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Overview of Forestar Group Inc.
Forestar Group Inc. (NYSE: FOR) is a publicly traded residential lot development company headquartered in the United States. Operating across multiple states and markets, Forestar specializes in acquiring entitled land, transforming it into finished residential lots, and selling these lots to homebuilders. The company plays a pivotal role in the housing supply chain by providing ready-to-build lots that enable homebuilders to efficiently meet the growing demand for single-family homes. With a strategic focus on asset turns and operational efficiency, Forestar has established itself as a key player in the real estate development industry.
Core Business Model
The company’s primary business revolves around the development of single-family residential communities. Forestar acquires entitled real estate, which refers to land parcels that have already received the necessary zoning and regulatory approvals for residential development. These parcels are then developed into finished lots, complete with essential infrastructure such as roads, utilities, and drainage systems. By focusing on short-duration, phased development projects, Forestar minimizes its exposure to market volatility and optimizes its capital allocation. This lower-risk business model allows the company to maintain a steady revenue stream while reducing the financial uncertainties commonly associated with long-term real estate projects.
Geographic Diversification and Market Reach
Forestar operates in nine states and twelve distinct markets, demonstrating significant geographic diversification. This broad operational footprint not only mitigates regional market risks but also positions the company to capitalize on varying demand patterns across the United States. The company’s extensive real estate portfolio includes approximately 281,000 acres of land, with additional holdings in oil and gas mineral interests, forested areas, and leased recreational properties. These diverse assets further underscore Forestar’s scale and resource base, which contribute to its competitive positioning.
Strategic Focus and Operational Efficiency
Forestar’s business strategy emphasizes operational efficiency and a disciplined approach to asset management. By concentrating on short-duration projects and phased developments, the company reduces its exposure to prolonged market cycles and regulatory delays. This approach also enables Forestar to quickly adapt to changing market conditions, ensuring a steady supply of finished lots to homebuilders. The company’s focus on asset turns—measuring the speed at which assets are converted into revenue—highlights its commitment to maximizing return on investment. Such operational discipline is a key differentiator in the competitive real estate development industry.
Competitive Landscape
Forestar operates in a competitive market environment, facing challenges from both specialized land developers and vertically integrated homebuilders with in-house land development capabilities. To maintain its edge, the company leverages its expertise in entitled land acquisition and phased development, offering a streamlined and efficient process for delivering finished lots. Forestar’s geographic diversification and focus on operational efficiency further strengthen its position in the industry. However, the company must navigate challenges such as fluctuating real estate demand, regulatory complexities, and competition for prime land assets.
Significance in the Real Estate Industry
As a residential lot development company, Forestar serves a critical function in the real estate value chain. By providing homebuilders with ready-to-build lots, the company enables faster project timelines and reduces the complexities associated with land development. This value proposition is particularly significant in the context of rising housing demand and the ongoing need for affordable single-family homes. Forestar’s strategic focus on efficiency and risk mitigation further enhances its role as a reliable partner for homebuilders, contributing to the broader housing market’s stability and growth.
Forestar Group reported robust financial results for the fourth quarter and fiscal year ended September 30, 2021. Net income surged 82% in Q4 to $44 million ($0.89/share) and by 81% for the fiscal year to $110.2 million ($2.25/share). Revenues rose 20% in Q4 to $418.7 million, and 42% annually to $1.3 billion, driven by a 23% and 53% increase in residential lots sold, respectively. The company controlled 97,000 lots, with 33% under contract to D.R. Horton, representing $1.6 billion in future revenue. The outlook for 2022 anticipates 19,000 to 19,500 lot deliveries.
Forestar Group Inc. (NYSE: FOR) will release its financial results for the fourth quarter and fiscal year ended September 30, 2021, on November 4, 2021, after market close. The company will also host a conference call at 5:00 p.m. ET on the same day. Forestar, a residential lot development company, operates in 55 markets across 22 states and delivered 14,990 residential lots in the year ending June 30, 2021. It is a majority-owned subsidiary of D.R. Horton, Inc. (NYSE: DHI), the largest homebuilder in the U.S.
