Texas Pacific Land (TPL) AI Stock Analysis

• Market Cap: $36.67B
• Dividend Yield: 0.72%
• Average Volume (3M): 448.81K
• Price to Earnings (P/E): 72.1
• Beta (1Y): 1.26
• Revenue Growth: 12.48%
• EPS Growth: 6.24%
• Country: US
• Employees: 111
• Sector: Energy
• Sector Strength: 52
• Industry: Oil & Gas Exploration & Production
• EPS (TTM): 1.79
• Shares Outstanding: 68,941,550
• 10 Day Avg. Volume: 666,296
• 30 Day Avg. Volume: 448,809
• PEG Ratio: 6.83
• Price to Book (P/B): 13.57
• Price to Sales (P/S): 24.81
• P/FCF Ratio: 40.72
• Enterprise Value/Market Cap: 1.00
• Enterprise Value/Revenue: 45.80
• Enterprise Value/Gross Profit: 45.80
• Enterprise Value/Ebitda: 55.78
• 1Y Price Target: $639.00
• Price Target Upside: -25.95% Downside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 1
• EPS Forecast (FY): 8.12
• Revenue Forecast (FY): $953.50M

• Rating: 81 Outperform
• Price Target: $509.00 ▼(-41.01% Downside)
• Action: Reiterated Date: 02/19/26
• Date: Action: Reiterated 02/19/26

The score is driven primarily by exceptional financial strength (high margins, strong cash conversion, and minimal leverage) and a largely constructive earnings update with strong liquidity and growth initiatives. Offsetting factors are a technically overbought setup and a high valuation (elevated P/E with low yield), which increases downside sensitivity if growth or execution slows.

Positive Factors

Conservative Balance Sheet

TPL's near-zero leverage and a debt-to-equity ratio around 0.01 provide durable financial flexibility. This conservative capital structure supports opportunistic M&A, capital spending for strategic projects, and stable shareholder returns without reliance on external funding during commodity or cycle stress.

High Profitability & Cash Conversion

Exceptional margins and strong operating cash flow (FCF closely tracking earnings) create persistent free cash generation. High cash conversion funds capex, dividends, buybacks and strategic investment optionality, making core cash flows resilient across multi‑year cycles despite commodity swings.

Strategic Diversification Initiatives

Investments in desalination and data‑center partnerships provide durable optionality beyond royalties. If executed, these initiatives can create new recurring revenue streams, leverage TPL land/water rights, and de‑risk commodity dependence by capturing long-term structural demand from water services and AI compute infrastructure.

Negative Factors

Growth & FCF Volatility

TPL exhibits notable revenue and FCF variability across years (FCF dipped ~5.5% in 2025). Persistent volatility can complicate planning for large-scale desalination/data center investments and makes multi‑year cash flow forecasting less certain, increasing execution and reinvestment risk.

Execution / Timing Risk on New Projects

Orla Phase 2b delays and unanswered scaling economics create sustained execution risk. Large desalination and co‑located data center plans depend on technical, permitting and power solutions; multi‑year uncertainty could delay revenue diversification and require additional capital or partnerships to scale economically.

Commodity & Activity Exposure

TPL's royalty and lease income remain sensitive to oil prices and basin activity. A prolonged weaker price environment or sustained rig declines can reduce lease bonuses, royalties and well completions, pressuring longer-term revenue growth and increasing dependency on successful diversification to offset commodity cyclicality.

Texas Pacific Land Business Overview & Revenue Model

Company Description

Texas 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 Money

Texas Pacific Land generates revenue through multiple key streams. Primarily, it earns money by leasing its land to oil and gas companies, who pay for the right to explore and extract resources. The company receives lease bonuses, which are upfront payments made by lessees, and ongoing royalties based on the volume of oil and gas produced from its properties. Additionally, TPL earns revenue from surface use agreements, allowing companies to use the land for activities related to energy extraction, such as drilling sites and pipelines. The company's significant land holdings in resource-rich areas, particularly in the Permian Basin, enhance its revenue potential. Furthermore, TPL may engage in partnerships with exploration and production companies, leveraging its land assets to foster profitable arrangements that contribute to its earnings.

Texas Pacific Land Financial Statement Overview

Summary

Financials are standout: very high profitability (net margin ~60% in 2025; EBITDA margin ~84%), exceptionally conservative balance sheet (near-zero leverage), and strong, high-quality cash generation with FCF closely tracking earnings. Main offsets are growth/FCF volatility and a modest 2025 deceleration versus 2024.

Income Statement

Revenue has expanded strongly over the cycle (from $303M in 2020 to $798M in 2025), with a modest +3.3% increase in 2025 after a stronger 2024. Profitability is exceptional for the industry: net profit margin remains very high (~60% in 2025; ~64% in 2024) and EBITDA margin is also extremely strong (~84% in 2025). The main weakness is growth volatility (notably the 2023 and 2020 declines) and some margin inconsistency in the latest year due to missing/zero-reported gross and EBIT margin fields for 2025, which reduces comparability.

