to obtain or the availability of surety bonds to secure our performance related to construction and development activities and the pricing of bonds; the effects of information technology failures, cybersecurity incidents and the failure to satisfy privacy and data protection laws and regulations; the impact of governmental policies, laws or regulations and actions or restrictions of regulatory agencies; the effects of changes in income tax and securities law; our ability to achieve our strategic initiatives; continuing liabilities related to assets that have been sold; the cost and availability of property suitable for residential lot development; general economic, market or business conditions where our real estate activities are concentrated; our dependence on relationships with national, regional and local homebuilders; competitive conditions in our industry; obtaining reimbursements and other payments from governmental districts and other agencies and timing of such payments; our ability to succeed in new markets; the conditions of the capital markets and our ability to raise capital to fund expected growth; our ability to manage and service our debt and comply with our debt covenants, restrictions and limitations; the volatility of the market price and trading volume of our common stock; and our ability to hire and retain key personnel. Additional information about issues that could lead to material changes in performance is contained in Forestar’s annual report on Form 10-K and its most recent quarterly report on Form 10-Q, both of which are filed with the Securities and Exchange Commission. View source version on businesswire.com: https://www.businesswire.com/news/home/20260721189655/en/ Contacts Chris Hibbetts, 817-769-1860Vice President of Finance & Investor [email protected]

Interested in Forestar Group Inc? Here are five stocks we like better. Revenue and profit rose in Forestar’s fiscal third quarter, with revenue up 4% to $407 million and net income up 9% to $35.9 million. Pre-tax income and margins also improved, even as the company said affordability and cautious consumer sentiment are slowing new home sales. The company’s backlog remains strong, with 23,500 owned lots under contract expected to generate about $2.3 billion in future revenue. Forestar also maintains an important relationship with D.R. Horton, while still selling to other builders. Forestar kept its fiscal 2026 guidance unchanged, projecting 14,000 to 14,500 lot deliveries and $1.6 billion to $1.7 billion in revenue. Management highlighted a strong balance sheet with about $1.1 billion in liquidity and said the company has room to keep investing in land and development. Forestar Group (NYSE:FOR) reported higher fiscal third-quarter revenue and profit, while management said affordability pressures and cautious consumer sentiment continue to weigh on new home sales activity. The residential lot developer said revenue for the quarter rose 4% year over year to $407 million, driven by 3,659 lots sold. Net income attributable to Forestar increased 9% to $35.9 million, or $0.70 per diluted share, compared with $32.9 million, or $0.65 per diluted share, in the prior-year quarter. → Buyback Boom: These 3 Companies Are Betting Billions on Their Own Stocks President and CEO Andy Oxley characterized the quarter as “solid,” citing higher revenue and earnings, a stronger book value and substantial liquidity. “Ongoing affordability constraints and cautious consumer sentiment continue to impact the pace of new home sales,” Oxley said. “In response, we are managing our inventory investments with discipline and flexibility.” Chief Financial Officer Jim Allen said pre-tax income increased 12% to $48.7 million, up from $43.6 million a year earlier. Forestar’s pre-tax profit margin rose 80 basis points to 12%, compared with 11.2% in the prior-year period. → Cybersecurity Stocks Are Holding Up as the AI Trade Starts to Crack Chief Operating Officer Mark Walker said the company’s average sales price during the quarter was $108,800 per lot. He cautioned that the average sales price is expected to fluctuate from quarter to quarter depending on the geographic and lot-size mix of deliveries. Gross profit margin was 20.7%, compared with 20.4% in the same quarter last year. During the question-and-answer session, Allen said margins remained toward the lower end of the company’s historical range, reflecting both mix and “a slower absorption environment.” He said the company continues to manage price and pace on a project-by-project basis. → Strait of Hormuz Tensions Spike Tanker Trade: These 2 Stocks Are Set to Benefit On costs, Walker said direct costs have been relatively stable over the past 12 months, with reductions in some categories offset by increases in others. He said Forestar has not seen a large decrease in costs overall. Forestar ended the quarter with a total lot position of 91,700 lots, including 62,200 owned lots and 29,500 controlled through purchase contracts. Of the owned lots, 9,600 were finished at