Forestar Group reported a robust fiscal Q3 2021, with revenues soaring 76% to $312.9 million and net income increasing 56% to $15.8 million, or $0.32 per diluted share. Pre-tax income surged 105% to $21.1 million, despite an $18.1 million loss on debt extinguishment. The company controlled 96,600 lots, a 91% increase, with significant contracts pending with D.R. Horton, amounting to at least $1.6 billion in future revenue. Looking ahead, Forestar expects to deliver 15,500 to 16,000 lots in fiscal 2021, reinforcing its strong market position.
Forestar Group Inc. (NYSE: FOR) will announce its third-quarter financial results for the period ending June 30, 2021, on July 20, 2021, after market close. A conference call is scheduled for 5:00 p.m. ET on the same day, with the dial-in number being 877-407-9205. A replay of the call will be available post-event and can be accessed through the Company's website. Forestar operates in 54 markets across 22 states, delivering 13,155 residential lots for the twelve-month period ending March 31, 2021. The company is a majority-owned subsidiary of D.R. Horton, the largest U.S. homebuilder.
Forestar Group reported a strong second quarter for fiscal 2021, with net income soaring 196% to $28.4 million or $0.59 per diluted share.
Revenue jumped 80% to $287.1 million, driven by an 84% increase in residential lots sold, totaling 3,588 lots compared to 1,951 lots year-over-year. For the first half of fiscal 2021, net income rose 91% to $50.4 million, with revenues up 46% to $594.2 million.
The company's lot position increased 62% to 84,500 lots, strengthening its market position and growth outlook.
Forestar Group Inc. (NYSE: FOR) announced a pricing of $400 million in 3.850% senior unsecured notes due 2026. The offering is intended for qualified institutional buyers and will close on April 21, 2021. Proceeds from the notes will be used to redeem existing 8.000% Senior Notes due 2024, with any excess funding general corporate purposes, including land acquisition and development. The notes rank equally with existing senior unsecured debt, maturing on May 15, 2026.
Forestar Group Inc. (NYSE: FOR) announced its financial results for Q2 ending March 31, 2021, will be released on April 20, 2021, post-market close. A conference call will follow at 5:00 p.m. ET, accessible via dial-in and webcast. The company, a leader in residential lot development, operates in 51 markets across 21 states, delivering 11,518 lots in 2020. Forestar is a subsidiary of D.R. Horton, Inc., the largest U.S. homebuilder by volume.
Forestar Group reported a strong first quarter of fiscal 2021, with net income rising 30% to $22.0 million or $0.46 per diluted share, compared to $16.9 million in the same year-ago period. Revenues increased 24% to $307.1 million, driven by a 47% increase in residential lots sold, totaling 3,567 lots. The company’s lot position grew 74% year-over-year to 77,500 lots. Forestar maintains strong liquidity with $576.9 million available and low debt levels, poised for continued growth amid favorable housing market conditions.
Forestar Group Inc. (NYSE: FOR) will release its financial results for the first quarter ending December 31, 2020, on January 21, 2021, after market close. A conference call is scheduled for the same day at 5:00 p.m. ET, with a dial-in number of 877-407-9205. Webcast details will be available on the company's investor relations site. A replay of the call will be accessible after 7:00 p.m. ET on the same day and will remain available until January 28, 2021. Forestar operates in 49 markets across 21 states and is a majority-owned subsidiary of D.R. Horton, the largest U.S. homebuilder.
Forestar Group reported a significant boost in its fourth-quarter and annual financial results for fiscal 2020. Net income surged 91% to $24.2 million, equating to $0.50 per diluted share, with revenues hitting $347.6 million, a 47% increase. Residential lots sold doubled to 3,977. For the fiscal year, net income rose 84% to $60.8 million on revenues of $931.8 million, reflecting a 118% year-over-year growth. The company ended the fiscal year with $394.3 million in cash and a robust liquidity position of $738.3 million, while also maintaining a low net debt to total capital ratio of 22.1%.
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