Kimbell Royalty Partners Lp (KRP) AI Stock Analysis

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Kimbell Royalty Partners Lp

(NYSE:KRP)

Rating:68Neutral

Price Target:

$14.50

▲(2.76%Upside)

Kimbell Royalty Partners' strong revenue growth and strategic acquisitions lead to a positive outlook. However, profitability challenges and valuation concerns weigh on the overall score. The high dividend yield and stable balance sheet provide some support, but addressing profitability is essential for future performance.

Positive Factors

Cash distribution

The new deal is expected to increase cash available for distribution by 2%.

Leverage management

KRP is expected to maintain pro-forma leverage below 1x despite increasing net debt.

Royalty deal

The recent Midland royalty deal has the potential to positively impact future production figures.

Negative Factors

Earnings multiple

The company's earnings multiple is as high as larger mineral peers, which could be concerning for some investors.

Preferred equity impact

There is an expectation of added downside risk due to the impact from preferred equity and a backwardated oil curve, which could lower distribution per share in the coming years.

Production guidance

The company has provided a lower production guidance compared to consensus estimates, which contributes to a reduced valuation.

Kimbell Royalty Partners Lp (KRP) vs. SPDR S&P 500 ETF (SPY)

Market Cap

$1.68B

Dividend Yield13.53%

Average Volume (3M)575.78K

Price to Earnings (P/E)45.1

Beta (1Y)0.61

Revenue Growth3.20%

EPS Growth-91.39%

CountryUS

Employees23

SectorEnergy

Sector Strength54

IndustryOil & Gas Exploration & Production

Share Statistics

EPS (TTM)0.26

Shares Outstanding93,396,484

10 Day Avg. Volume534,550

30 Day Avg. Volume575,776

Financial Highlights & Ratios

PEG Ratio0.07

Price to Book (P/B)<0.01

Price to Sales (P/S)0.00

P/FCF Ratio35.90

Enterprise Value/Market Cap0.27

Enterprise Value/Revenue0.35

Enterprise Value/Gross Profit2.17

Enterprise Value/Ebitda0.59

Forecast

1Y Price Target

$15.75

Price Target Upside11.62% Upside

Rating ConsensusHold

Number of Analyst Covering4

Kimbell Royalty Partners Lp Business Overview & Revenue Model

Company DescriptionKimbell Royalty Partners (KRP) is a leading oil and gas mineral and royalty company based in the United States. Operating within the energy sector, KRP focuses on managing a diverse portfolio of royalty and mineral interests across multiple oil and gas basins. The company's core services include the acquisition and management of these interests, which provide them with a consistent stream of revenue from the production of oil, natural gas, and natural gas liquids.

How the Company Makes MoneyKimbell Royalty Partners generates revenue through its ownership of oil and gas mineral and royalty interests. The company earns money by collecting royalties from the production of oil, natural gas, and natural gas liquids from its properties. These royalties are a percentage of the revenue generated from the extraction and sale of these resources by operating companies. KRP's revenue model is largely passive, as it does not engage in the actual extraction or operation of these resources, but rather benefits from the activity of other exploration and production companies. The company's revenue streams are influenced by factors such as commodity prices, production volumes, and the acquisition of additional royalty interests. Strategic partnerships and acquisitions play a significant role in expanding KRP's portfolio and enhancing its revenue potential.

Kimbell Royalty Partners Lp Earnings Call Summary

Earnings Call Date:May 08, 2025

(Q1-2025)

% Change Since: 23.02%|

Next Earnings Date:Jul 31, 2025

Earnings Call Sentiment Positive

The earnings call showcased a strong financial performance with record achievements and strategic moves to bolster the company's position, such as an accretive acquisition and increased borrowing capacity. However, challenges in the natural gas M&A market and the potential impact of commodity price volatility were noted. Overall, the call reflected a positive outlook despite some market uncertainties.

Q1-2025 Updates

Positive Updates

Record First Quarter Achievements

Kimbell Royalty Partners reported a record first quarter with milestones in oil, natural gas, and NGL revenues, consolidated adjusted EBITDA, and cash available for distribution.

