Forestar Q1 2026 Earnings: Revenue Beats but Lots Sold Drop Hits Stock

Описание: Forestar Group reported Q1 2026 earnings with a mixed outlook: revenue rose 9% year-over-year to $273 million, beating estimates by $7.5 million, thanks to a strategic shift toward higher-priced lots and a $38 million tract sale. However, earnings per share missed expectations at $0.30 versus $0.32 consensus, driven by a 17% decline in lots sold due to ongoing entry-level housing affordability challenges amid higher mortgage rates. The company is leveraging its strong partnership with D.R. Horton, supplying about 25% of their lot takedowns, aiming to increase this to one-third, providing a demand backstop despite market headwinds.

Management emphasized disciplined execution by focusing on mix and channel strategies to defend economics, maintaining full-year revenue guidance between $1.6 billion and $1.7 billion despite volume softness. The gross profit margin remained steady at 20.1%, reflecting efforts to balance returns amid a challenging market. Market reaction was cautious with shares dropping nearly 7% at open, reflecting investor concern over volume declines and EPS miss despite revenue beat.

Looking forward, key factors for investors include whether lot sales rebound with the spring selling season, maintaining stable gross margins, and progress toward full-year guidance. The company's strategic relationship with D.R. Horton and its ability to manage price mix will be crucial in navigating affordability pressures. Overall, Forestar remains a market perform with a solid demand floor from its partnership but constrained near-term upside due to housing market challenges.

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