quarter-end, and management said the majority were under contract to sell. Walker said 23,500 owned lots, or 38% of the company’s owned lot position, were under contract at quarter-end. Those contracts were secured by $202 million of earnest money deposits and are expected to generate approximately $2.3 billion of future revenue. Another 31% of owned lots are subject to a right of first offer to D.R. Horton based on executed purchase and sale agreements, the company said. Allen emphasized the significance of D.R. Horton as Forestar’s largest customer. He said 14% of the homes D.R. Horton started over the past 12 months were on Forestar-developed lots. Forestar and D.R. Horton have a stated goal for one out of every three homes D.R. Horton sells to be on a lot developed by Forestar. Forestar also continued to sell lots to other builders, with 289 lots, or 8% of third-quarter deliveries, sold to 12 other customers during the quarter. Oxley said Forestar is maintaining its fiscal 2026 guidance for lot deliveries of 14,000 to 14,500 lots and revenue of $1.6 billion to $1.7 billion. He said the company has more than 200 active projects across its national footprint, giving it flexibility to allocate capital based on local demand and market conditions. Oxley also said Forestar reached a milestone during the quarter by delivering its 100,000th lot since D.R. Horton made its investment in the company in 2017. Management said the company remains focused on turning land and lot inventory efficiently, maximizing returns and consolidating market share in the fragmented lot development industry. Forestar ended the quarter with approximately $1.1 billion of liquidity, including $395 million of unrestricted cash and $670 million of available capacity on its undrawn revolving credit facility. Total debt was $793.8 million at June 30, with no senior note maturities in the next 12 months. The company’s net debt-to-capital ratio was 17.7%. Stockholders’ equity was $1.9 billion, and book value per share increased 10% from a year ago to $36.40. Allen said Forestar’s capital structure is a competitive advantage compared with land developers that rely on project-level land acquisition and development loans. He said those loans have become less available and more expensive in recent years and are typically more restrictive, carry floating rates and add administrative complexity. During the quarter, Forestar invested $312 million in land and land development. Chris Hibbetts, vice president of finance and investor relations, said roughly 80% of that investment went toward land development and 20% toward land acquisition. The company still expects to invest approximately $1.4 billion in land acquisition and development in fiscal 2026, subject to market conditions. In response to an analyst question about competition in the land market, Oxley said conditions have been “relatively stable,” with little change in land prices. He said Forestar has seen some improvement in negotiating terms, including takedowns and the ability to get through entitlement and permitting. Oxley said development activity appears somewhat lower across a number of markets, while most markets remain slightly undersupplied from a finished-lot perspective. He said that creates an opportunity for future growth. Walker said Forestar targets owning a three- to four-year supply of land and lots. He said the company’s owned lot supply is currently slightly above four years and that management feels good about its ability to grow market share, both with D.R. Horton and other builders. On development cycle times, Walker said contractor availability continues to improve and the company is able to use higher-rated contractors. He said cycle times have declined by close to six months over the past 36 months and are currently around 12 months. However, he said jurisdictional processes remain a bottleneck to further reductions. Oxley said home affordability constraints and cautious consumer sentiment are expected to remain near-term headwinds for home demand. Still, he said management remains confident in long-term demand for finished lots and Forestar’s ability to gain share. Forestar Group Inc, headquartered in Austin, Texas, is a residential lot development and management company focused on delivering finished home sites to homebuilders across the United States. The company acquires, entitles and develops land for single-family and multi-family housing, managing zoning, infrastructure and environmental approvals to prepare lots for construction. Forestar's integrated approach to land development spans from initial site acquisition through final lot delivery, providing homebuilders with ready-to-build parcels in a variety of markets. In addition to lot development, Forestar operates a retail homebuilding segment through joint ventures and strategic partnerships with national and regional homebuilders. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "Forestar Group Q3 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for July 2026.

Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. Performance growth was driven by a 4% revenue increase and 12% pretax income growth, supported by a scalable platform that recently reached the 100,000th lot delivery milestone. Management attributes the current demand environment to ongoing affordability constraints and cautious consumer sentiment, which have impacted the pace of new home sales. The company is utilizing its national footprint of over 200 active projects to strategically allocate capital based on local demand and market dynamics. Operational discipline is focused on turning land and lot inventory efficiently to maximize returns while maintaining a 3 to 4 year supply of land and lots. Forestar's capital structure is cited as a primary competitive advantage, as project-level loans have become more expensive and restrictive for smaller, fragmented competitors. The relationship with D.R. Horton remains a core growth driver, with Forestar aiming to eventually provide one out of every three lots sold by the homebuilder. Fiscal 2026 guidance is maintained with lot deliveries expected between 14,000 and 14,500 and revenue projected at $1.6 billion to $1.7 billion. The company plans to invest approximately $1.4 billion in land acquisition and development in fiscal 2026, subject to prevailing market conditions. Management expects headcount to remain relatively flat for the remainder of the year following a 9% year-over-year decline, with increases planned for 2027 to support Western expansion. Strategic focus remains on gaining market share from smaller developers who lack access to the same liquidity and efficient capital structures. Future growth is supported by a contracted backlog of $2.3 billion, which management views as a strong indicator of future revenue visibility. Gross profit margins of 20.7% were at the lower end of the historical 21% to 23% range, primarily due to geographic mix and a slower absorption environment. The company holds $1.1 billion in total liquidity, including $395 million in cash, providing a buffer against market volatility and enabling opportunistic M&A. Development cycle times have stabilized at approximately 12 months, down from peaks of 18 months, though municipal permitting remains a primary bottleneck. Direct horizontal construction costs have stabilized over the last 12 months, with increases in some categories offset by reductions in others. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here. Management noted that land prices have remained relatively stable, but they are seeing improved ability to negotiate better terms, such as land takedowns and shovel-ready deals. The market for finished lots remains slightly undersupplied in most regions, providing an opportunity for Forestar to grow share as overall development activity slows. The company intentionally moderated hiring in the second half of 2025 after significant growth earlier in the cycle. Headcount is expected to increase in 2027 as the company expands its land development capabilities, particularly in the Western United States. Management clarified that diesel costs were not a significant factor in the quarter; margin compression was primarily a result of product mix and managing the price-versus-pace trade-off. Horizontal costs have stabilized over the past year, and the company is seeing better availability of 'A-rated' contractors.

This article first appeared on GuruFocus. Revenue: $407 million, up 4% from the prior year quarter. Net Income: Increased 9% to $35.9 million. Earnings per Diluted Share: Increased 8% to $0.70. Pre-tax Income: Increased 12% to $48.7 million. Pre-tax Profit Margin: Increased 80 basis points to 12%. Gross Profit Margin: 20.7%, compared to 20.4% in the prior year quarter. SG&A Expense: Increased 2% to $38.3 million. Liquidity: Approximately $1.1 billion, including $395 million in unrestricted cash. Total Debt: $793.8 million with a net debt-to-capital ratio of 17.7%. Book Value per Share: Increased 10% to $36.40. Lots Sold: 3,659 lots with an average sales price of $108,800. Contracted Backlog: Visibility towards $2.3 billion of future revenue. Warning! GuruFocus has detected 4 Warning Sign with FOR. Is FOR fairly valued? Test your thesis with our free DCF calculator. Release Date: July 21, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Forestar Group Inc (NYSE:FOR) achieved a 4% increase in revenues to $407 million, with 3,659 lots sold in the third quarter. Earnings per diluted share rose by 8% to $0.70, and pre-tax income increased by 12% to $48.7 million. The company reached a significant milestone by delivering its 100,000th lot since D.R. Horton's investment in 2017. Forestar Group Inc (NYSE:FOR) maintains a strong liquidity position with approximately $1.1 billion, including $395 million in unrestricted cash. The company has a contracted backlog with visibility towards $2.3 billion of future revenue, indicating strong future prospects. Ongoing affordability constraints and cautious consumer sentiment are impacting the pace of new home sales. SG&A expenses increased by 2% to $38.3 million, although as a percentage of revenues, it decreased slightly. The company has moderated its land acquisition investments, which could impact future growth opportunities. Forestar Group Inc (NYSE:FOR) faces challenges in reducing cycle times further due to bottlenecks in governing jurisdictions. Gross profit margins were at the lower end of the historical range, partly due to a slower absorption environment. Q: Can you provide an update on the competition in the land market and how it relates to the current homebuyer market conditions? A: Anthony Oxley, President and CEO, stated that the