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Texas Pacific Land (TPL)
NYSE:TPL
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Texas Pacific Land
(NYSE:TPL)
Rating:76Outperform
Price Target:
$1,515.00
â–²( 11.75% Upside)
Texas Pacific Land (TPL) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$31.51B
Dividend Yield0.4%
Average Volume (3M)109.48K
Price to Earnings (P/E)68.5
Beta (1Y)1.09
Revenue Growth10.36%
EPS Growth6.37%
CountryUS
Employees111
SectorEnergy
Sector Strength40
IndustryOil & Gas Exploration & Production
Share Statistics
EPS (TTM)5.24
Shares Outstanding22,987,326
10 Day Avg. Volume116,725
30 Day Avg. Volume109,478
Financial Highlights & Ratios
PEG Ratio55.87
Price to Book (P/B)26.40
Price to Sales (P/S)0.00
P/FCF Ratio457.43
Enterprise Value/Market Cap0.94
Enterprise Value/Revenue10.85
Enterprise Value/Gross Profit46.13
Enterprise Value/Ebitda13.49
Forecast
1Y Price Target
$1,090.00Price Target Upside-19.60% Downside
Rating ConsensusHold
Number of Analyst Covering0
Texas Pacific Land Business Overview & Revenue Model
Company DescriptionTexas Pacific Land Corporation engages in the land and resource management, and water services and operations businesses. The company's Land and Resource Management segment manages approximately 880,000 acres of land. This segment also holds own a 1/128th nonparticipating perpetual oil and gas royalty interest (NPRI) under approximately 85,000 acres of land; a 1/16th NPRI under approximately 371,000 acres of land; and approximately 4,000 additional net royalty acres located in the western part of Texas. In addition, this segment engages in easements and commercial leases activities, such as oil, gas and related hydrocarbons, power line and utility easements, and subsurface wellbore easements. Further, this segment leases its land for processing, storage, and compression facilities and roads; and is involved in sale of materials, such as caliche. Its Water Services and Operations segment provides full-service water offerings, including water sourcing, produced-water gathering/treatment, infrastructure development, disposal solutions, water tracking, analytics, and well testing services to operators in the Permian Basin. This segment also holds royalties for water sourced from its land. Texas Pacific Land Corporation was founded in 1888 and is headquartered in Dallas, Texas.
How the Company Makes MoneyTexas Pacific Land makes money primarily through three key revenue streams: royalties from oil and gas production, land sales and leases, and water services. The company earns royalties by granting exploration and production companies the rights to extract oil and gas from its lands in exchange for a percentage of the production revenue. In addition to royalties, TPL generates income by selling or leasing its land holdings for various purposes, including energy development and agriculture. Furthermore, TPL provides water sourcing, treatment, and recycling services to oil and gas operators in the Permian Basin, capitalizing on the industry's need for water management solutions. Partnerships with exploration and production companies and the strategic location of its land assets contribute significantly to TPL's earnings.
Texas Pacific Land Financial Statement Overview
Summary
Texas Pacific Land demonstrates strong financial health with excellent profitability, robust growth, and a solid balance sheet. Minimal debt, high equity, and strong cash flows position it well in the industry. Potential risks include revenue volatility due to industry fluctuations, but current metrics show resilience.Income Statement
Texas Pacific Land has shown strong revenue growth from $631.6 million in 2023 to $705.8 million in 2024, a growth rate of 11.8%. The gross profit margin is excellent at 100%, indicating effective cost management. The net profit margin is robust at 64.3%, showing strong profitability. EBIT and EBITDA margins are also high at 76.4% and 85.6% respectively, showcasing strong operational efficiency.87
Very Positive
Balance Sheet
The company's balance sheet is notably strong with a debt-to-equity ratio of practically zero due to minimal debt. Return on equity is impressive at 40.1%, reflecting efficient use of shareholder funds. The equity ratio is high at 90.7%, suggesting a stable financial foundation with a low level of liabilities.92
Very Positive
Cash Flow
The free cash flow growth rate is substantial at 21.8%, indicating improved cash generation. The operating cash flow to net income ratio is 1.08, showing healthy cash flow relative to earnings. The free cash flow to net income ratio is 1.02, demonstrating efficient conversion of profits into cash.85
Very Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 705.82M | 631.60M | 667.42M | 450.96M | 302.55M | Gross Profit |
| 634.54M | 583.27M | 634.53M | 421.47M | 269.95M | EBIT |
| 539.14M | 486.05M | 562.31M | 362.39M | 217.25M | EBITDA |
| 564.30M | 500.81M | 577.68M | 378.65M | 231.66M | Net Income Common Stockholders |
| 453.96M | 405.64M | 446.36M | 269.98M | 176.05M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 369.83M | 725.17M | 510.83M | 428.24M | 281.05M | Total Assets |
| 1.25B | 1.16B | 877.43M | 764.06M | 571.63M | Total Debt |
| 453.00K | 1.17M | 1.96M | 1.45M | 2.82M | Net Debt |
| -369.38M | -724.00M | -508.88M | -426.80M | -278.23M | Total Liabilities |
| 115.56M | 113.20M | 104.54M | 112.35M | 86.45M | Stockholders Equity |
| 1.13B | 1.04B | 772.89M | 651.71M | 485.18M |
| Cash Flow | Free Cash Flow | |||
| 65.40M | 378.29M | 426.27M | 249.62M | 185.00M | Operating Cash Flow |
| 490.67M | 418.29M | 447.15M | 265.16M | 207.04M | Investing Cash Flow |
| -471.75M | -60.31M | -21.40M | -15.00M | -26.00M | Financing Cash Flow |
| -378.09M | -144.61M | -336.81M | -104.95M | -201.66M |
Texas Pacific Land Technical Analysis
Positive
1355.66
Price Trends
1312.92
Positive
1316.88
Positive
1195.44
Positive
Market Momentum
24.98
Negative
51.67
Neutral
69.05
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TPL, the sentiment is Positive. The current price of 1355.66 is above the 20-day moving average (MA) of 1350.02, above the 50-day MA of 1312.92, and above the 200-day MA of 1195.44, indicating a bullish trend. The MACD of 24.98 indicates Negative momentum. The RSI at 51.67 is Neutral, neither overbought nor oversold. The STOCH value of 69.05 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TPL.
