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    How Forestar’s Rising Spotlight As a Housing Land Pure Play At Forestar Group (FOR) Has Changed Its Investment Story

    Simply Wall St·02/14/2026 00:54:36
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    • In recent days, Forestar Group, the D.R. Horton–controlled residential land developer, has drawn increased investor attention as a pure-play way to access U.S. housing-related land assets, even as its lot sales have fallen an average 26.8% over the past two years and cash burn has raised sustainability questions.
    • This renewed focus highlights a tension between Forestar’s appeal as a “boring but powerful” housing-cycle exposure and investor concerns over weaker demand, stagnant returns on capital, and reliance on favorable interest-rate and affordability conditions.
    • We’ll now examine how this renewed attention on Forestar as a housing-cycle land play interacts with its existing investment narrative and risks.

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    Forestar Group Investment Narrative Recap

    To own Forestar, you have to believe that a D.R. Horton controlled, pure play land developer can turn cyclical U.S. housing exposure into acceptable long term returns despite recent lot sales declines, cash burn, and lower margins. The latest wave of attention around the stock does not materially change the near term catalyst, which remains how quickly lot deliveries and cash generation stabilize, or the biggest risk, which is weaker housing demand meeting already pressured profitability.

    The most relevant recent development in this context is Forestar’s Q1 FY2026 update, which showed sales of US$273.0 million and net income of US$15.4 million, slightly below last year’s earnings. That mix of revenue growth but softer profitability sits uneasily beside concerns about cash burn, stagnant returns on capital, and a 26.8% average drop in lots sold over two years, keeping the spotlight firmly on whether margins and cash flow can hold up if housing conditions stay tough.

    Yet investors should also weigh how concentrated exposure to D.R. Horton could amplify any housing slowdown and...

    Read the full narrative on Forestar Group (it's free!)

    Forestar Group's narrative projects $1.9 billion revenue and $155.2 million earnings by 2028. This requires 7.8% yearly revenue growth and a $7.4 million earnings decrease from $162.6 million today.

    Uncover how Forestar Group's forecasts yield a $33.00 fair value, a 9% upside to its current price.

    Exploring Other Perspectives

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

    The most cautious analysts were already projecting roughly US$2.0 billion of revenue and US$148.6 million of earnings by 2028, and, unlike the consensus view that highlights backlog strength, they focus on how Forestar’s extreme reliance on D.R. Horton could turn renewed housing sensitivity into a real earnings drag, reminding you that reasonable people can read the same news and still reach very different conclusions.

    Explore 2 other fair value estimates on Forestar Group - why the stock might be worth as much as 9% more than the current price!

    Build Your Own Forestar Group Narrative

    Disagree with existing narratives? Create your own 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.