Forestar Group (FOR) Financials

Forestar Group’s latest quarter showed improving profitability and liquidity, although cash flow remains highly dependent on working-capital movements. In Q3 2026, revenue increased to $409.9 million from $391.8 million in the restated year-earlier quarter, while net income attributable to common shareholders rose to $35.9 million from $32.9 million. Diluted EPS improved to $0.70 from $0.65.

Profitability has strengthened sequentially. Revenue rose from $275.3 million in Q1 2026 to $375.9 million in Q2 and $409.9 million in Q3. Net income increased from $15.4 million to $32.2 million and then $36.0 million over the same period. Q3’s pretax margin was approximately 11.9%, up from about 11.1% in Q3 2025, despite operating expenses reaching $361.2 million.

The balance sheet also expanded over the period provided. Total assets reached $3.22 billion at June 30, 2026, compared with $2.38 billion at June 30, 2023. Total equity increased to $1.86 billion from $1.30 billion, and retained earnings more than doubled from $602.4 million to $1.13 billion. Total debt of approximately $859.1 million was below the $940.0 million reported at June 30, 2025 and $941.4 million at June 30, 2023.

• Improving earnings momentum: Q3 2026 revenue grew approximately 4.6% year over year, while common-shareholder net income increased about 9.1%.
• Higher EPS: Diluted EPS rose to $0.70 in Q3 2026 from $0.65 in Q3 2025 and $0.30 in Q1 2026.
• Positive operating cash flow in Q2 and Q3: Operating cash flow was $151.9 million in Q2 2026 and $32.7 million in Q3, reversing the $157.0 million outflow in Q1.
• Strong liquidity: Cash and equivalents increased to $394.9 million at June 30, 2026 from $211.7 million at December 31, 2025.
• Long-term equity growth: Total equity expanded steadily across the provided periods, supported by rising retained earnings and sustained profitability.
• Lower debt than a year earlier: Combined short- and long-term debt declined from approximately $940.0 million in Q3 2025 to $859.1 million in Q3 2026.
• Interest income is becoming more meaningful but remains secondary: Investment securities interest income increased to $2.9 million in Q3 2026 from $1.3 million a year earlier, but it represented less than 1% of total revenue.
• Asset growth is concentrated: Net premises and equipment totaled $2.72 billion, or roughly 84% of total assets, making asset utilization and the timing of project monetization important factors for investors.
• Operating cash flow is volatile: Large working-capital swings produced operating cash outflows of $450.0 million in Q1 2025 and $157.0 million in Q1 2026, despite positive net income in both periods.
• High operating-cost base: Q3 2026 non-interest operating expenses were $361.2 million, approximately 88% of revenue, leaving limited room for margin deterioration if sales or pricing weaken.

Overall, the statements point to a company with stronger earnings, growing equity and adequate cash reserves, but with uneven cash conversion. Investors should monitor whether recent operating cash generation continues and whether revenue growth can outpace the company’s substantial operating-cost base. Several earlier income and cash-flow periods are identified as restated, and the supplied data does not include every quarter, so longer-term comparisons should be interpreted with some caution.