Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link
NEW YORK (
) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures, impressive record of earnings per share growth, compelling growth in net income and good cash flow from operations. We feel these strengths outweigh the fact that the company shows low profit margins.
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Highlights from the ratings report include:
- FOR's very impressive revenue growth greatly exceeded the industry average of 36.1%. Since the same quarter one year prior, revenues leaped by 84.9%. Growth in the company's revenue appears to have helped boost the earnings per share.
- The current debt-to-equity ratio, 0.58, is low and is below the industry average, implying that there has been successful management of debt levels.
- FORESTAR GROUP INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year. We feel that this trend should continue. During the past fiscal year, FORESTAR GROUP INC increased its bottom line by earning $0.36 versus $0.19 in the prior year. This year, the market expects an improvement in earnings ($0.55 versus $0.36).
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Real Estate Management & Development industry. The net income increased by 1782.8% when compared to the same quarter one year prior, rising from -$0.70 million to $11.83 million.
- Net operating cash flow has significantly increased by 216.14% to $10.21 million when compared to the same quarter last year. In addition, FORESTAR GROUP INC has also vastly surpassed the industry average cash flow growth rate of 11.24%.
Forestar Group Inc. operates as a real estate and natural resources company. The company operates in three segments: Real Estate, Mineral Resources, and Fiber Resources. The company has a P/E ratio of 27.8, above the S&P 500 P/E ratio of 17.7. Forestar Group has a market cap of $704 million and is part of the financial sector and real estate industry. Shares are down 2.7% year to date as of the close of trading on Wednesday.
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