MeritValue

Forestar Group Inc.

FORdata completeness 100%16 fiscal years on file
The thesis, from the filings

Forestar Group Inc. earns about 10% on invested capital, but has diluted owners by 4% over 5 years — worth asking whether the growth reaches owners. The applicable estimate puts fair value near $34.08 a share.Whether it’s worth owning at today’s price is the last question — and yours to answer, below.

i. The business — what you’d actually own
FigureFY 2021FY 2022FY 2023FY 2024FY 2025
Revenue$1.29B1$1.46B2$1.28B3$1.46B3$1.54B3
Net income$110.2M4$178.8M5$166.9M6$203.4M6$167.9M6
Operating cash flow−$303.1M7$108.7M8$364.1M9−$158.4M9−$197.7M9
Capital expenditure$1.6M10$3.5M11$1.3M12$2.2M12$2.2M12
Free cash flow (derived)−$304.7M7$105.2M8$362.8M9−$160.6M9−$199.9M9
Total debt$704.5M13$706M14$695M15$706.4M16$802.7M16
Cash & equivalents$153.6M17$264.8M18$616M19$481.2M20$379.2M20
Diluted shares49.0M49.8M50.1M50.8M51.1M

Superscripts are receipts. Each links to the SEC filing the number came from (full list at the bottom).

ii. Your slice — ownership made literal
If you owned
shares
Net assets behind them
$346.24
your share of equity
Profit it earned you last year
$32.88
Free cash flow it threw off
−$39.15
Debt you’d be carrying
$157.21

10 shares is a claim on $346.24 of net worth that earned you $32.88 and generated −$39.15 of cash last year, against $157.21 of debt.

iii. Is this a good business?
Moat signal · return on invested capital
10% avg · 5y
FY21 7%FY22 11%FY23 12%FY24 11%FY25 8%

It earned an average 10% on invested capital over 5 years. Compare that to what it costs to fund the business.

seeing a moat in the numbers →
Management signal · capital allocation
+4% shares · 5y

Share count is up 4% over 5 years — owners have been diluted. Worth asking what they got for it. Total debt has risen 14% over the same window.

reading capital allocation →

Signals, not verdicts — read from the filings above. Numbers don’t prove a moat; they show its footprint. You decide.

iv. What it’s worth — engine v0.1.0
DCF · Growth Exit 10Y
not applicable
3y-median FCF non-positive — growth-exit DCF not applicable (see EPV)
DCF · Growth Exit 5Y
not applicable
3y-median FCF non-positive — growth-exit DCF not applicable (see EPV)
Earnings Power Value
$34.08
assumptions (8)
  • riskFreeRate4.7%
  • equityRiskPremium5.0%
  • beta100.0%
  • equityWeight85.0%
  • costOfDebtSpread1.5%
  • taxRate21.0%
  • normalizedEarnings$167.9M
  • growthAssumed0.0%
Graham Number
$50.63
assumptions (1)
  • grahamMultiplier2250.0%

Different models answer different questions — which to trust when →

Sources — the receipts
  1. 10-K · period ending 2021-09-30 · accession 0001406587-23-000118 (RevenueFromContractWithCustomerIncludingAssessedTax)
  2. 10-K · period ending 2022-09-30 · accession 0001406587-24-000118 (RevenueFromContractWithCustomerIncludingAssessedTax)
  3. 10-K · period ending 2023-09-30 · accession 0001628280-25-053125 (RevenueFromContractWithCustomerIncludingAssessedTax)
  4. 10-K · period ending 2021-09-30 · accession 0001406587-23-000118 (NetIncomeLoss)
  5. 10-K · period ending 2022-09-30 · accession 0001406587-24-000118 (NetIncomeLoss)
  6. 10-K · period ending 2023-09-30 · accession 0001628280-25-053125 (NetIncomeLoss)
  7. 10-K · period ending 2021-09-30 · accession 0001406587-23-000118 (NetCashProvidedByUsedInOperatingActivities)
  8. 10-K · period ending 2022-09-30 · accession 0001406587-24-000118 (NetCashProvidedByUsedInOperatingActivities)
  9. 10-K · period ending 2023-09-30 · accession 0001628280-25-053125 (NetCashProvidedByUsedInOperatingActivities)
  10. 10-K · period ending 2021-09-30 · accession 0001406587-23-000118 (PaymentsToAcquirePropertyPlantAndEquipment)
  11. 10-K · period ending 2022-09-30 · accession 0001406587-24-000118 (PaymentsToAcquirePropertyPlantAndEquipment)
  12. 10-K · period ending 2023-09-30 · accession 0001628280-25-053125 (PaymentsToAcquirePropertyPlantAndEquipment)
  13. 10-K · period ending 2021-09-30 · accession 0001406587-22-000128 (LongTermDebt)
  14. 10-K · period ending 2022-09-30 · accession 0001406587-23-000118 (LongTermDebt)
  15. 10-K · period ending 2023-09-30 · accession 0001406587-24-000118 (LongTermDebt)
  16. 10-K · period ending 2024-09-30 · accession 0001628280-25-053125 (LongTermDebt)
  17. 10-K · period ending 2021-09-30 · accession 0001406587-22-000128 (CashAndCashEquivalentsAtCarryingValue)
  18. 10-K · period ending 2022-09-30 · accession 0001406587-23-000118 (CashAndCashEquivalentsAtCarryingValue)
  19. 10-K · period ending 2023-09-30 · accession 0001406587-24-000118 (CashAndCashEquivalentsAtCarryingValue)
  20. 10-K · period ending 2024-09-30 · accession 0001628280-25-053125 (CashAndCashEquivalentsAtCarryingValue)