Accretive Acquisition in Permian Basin

Completed a highly attractive and accretive acquisition in the core of the Permian Basin, contributing to increased production and financial stability.

Increase in Borrowing Base

Increased the company's borrowing base and elected commitments on the credit facility from $550 million to $625 million.

Distribution Increase

Declared a first quarter distribution of $0.47 per common unit, an increase of 17.5% from the fourth quarter of 2024.

Strong Drilling Activity

Maintained 90 rigs actively drilling on acreage, representing a 16% market share in the Lower 48.

Permitting Success

Permitted 17 additional wells on a long-held property in Martin County, Texas, showcasing the strength of the asset portfolio.

Conservative Balance Sheet Management

Maintained a net debt to trailing twelve-month consolidated adjusted EBITDA of approximately 0.9 times, with significant undrawn capacity available.

Affirmation of Financial Guidance

Reaffirmed financial and guidance ranges for 2025, expressing confidence in continued development and growth.

Negative Updates

Challenges in Natural Gas M&A

Difficulty in transacting on natural gas deals due to high competition, particularly in the Haynesville region.

Potential Volatility in Commodity Prices

Acknowledged current volatility and uncertainty in the broader economy and its impact on commodity prices.

Hedging Strategy Concerns

Maintained a 20% hedging level, which might be seen as conservative given the significant contango in the natural gas strip.

Company Guidance

During the Kimbell Royalty Partners First Quarter Earnings Conference Call for fiscal year 2025, management provided several key metrics and guidance updates. The company reported record revenues from oil, natural gas, and NGLs, as well as record consolidated adjusted EBITDA and cash available for distribution. A significant milestone was the completion of an accretive acquisition in the Permian Basin on January 17, 2025. The company also increased its borrowing base from $550 million to $625 million and redeemed 50% of its Series A cumulative convertible preferred units, simplifying its capital structure and reducing its cost of capital. Kimbell maintained robust operational activity with 90 rigs actively drilling, representing a 16% market share in the Lower 48, and projected resilience in production with a low five-year annual average PDP decline rate of 14%. The company declared a first-quarter distribution of 47¢ per common unit, a 17.5% increase from the previous quarter, with approximately 70% expected to be considered a return of capital. Looking forward, Kimbell reaffirmed its 2025 guidance and expressed confidence in its role as a consolidator in the US oil and natural gas royalty sector, aiming to enhance long-term unitholder value.

Kimbell Royalty Partners Lp Financial Statement Overview

Summary

Kimbell Royalty Partners shows strong revenue growth and efficient cash generation. However, profitability challenges are evident with a negative net income and net profit margin. The balance sheet is stable with moderate leverage, but the negative return on equity due to losses is a concern. Addressing profitability issues is crucial for future financial performance.

Income Statement

Neutral

Kimbell Royalty Partners shows a mixed performance in its income statement. The gross profit margin is strong at 93.39% for 2024, reflecting efficient cost management. However, the net profit margin for 2024 is negative (-2.86%), indicating profitability issues, primarily due to high expenses. Revenue growth is robust, with a significant increase from 2023 to 2024, showcasing potential for future expansion. Nonetheless, the negative net income is a concern that needs addressing.

Balance Sheet

Positive

The company exhibits a reasonable debt-to-equity ratio of 0.52, which suggests moderate leverage. The equity ratio stands at 41.44%, indicating a stable asset base supported by equity. However, the return on equity is negative due to the net loss, which impacts the overall assessment of financial health. The balance sheet shows potential for stability, but the negative profitability metrics weigh down the score.

Cash Flow

Positive

Kimbell Royalty Partners has a strong operating cash flow to net income ratio of -28.39, indicating robust cash generation relative to net income. The free cash flow has grown significantly to 250.92 billion in 2024, showing the company’s ability to generate cash after capital expenditures. However, the negative net income affects the free cash flow to net income ratio, highlighting the need for improved profitability.

TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
322.53M	310.65M	273.18M	285.04M	178.41M	92.93M
	Gross Profit
207.36M	288.90M	156.38M	218.71M	131.13M	38.55M
	EBIT
54.06M	36.99M	109.87M	136.92M	49.31M	-44.32M
	EBITDA
149.18M	36.99M	209.54M	197.76M	88.79M	-202.28M
	Net Income Common Stockholders
26.89M	12.25M	66.45M	111.93M	33.86M	-256.09M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
35.63M	34.17M	30.99M	24.64M	7.05M	9.80M
	Total Assets
1.33B	1.12B	1.34B	1.08B	601.49M	564.63M
	Total Debt
303.65M	242.72M	296.09M	235.25M	219.68M	174.40M
	Net Debt
268.02M	208.55M	265.10M	210.62M	212.63M	164.59M
	Total Liabilities
322.20M	256.42M	309.32M	263.34M	252.64M	186.33M
	Stockholders Equity
0.00	464.22B	671.57B	602.62B	329.60B	258.63B
Cash Flow		Free Cash Flow
12.96M	250.71M	-316.54M	25.18M	35.37M	-26.35M
	Operating Cash Flow
236.02M	250.92M	174.27M	166.64M	91.44M	62.25M
	Investing Cash Flow
-223.07M	-209.89M	-246.68M	-374.72M	-55.57M	-90.83M
	Financing Cash Flow
-17.01M	-247.53M	78.38M	226.06M	-38.62M	24.18M

Kimbell Royalty Partners Lp Technical Analysis

Technical Analysis Sentiment

Positive

Last Price14.11

Price Trends

50DMA

12.55

Positive

100DMA

13.30

Positive

200DMA

14.02

Positive

Market Momentum

MACD

0.32

Negative

RSI

71.10

Negative

STOCH

90.71

Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For KRP, the sentiment is Positive. The current price of 14.11 is above the 20-day moving average (MA) of 13.27, above the 50-day MA of 12.55, and above the 200-day MA of 14.02, indicating a bullish trend. The MACD of 0.32 indicates Negative momentum. The RSI at 71.10 is Negative, neither overbought nor oversold. The STOCH value of 90.71 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for KRP.

Kimbell Royalty Partners Lp Peers Comparison

Overall Rating

UnderperformOutperform

Sector (58)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
DMLP	74 Outperform	$1.32B	13.37	33.71%	10.31%	12.35%	-18.66%
CIVI	71 Outperform	$2.83B	3.50	12.73%	6.36%	22.14%	5.69%
BSM	70 Outperform	$2.94B	15.16	19.93%	10.81%	-12.71%	-39.85%
KRP	68 Neutral	$1.68B	45.09	2.88%	13.53%	3.20%	-91.39%
SBR	66 Neutral	$957.57M	12.30	798.58%	8.08%	-11.35%	-11.76%
SJT	61 Neutral	$297.36M	278.60	39.61%	0.35%	-85.94%	-88.55%
Sector *	58 Neutral	$7.43B	3.43	-4.49%	10.08%	0.81%	-49.42%

* Energy Sector Average

Performance Comparison

KRP

Kimbell Royalty Partners Lp

14.11

-0.51

-3.49%

CIVI

Civitas Resources

31.33

-29.95

-48.87%

DMLP

Dorchester Minerals

28.31

0.80

2.91%

SJT

San Juan Basin Royalty

6.52

2.47

60.99%

SBR

Sabine Royalty

66.40

5.79

9.55%

BSM

Black Stone Minerals

13.92

-0.32

-2.25%

Kimbell Royalty Partners Lp Corporate Events

Private Placements and FinancingDividendsFinancial Disclosures

Kimbell Royalty Partners Reports Record Q1 2025 Results

Positive

May 8, 2025

Kimbell Royalty Partners announced record financial results for the first quarter of 2025, with significant increases in oil, natural gas, and NGL revenues, net income, and consolidated adjusted EBITDA. The company also simplified its capital structure by redeeming 50% of its Series A Cumulative Convertible Preferred Units and increased its borrowing base to $625 million. With robust activity on its acreage, Kimbell declared a Q1 2025 cash distribution of $0.47 per common unit, reflecting a 17.5% increase from Q4 2024 and a 15.8% annualized yield.

Glossary

BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

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.