12 Best Residential Real Estate Stocks To Buy According to Analysts

1. Forestar Group Inc. (NYSE:FOR)

Average Upside Potential: 70.92%

Forestar Group Inc. (NYSE:FOR) is one of the largest residential community developers in the United States which primarily acquires entitled real estate and develops it into finished residential lots for sale to homebuilders. Forestar is a majority-owned subsidiary of D.R. Horton.

Forestar’s strategic relationship with D.R. Horton, one of the largest American homebuilders, presents it with significant built-in demand for current and future lot deliveries. The firm is more geographically diversified than most homebuilders with active projects in 59 markets in 24 states and 95,100 lots controlled, as of September 30, 2024. Forestar delivered more than 15,000 residential lots during fiscal 2024 while witnessing a 1,078% increase in lots sold between FY 2018 and 2024.

As a highly differentiated, pure-play, residential lot developer for the affordably priced single-family home market, Forestar Group Inc. (NYSE:FOR) is demonstrating solid operational execution and increased profitability. The firm closed fiscal 2024 with net income increasing 22% and revenues increasing 5%, year-over-year. Over the last five years, the firm invested nearly $6.7 billion in land acquisition and development and delivered more than 70,000 finished lots to local, regional, and national homebuilders.

While we acknowledge the potential of FOR as an investment, our conviction lies in the belief that some deeply undervalued AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for a deeply undervalued AI stock that is more promising than FOR but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

READ NEXT: 20 Best AI Stocks To Buy Now and Complete List of 59 AI Companies Under $2 Billion in Market Cap.

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