Balance Sheet

The balance sheet is exceptionally conservative with minimal leverage (debt-to-equity ~0.01 in 2025 and near-zero in prior years), giving substantial financial flexibility. Equity and assets have grown meaningfully over time, and returns on equity remain very strong (about 33% in 2025; roughly 39–58% in 2021–2023). The key watch item is that ROE has eased from prior peak levels and 2025 debt rose versus 2024 (still very low in absolute terms).

Cash Flow

Cash generation is robust and high-quality: operating cash flow is strong ($546M in 2025) and closely tracks earnings (free cash flow is ~89% of net income in 2025 and ~94–96% in 2022–2024). The company easily covers its debt burden with operating cash flow (coverage ~7.5x in 2025). The primary weakness is near-term deceleration—free cash flow declined ~5.5% in 2025 after growth in 2024, reflecting some volatility despite consistently high conversion.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	798.19M	705.82M	631.60M	667.42M	450.96M
Gross Profit	798.19M	634.54M	583.27M	634.53M	421.47M
EBITDA	655.46M	564.30M	500.81M	577.68M	378.65M
Net Income	481.38M	453.96M	405.64M	446.36M	269.98M
Balance Sheet
Total Assets	1.62B	1.25B	1.16B	877.43M	764.06M
Cash, Cash Equivalents and Short-Term Investments	144.81M	369.83M	725.17M	510.83M	428.24M
Total Debt	32.35M	453.00K	1.17M	1.96M	1.45M
Total Liabilities	164.37M	115.56M	113.20M	104.54M	112.35M
Stockholders Equity	1.46B	1.13B	1.04B	772.89M	651.71M
Cash Flow
Free Cash Flow	486.38M	460.98M	403.26M	427.94M	249.62M
Operating Cash Flow	545.91M	490.67M	418.29M	447.15M	265.16M
Investing Cash Flow	-595.85M	-471.75M	-60.31M	-21.40M	-15.00M
Financing Cash Flow	-176.04M	-378.09M	-144.61M	-336.81M	-104.95M

Texas Pacific Land Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 862.91
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: Negative

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 862.91 is above the 20-day moving average (MA) of 393.19, above the 50-day MA of 340.42, and above the 200-day MA of 334.51, indicating a bullish trend. The MACD of 41.87 indicates Negative momentum. The RSI at 86.94 is Negative, neither overbought nor oversold. The STOCH value of 85.98 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TPL.

Texas Pacific Land Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
TPL	81 Outperform	$36.67B	72.11	37.15%	0.72%	12.48%	6.24%
DVN	77 Outperform	$26.83B	10.46	17.60%	2.64%	11.14%	-21.32%
PR	77 Outperform	$14.77B	16.22	8.58%	4.27%	7.55%	-34.40%
CTRA	74 Outperform	$23.14B	14.19	11.86%	3.39%	26.13%	31.42%
AR	74 Outperform	$10.44B	16.68	8.71%	―	17.05%	1028.81%
OVV	69 Neutral	$14.19B	10.63	2.26%	3.16%	-8.07%	-87.88%
Sector *	65 Neutral	$15.17B	7.61	4.09%	5.20%	3.87%	-62.32%

Texas Pacific Land Corporate Events

Texas Pacific Land Highlights Record Results, Strategic Expansion

Texas Pacific Land Corporation, a major Permian Basin-focused land and royalty owner, reported record fourth-quarter and full-year 2025 consolidated revenues, net income and free cash flow, driven by surging oil and gas royalty production, strong water services performance and higher surface-related income. On February 18, 2026, the company detailed a year of aggressive capital deployment, including a $450.7 million Midland Basin royalty acquisition, a $50 million strategic investment in data infrastructure firm Bolt Data & Energy, a new $500 million revolving credit facility, a three-for-one stock split and a 12.5% dividend increase, underscoring ample liquidity, expanding exposure to next-generation data-center and desalination opportunities, and enhanced returns for shareholders despite commodity price headwinds.

The most recent analyst rating on (TPL) stock is a Buy with a $403.00 price target. To see the full list of analyst forecasts on Texas Pacific Land stock, see the TPL Stock Forecast page.

Texas Pacific Land Partners with Bolt Data & Energy

On December 17, 2025, Texas Pacific Land Corporation announced a strategic partnership with Bolt Data & Energy, Inc. to develop large-scale data center campuses on TPL-owned land in West Texas. This collaboration, aligned with Bolt’s vision of creating a world-leading data center network, is set to leverage abundant local energy resources while potentially transforming the region into a hub for AI compute infrastructure. As part of the agreement, Bolt raised $150 million, including a $50 million investment from TPL, granting TPL significant equity participation and rights to provide water for future projects.

The most recent analyst rating on (TPL) stock is a Buy with a $1017.00 price target. To see the full list of analyst forecasts on Texas Pacific Land stock, see the TPL Stock Forecast page.

Texas Pacific Land Announces Forward Stock Split

On November 5, 2025, Texas Pacific Land Corporation announced a three-for-one forward stock split of its common stock, which will become effective on December 22, 2025. This move is expected to increase the number of authorized shares significantly, with trading on a split-adjusted basis commencing on December 23, 2025, potentially impacting the company’s market positioning and shareholder value.

The most recent analyst rating on (TPL) stock is a Buy with a $1050.00 price target. To see the full list of analyst forecasts on Texas Pacific Land stock, see the TPL Stock Forecast page.