One-glance verdict
Overvalued
$108.36 our estimate vs market $274.95
Wall Street consensus: $443.00 (308.8% higher than our fair-value estimate)
154% above our estimate, beyond the bull case
Fundamentals snapshot
Texas Pacific Land Corporation
TPL · NYQ · Energy · Oil & Gas E&P
Current price
$274.95
52-week range
$265.31 - $547.20
Market cap
$18.96B
Balance sheet
Healthy
858.20x Strong cushion
Net cash $351.87M. Interest coverage shows how many times profit covers the interest bill.
What stands out
3 Rewards
2 Risks
3 rewards · 2 risks
- Reward Revenue grew 21.3% last year.
- Reward Returns 37.1% on equity, ahead of 80% of its peers.
- Risk Operating margin compressed from 84.3% to 76.2% over 3 years.
- Risk Insider ownership is only 0.4% (peer median: 5.8%).
What this company does
Texas Pacific Land Corporation
Texas Pacific Land Corporation primarily manages vast amounts of land in the Permian Basin, earning money from oil and gas royalties (a share of production from oil and gas wells) and selling materials or leasing land for industrial uses. They also provide water services to oil and gas companies, which is important for their drilling operations. This means their income is largely tied to the activity levels and success of oil and gas companies operating in that specific region.
What it actually does
At its core, Texas Pacific Land Corporation is a major landowner in West Texas, particularly in the Permian Basin, one of the most productive oil and gas regions in the U.S. TPL doesn't drill for oil or gas itself. Instead, it acts like a landlord, generating revenue by leasing its land and mineral rights to energy companies that do the drilling and production. Think of it like owning a large apartment building; you don't live in the apartments, but you collect rent from the tenants who do. TPL also provides essential services, like water, to these energy companies, further diversifying its income streams.
Land and Resource Management
This is TPL's largest business segment and is all about managing its vast land holdings and the resources on them. The company earns money in several ways here. A primary source of income is through oil and gas royalties, which means TPL gets a percentage of the oil and gas produced from its land by other companies. It also generates revenue from easements, which are like permits for other companies to build things like pipelines or power lines across TPL's property. Additionally, TPL leases land for commercial purposes, sells materials like sand and gravel for construction, and sometimes sells off parcels of its land.
Water Services and Operations
The energy industry, especially oil and gas drilling and hydraulic fracturing (a method to extract oil and gas), requires a significant amount of water. TPL's Water Services and Operations segment meets this demand by providing comprehensive water solutions to energy companies operating in the Permian Basin. This includes sourcing water, treating water that has been used in operations (called 'produced water'), developing water infrastructure, and managing water disposal. TPL also earns royalties from the handling of this produced water, making it a crucial partner for energy producers in the region.
What management is betting on now
Texas Pacific Land Corporation is strategically positioning itself beyond traditional oil and gas. Management is focusing on leveraging its extensive land and resource base for new opportunities, including those related to renewable energy and technology infrastructure. This includes exploring investments in areas like 'Closed-Loop Energy-Data Hubs,' which are essentially facilities that support data centers and advanced computing. By expanding into these forward-looking sectors, TPL aims to diversify its revenue streams and capitalize on emerging industries, moving beyond its historical role as solely an oil and gas-related entity.
Price history
How the share price has moved
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Earnings history
Last 8 quarters — what happened
Click any quarter to read the call summary and what the numbers say.
Revenue
$273.39M
Net income
$167.37M
Diluted EPS
2.42
Operating cash flow
$192.39M
Free cash flow
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Sources
Revenue
$246.06M
Net income
$153.93M
Diluted EPS
2.23
Operating cash flow
$172.86M
Free cash flow
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Sources
Revenue
$236.82M
Net income
$142.90M
Diluted EPS
2.07
Operating cash flow
$162.01M
Free cash flow
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Sources
Revenue
$211.58M
Net income
$123.35M
Diluted EPS
-8.59
Operating cash flow
$113.67M
Free cash flow
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Sources
Revenue
$203.09M
Net income
$121.24M
Diluted EPS
5.27
Operating cash flow
$154.61M
Free cash flow
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Sources
Revenue
$187.54M
Net income
$116.14M
Diluted EPS
5.05
Operating cash flow
$120.90M
Free cash flow
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Sources
Revenue
$195.98M
Net income
$120.65M
Diluted EPS
5.24
Operating cash flow
$156.73M
Free cash flow
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Sources
Revenue
$185.78M
Net income
$118.36M
Diluted EPS
5.14
Operating cash flow
$126.58M
Free cash flow
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Is it cheap or expensive?
Fair value $108.36 vs current price $274.95
Wall Street consensus is the average analyst price target: $443.00 (308.8% higher than our fair-value estimate).
Our most-likely fair value is $108.36 a share — about 60.6% below today's price of $274.95, so the stock currently looks expensive (overvalued).
Is it drowning in debt?
Healthy
Net cash $351.9M - more cash than debt. Interest coverage 858.2x.
Net debt
$-351.87M
Interest coverage
858.20x
Texas Pacific Land Corporation's profit covers its interest bill about 858.2 times over. which is stronger than every peer shown here.
Healthy
Worse cushion
Baseline
Better cushion
TPL
BASELINE
Texas Pacific Land Corporation
Total debt $17.69M Interest coverage 858.20x This is the baseline the peer rows are being compared against.
Total debt $2.39B Interest coverage 6.10x -99% vs TPL Carries about 140.8x less debt cushion than TPL.
Total debt — Interest coverage 29.21x -97% vs TPL Carries about 29.4x less debt cushion than TPL.
Total debt $539.95M Interest coverage 3.50x -100% vs TPL Carries about 245.0x less debt cushion than TPL.
Total debt $535.72M Interest coverage 3.62x -100% vs TPL Carries about 236.9x less debt cushion than TPL.
What you should know
The case for and against TPL
3 Rewards
2 Risks
Rewards
-
Revenue grew 21.3% last year.
-
Returns 37.1% on equity, ahead of 80% of its peers.
-
Free cash flow was positive in 4/10 years.
Risks
-
Operating margin compressed from 84.3% to 76.2% over 3 years.
-
Insider ownership is only 0.4% (peer median: 5.8%).
The numbers
All the key metrics, grouped by purpose
Tap any ? icon to learn what it means.
Valuation
How expensive the stock looks
P/E (TTM)
32.31x
Forward P/E
3.76x
P/B
10.52x
P/S
19.59x
EV/EBITDA
22.79x
PEG ratio
7.33x
Profitability
How much profit each dollar creates
Gross margin
94.1%
Operating margin
76.2%
Net margin
60.7%
ROE
37.1%
ROA
26.1%
Health
Liquidity and balance-sheet strength
Debt / equity
0.01x
Current ratio
5.41x
Quick ratio
5.27x
Total debt
$17.69M
Total cash
$369.56M
Growth
How the business has been compounding
Revenue TTM
$967.85M
Revenue 5Y CAGR
15.3%
EPS TTM
8.51
EPS 5Y CAGR
2.8%
Cash flow
How much cash the business throws off
Operating CF TTM
$640.93M
Free CF TTM
$32.13M
FCF margin
3.3%
Dividend
Shareholder payout
Yield
0.9%
Payout ratio
27.4%
Last ex-div date
2026-09-01