NYSE$FOR

Forestar Group Inc · Q3 2023 earnings

Q3 2023 earnings · · Investor relations

Briefing

Reported an increase in net income and revenue due to strong demand for finished residential lots.

Forestar Group Inc. reported an 18% increase in net income to $46.8 million, or $0.93 per diluted share, and a 20% increase in consolidated revenues to $368.9 million for the third quarter of fiscal 2023. The company sold 3,812 lots during the quarter.

  • Net income increased 18% to $46.8 million or $0.93 per diluted share.
  • Pre-tax income increased 18% to $62.4 million, with a pre-tax profit margin of 16.9%.
  • Consolidated revenues increased 20% to $368.9 million on 3,812 lots sold.
  • Net debt to total capital ratio improved to 19.1%.

Headline financials

Total Revenue

$369M

Previous: $309M+19.6%
EPS (adj)

$0.93

Previous: $0.80+16.3%
Lots Sold

3.8K

Previous: 3.5K+9.8%
Avg Sales Price/Lot

$87.7K

No prior period
Capital Expenditures

-$800K

Previous: -$3.2M+75.0%
Free Cash Flow

$46M

Previous: $36.5M+26.0%
Net Income

$46.8M

Previous: $39.7M+17.9%
Operating Income

$58.6M

Previous: $52.5M+11.6%
Gross Profit

$85M

Previous: $73.9M+15.0%
Cash & Equivalents

$401M

Previous: $146M+174.1%
Total Assets

$2.38B

Previous: $2.27B+4.7%
Stock-Based Comp

$900K

Previous: $800K+12.5%

Revenue & EPS history

Forestar · Revenue · Quarterly

$369M

Q3 2023+19.6%vs Q3 2022
Beat estimate in 8 of 15 quarters(53%)
ActualEstimate

Revenue by segment

Forestar · $23.8M total across 1 segment · Q3 2023

  • Tract Sales & Other
    $23.8M+332.7%

Forward guidance

Forestar is uniquely positioned to take advantage of the shortage of finished lots in the homebuilding industry and will continue to strive to maximize returns by balancing pace of sales and lot pricing.

Tailwinds

  • Commitment to operational excellence and a relentless focus on execution.
  • Strong balance sheet and ample liquidity.
  • Flexibility to invest in land opportunities.
  • Ability to maintain an appropriate level of finished lots in inventory to meet builder demand.
  • Ability to aggregate significant market share over the next few years.

Headwinds

  • Shortage of finished lots in the homebuilding industry.
  • Balancing pace of sales and lot pricing.
  • Maintaining disciplined approach when investing capital.
  • Uncertainty in the homebuilding industry.
  • Potential changes in economic conditions.

Historical earnings impact

How earnings announcements have historically affected this stock's price.

Avg. return before/after earnings

Based on 20 quarterly earnings reports · overlaid with Q3 2023

Historical avgQ3 2023

+0.2%

Avg return

Earnings day

+1.4%

Avg return

5 days after

+3.6%

Avg return

30 days after

49%

32 / 65 earnings

Positive

+17.9%

Q4 2017

Best reaction

-15.3%

Q3 2018

Worst reaction

Earnings price reactions
QuarterReport dateReaction (Day 0)+5 days+30 days
Q2 2026+0.4%+6.3%-1.3%
Q1 2026-4.6%-9.6%+8.2%
Q4 2025+6.6%-0.2%-1.0%
Q3 2025+0.6%+1.3%+1.8%
Q2 2025-0.6%+1.6%+6.2%
Q1 2025-10.1%-12.4%-14.0%
Q4 2024+0.9%-1.9%-5.6%
Q3 2024-14.8%-11.4%-18.6%
Q2 2024-7.5%-7.9%+2.4%
Q1 2024-8.7%-6.2%-6.9%
Q4 2023+14.9%+14.3%+20.3%
Q3 2023+13.1%+21.6%+19.9%
Q2 2023+10.4%+17.0%+31.7%
Q1 2023-9.7%-10.7%-15.6%
Q4 2022+15.9%+17.2%+32.0%
Q3 2022-6.2%-6.9%-11.6%
Q2 2022-3.5%-2.9%-6.1%
Q1 2022+8.8%+11.7%+1.9%
Q4 2021+3.2%+2.2%-2.5%
Q3 2021+12.4%+12.4%+5.3%
Q2 2021-1.1%-0.5%-9.8%
Q1 2021-1.1%-1.6%-3.2%
Q4 2020+5.6%+7.1%+12.5%
Q3 2020+2.7%+5.4%+9.1%
Q2 2020+0.9%+13.0%+24.0%
Q1 2020-0.4%-9.2%-2.3%
Q4 2019+3.2%+4.0%+4.9%
Q3 2019+3.0%+6.8%-5.2%
Q2 2019+0.8%+1.5%-2.6%
Q4 2018-0.4%+1.6%+7.6%
Q3 2018-15.3%-16.4%-20.3%
Q2 2018+1.1%+0.0%+5.5%
Q1 2018-2.2%-4.8%+2.8%
Q4 2017+17.9%+11.0%+6.7%
Q3 2017-4.8%-1.4%+27.0%
Q2 2017-0.9%-0.9%+0.3%
Q1 2017+0.0%+0.0%+14.9%
Q4 2016-1.5%-1.5%+2.6%
Q3 2016+3.5%+9.7%+19.8%
Q2 2016-2.0%-2.6%+2.5%
Q1 2016-5.9%
Q4 2015+10.0%
Q3 2015-5.8%
Q2 2015+3.0%
Q1 2015-5.8%
Q4 2014+8.3%
Q3 2014+0.5%
Q2 2014+0.0%
Q1 2014-5.9%
Q4 2013-0.5%
Q3 2013-6.3%
Q2 2013-4.9%
Q1 2013+5.0%
Q4 2012+3.7%
Q3 2012-10.0%
Q2 2012+4.0%
Q1 2011-1.1%
Q1 2012+2.3%
Q4 2009+5.4%
Q4 2011+5.4%
Q3 2010+3.5%
Q3 2011+3.5%
Q2 2010-9.2%
Q2 2011-9.2%
Q4 2010-9.2%

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