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Why Forestar Group (FOR) Is Up 16.6% After Beating Q4 Views And Raising 2026 Guidance – And What's Next

Simply Wall St·02/05/2026 14:38:32
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  • Forestar Group, a majority-owned subsidiary of D.R. Horton, recently reported a past-quarter revenue increase of 9% year on year, modestly ahead of analyst expectations, while preserving strong liquidity amid affordability pressures and cautious homebuyer sentiment.
  • The company also issued guidance for fiscal 2026 of 14,000 to 15,000 lot deliveries and projected revenue of US$1.60 billion to US$1.70 billion, highlighting management’s confidence in its development pipeline despite ongoing headwinds.
  • We will now examine how Forestar’s stronger-than-expected quarterly performance and upbeat lot-delivery outlook may influence its broader investment narrative.

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What Is Forestar Group's Investment Narrative?

To own Forestar, you have to believe in the long-term demand for finished lots, the value of its relationship with D.R. Horton, and management’s ability to balance growth with disciplined capital allocation. The recent 9% revenue lift and ahead-of-consensus print reinforce that the development pipeline is converting, and the 2026 lot delivery guidance underpins near-term visibility, which could keep lot absorption and pricing as key short term catalysts. At the same time, softer margins and a low, sub-10% return on equity keep execution risk firmly in focus, particularly if affordability pressures persist or land costs firm up. The new 2033 notes and tender offer also tilt attention toward funding costs and leverage as an additional moving piece in the story.

However, one emerging risk around funding costs and profitability may warrant closer attention from investors. Forestar Group's shares are on the way up, but could they be overextended? Uncover how much higher they are than fair value.

Exploring Other Perspectives

FOR 1-Year Stock Price Chart
FOR 1-Year Stock Price Chart

Simply Wall St Community members place Forestar’s fair value anywhere from about US$5.71 to US$33 across two independent views, showing how far apart individual models can land. Set against recent outperformance in the share price and modest growth expectations, that spread highlights why many market participants are weighing liquidity strength and funding costs just as carefully as the upbeat lot delivery outlook when thinking about where the business might head next.

Explore 2 other fair value estimates on Forestar Group - why the stock might be worth as much as 12% more than the current price!

Build Your Own Forestar Group Narrative

Disagree with this assessment? Create your own narrative in under 3 minutes - extraordinary investment returns rarely come from following the herd.

  • 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.

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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.