Why Forestar Group Stock Popped Today
Key Points
The land specialist crushed analyst estimates in its final quarter of fiscal 2025.
This, despite a year-over-year drop in lot transactions.
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Forestar Group (NYSE: FOR) wasn't exactly a stock market star on Tuesday, but it benefited from a burst of investor optimism. Following the release of the real estate developer's latest quarterly earnings report that morning, investors piled into the stock to push it to a more than 7% gain on the day. That compared rather well to the 0.2% bump of the S&P 500 (SNPINDEX: ^GSPC).
Landing well in the black
Forestar took the wraps off its fiscal fourth quarter of 2025 numbers, divulging that revenue leaped by almost 22% year over year to over $670 million. Headline net income, i.e., according to generally accepted accounting principles (GAAP), advanced at a 7% clip to $87 million, or $1.70 per share.
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Image source: Getty Images.
This meant crushing beats on the average analyst projections. The consensus was less than $557 million for revenue, and only $1.26 per share on the bottom line.
Forestar, which specializes in transacting parcels of land and does brisk business with top home construction company DR Horton, enjoyed financial gains despite a 9% year-over-year drop in its number of lots sold (which fell to 4,891 during the quarter). All told, as of Sept. 30, Forestar was in possession of 99,800 lots.
Revenue guidance beat
For fiscal 2026, Forestar expects to earn revenue of $1.6 billion to $1.7 billion. That sits above the average analyst estimate of just under $1.55 billion. The company is benefiting from continued strong demand for housing, although it's quite dependent on it, as it hasn't strayed from its core competency.
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Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends D.R. Horton. The Motley Fool has a disclosure policy.
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