Texas Pacific Land Peers Comparison
Overall Rating
UnderperformOutperform
Sector (57)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
76 Outperform | $31.51B | 68.54 | 39.52% | 0.40% | 10.36% | 6.37% | |
75 Outperform | $33.61B | 96.81 | 2.06% | 1.12% | 39.56% | -59.84% | |
75 Outperform | $41.64B | 17.12 | 9.43% | 2.15% | 1.35% | -33.30% | |
73 Outperform | $40.42B | 8.46 | 14.26% | 4.49% | 47.89% | -7.87% | |
73 Outperform | $20.99B | 7.44 | 20.88% | 3.88% | 12.06% | -16.37% | |
72 Outperform | $18.70B | 14.30 | 9.40% | 3.42% | 10.33% | -0.13% | |
57 Neutral | $7.14B | 3.33 | -3.45% | 5.75% | 0.66% | -50.76% |
* Energy Sector Average
Performance Comparison
TPL
Texas Pacific Land
1,355.66
759.14
127.26%
CTRA
Coterra Energy
24.49
-2.08
-7.83%
DVN
Devon Energy
31.50
-15.75
-33.33%
EQT
EQT
55.71
15.12
37.25%
OXY
Occidental Petroleum
41.13
-20.44
-33.20%
FANG
Diamondback
136.31
-50.18
-26.91%
Texas Pacific Land Earnings Call Summary
Earnings Call Date:May 07, 2025
(Q1-2025)
| % Change Since: 0.91%|
Next Earnings Date:Jul 30, 2025
Earnings Call Sentiment Positive
The earnings call presented a largely positive outlook with record production levels and strong financial metrics. However, there are concerns about commodity price sensitivity and potential declines in Permian activity that could impact future performance. The company's strong financial position and strategic initiatives provide resilience against potential downturns.Q1-2025 Updates
Positive Updates
Record Oil and Gas Royalty Production
TPL set a quarterly record with oil and gas royalty production averaging approximately 31,100 barrels of oil equivalent per day, representing 7% growth sequential quarter-over-quarter and 25% growth year-over-year.
Strong Water Segment Revenue
Water segment revenues totaled $69 million, showing a 3% sequential quarter-over-quarter growth and 11% growth year-over-year, driven by robust volume gains in water sales and produced water royalties.
High Adjusted EBITDA Margin
Consolidated adjusted EBITDA was $169 million with an adjusted EBITDA margin of 86.4%.
Robust Near-Term Well Inventory
TPL's near-term well inventory reached an all-time high with 24.3 net wells, which is 7% higher sequential quarter-over-quarter and 38% higher year-over-year.
Strong Financial Position
TPL maintains a net cash position with zero debt and $460 million in cash and cash equivalents.
Easement Renewal Payments
TPL anticipates benefiting from easement renewal payments with CPI escalators, expecting renewal payments of approximately $10 million in 2026, ramping up to $35 million per year in subsequent years.
Negative Updates
Commodity Price Sensitivity
TPL's oil and gas royalties are directly exposed to commodity prices, and a sustained oil price below $60 could result in a downturn in activity.
Potential Decline in Permian Activity
Feedback from operators indicates cautious evaluation of activity plans, and a potential decline in Permian activity could impact TPL's revenue streams.
Delayed Desalination Unit Launch
The Phase IIb desalination unit is now expected to come online by the end of the year, indicating a delay in its launch.
Company Guidance
During the Texas Pacific Land Corporation First Quarter 2025 Earnings Call, the company reported record performance in several key metrics. Oil and gas royalty production averaged approximately 31,100 barrels of oil equivalent per day, marking a 7% sequential increase and a 25% growth year-over-year. Water segment revenues reached $69 million, showing a 3% quarter-over-quarter growth and an 11% increase year-over-year. Consolidated revenues for the quarter were $196 million, with an adjusted EBITDA of $169 million and an impressive EBITDA margin of 86.4%. Free cash flow stood at $127 million, reflecting an 11% increase compared to the previous year. Additionally, the company highlighted a robust near-term well inventory, with 24.3 net wells, including 5.9 net permitted wells, 12.9 net drilled but uncompleted wells, and 5.4 net completed but not producing wells. Despite potential challenges from fluctuating oil prices, TPL emphasized its strong financial position, with a net cash position, zero debt, and $460 million in cash and cash equivalents as of March 31, 2025.Texas Pacific Land Corporate Events
Financial Disclosures
Texas Pacific Land Reports Record Q1 2025 Results
Positive
May 7, 2025
On May 7, 2025, Texas Pacific Land Corporation announced its first-quarter 2025 financial results, highlighting record oil and gas royalty production and water services revenue. The company reported a net income of $120.7 million and total revenues of $196.0 million, driven by increased oil and gas royalty revenue and water sales. Despite economic volatility, TPL’s strong financial position and business model allow it to remain resilient and opportunistic.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.