land market has been relatively stable with no significant changes in land prices. There has been some improvement in negotiating terms, such as securing land on takedowns and focusing on shovel-ready deals. Overall, development activity is slightly less across several markets, but most remain slightly undersupplied, presenting growth opportunities. Q: With the decline in controlled lot count, do you believe your land position allows for market share growth in 2027? A: James Allen, CFO, mentioned that Forestar aims to maintain a three to four-year supply of owned lots, currently slightly over four years. The company feels confident about its ability to grow market share, not only with D.R. Horton but also with other builders, supported by a robust pipeline of future projects. Q: Are there any changes in the M&A pipeline or opportunities for growth through acquisitions? A: James Allen, CFO, indicated that there are ongoing opportunities for M&A, and maintaining strong liquidity is crucial to capitalize on these opportunities as they arise. Q: Why is Forestar not increasing headcount despite weaker market conditions, unlike in past periods? A: Anthony Oxley, President and CEO, explained that significant headcount growth occurred in 2024 and early 2025. The company has since moderated growth and plans to increase headcount in 2027 as they expand land capabilities, particularly in the West. Q: How are cycle times trending, and are there any improvements in municipal bottlenecks? A: Anthony Oxley, President and CEO, noted that cycle times have decreased by about six months over the past 36 months, now averaging 12 months. Contractor availability has improved, but municipal processes remain a bottleneck. There are opportunities to further reduce cycle times and costs. For the complete transcript of the earnings call, please refer to the full earnings call transcript.

In April 2026, Forestar Group Inc. reported second-quarter sales of US$374.3 million and net income of US$32.1 million, while maintaining its fiscal 2026 revenue outlook at US$1.6 billion to US$1.7 billion and slightly narrowing expected lot deliveries to 14,000–14,500. The combination of steady year-over-year earnings, higher sales, and an unchanged revenue range despite a trimmed upper-end lot delivery outlook offers a nuanced read on demand and operational discipline in Forestar’s land development business. We’ll now examine how maintaining full-year revenue guidance despite tighter lot delivery expectations may influence Forestar Group’s existing investment narrative. Uncover the next big thing with 24 elite penny stocks that balance risk and reward. To own Forestar Group, you need to believe in sustained demand for residential lots and the company’s ability to monetize its land pipeline efficiently, despite customer and housing-cycle risks. The latest quarter’s slightly higher sales and essentially flat earnings, alongside maintained full-year revenue guidance but a modestly lower lot delivery range, do not materially shift the near-term story: the key catalyst remains execution on its contracted backlog, while customer concentration with D.R. Horton continues to be the main overhang. The most relevant recent announcement is the confirmation of fiscal 2026 revenue guidance at US$1.6 billion to US$1.7 billion, even as lot delivery expectations were tightened to 14,000–14,500. In the context of earlier discussions about moderating margins and dependence on D.R. Horton, keeping the top-line outlook intact suggests Forestar is leaning on pricing, mix, or backlog quality to support revenue, which matters directly for how you think about the durability of its current investment thesis. Yet beneath that steady guidance, investors should still be thinking hard about the concentration risk tied to D.R. Horton and what happens if... Read the full narrative on Forestar Group (it's free!) Forestar Group's narrative projects $1.9 billion revenue and $187.4 million earnings by 2029. Uncover how Forestar Group's forecasts yield a $33.00 fair value, a 20% upside to its current price. Some of the most optimistic analysts were assuming Forestar could reach about US$2.0 billion of revenue and US$210.0 million of earnings, but this quarter’s slightly trimmed lot outlook shows how sensitive those upbeat expectations are to customer concentration and regional housing conditions, and it is worth recognizing that reasonable investors can interpret the same numbers in very different ways. Explore 2 other fair value estimates on Forestar Group - why the stock might be worth less than half the current price! Don't just follow the ticker - dig into the data and build a conviction that's truly your own. A great starting point for your Forestar Group research is our analysis highlighting 3 key rewards that could impact your investment decision. Our free Forestar Group research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Forestar Group's overall financial health at a glance. Opportunities like this don't last. These are today's most promising picks. Check them out now: The future of work is here. Discover the 33 top robotics and automation stocks leading the charge in AI-driven automation and industrial transformation. AI is about to change healthcare. These 33 stocks are working on everything from early diagnostics to drug discovery. The best part - they are all under $10b in market cap - there's still time to get in early. Find 50 companies with promising cash flow potential yet trading below their fair value. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Companies discussed in this article include FOR. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email [email protected]