Forestar Group Inc. has recently released its 10-K report, providing a detailed look into its financial performance and operations. Forestar operates as a residential lot development company in the United States, acquiring land and developing infrastructure for single-family residential communities. It primarily sells its residential single-family finished lots to local, regional, and national homebuilders and became a majority-owned subsidiary of D.R. Horton, Inc. in October 2017.
In the Management’s Discussion and Analysis of Financial Condition and Results of Operations, it's highlighted that the company operates in 64 markets in 23 states as of September 30, 2025, and its revenues increased by 10% from the prior year period. Despite ongoing affordability constraints and cautious consumer sentiment, Forestar's ongoing focus is primarily to develop lots for homes at affordable price points.
The company's residential lots sold in the fiscal year ended September 30, 2025, consisted of 13,892 development projects and 348 lot banking projects, with an average sales price per lot of $108,400. The revenues for the same period were $1,662.4 million, with $1,544.3 million coming from residential lot sales and $118.1 million from tract sales and other sources.
Forestar's cost of sales in fiscal 2025 increased compared to fiscal 2024, primarily due to the increase in revenues. Selling, general and administrative (SG&A) expense in fiscal 2025 was $154.4 million, representing 9.3% of revenues. The company also recorded a loss on extinguishment of debt of $1.2 million in fiscal 2025.
At September 30, 2025, Forestar had $379.2 million of cash and cash equivalents and $588.9 million of available borrowing capacity on its revolving credit facility. The company's ratio of debt to total capital was 31.2%, and its ratio of net debt to total capital was 19.3% at the end of fiscal 2025. Forestar believes it is well-positioned to operate effectively during changing economic conditions due to its low net leverage and strong liquidity position.
The company's land and lot position at September 30, 2025, included 65,100 lots owned and 34,700 lots controlled through land and lot purchase contracts, totaling 99,800 lots owned and controlled. Additionally, Forestar owned lots under contract to sell to D.R. Horton, lots under contract to customers other than D.R. Horton, and lots subject to the right of first offer with D.R. Horton.
Following these announcements, the company's shares moved -1.34%, and are now trading at a price of $22.89. Check out the company's full 10-K submission here.
