Texas Pacific Land Corporation
Texas Pacific Land Corporation Fundamental Analysis
Texas Pacific Land Corporation (TPL) shows strong financial fundamentals with a PE ratio of 54.06, profit margin of 60.03%, and ROE of 35.52%. The company generates $0.8B in annual revenue with strong year-over-year growth of 13.09%.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 88.7/100 based on profitability, valuation, growth, and balance sheet metrics. The B+ grade reflects solid fundamentals with room for improvement in valuation or growth.
Fundamental Health Score
We analyze TPL's fundamental strength across five key dimensions:
Efficiency Score
ExcellentTPL demonstrates superior asset utilization.
Valuation Score
WeakTPL trades at a premium to fair value.
Growth Score
ModerateTPL shows steady but slowing expansion.
Financial Health Score
ExcellentTPL maintains a strong and stable balance sheet.
Profitability Score
ExcellentTPL achieves industry-leading margins.
Key Financial Metrics
Is TPL Expensive or Cheap?
P/E Ratio
TPL trades at 54.06 times earnings. This suggests a premium valuation.
PEG Ratio
When adjusting for growth, TPL's PEG of 5.72 indicates potential overvaluation.
Price to Book
The market values Texas Pacific Land Corporation at 17.50 times its book value. This suggests the stock is fully valued or overvalued on an asset basis.
EV/EBITDA
Enterprise value stands at 39.69 times EBITDA. This signals the market has high growth expectations.
How Well Does TPL Make Money?
Net Profit Margin
For every $100 in sales, Texas Pacific Land Corporation keeps $60.03 as profit after all expenses.
Operating Margin
Core operations generate 74.42 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $35.52 in profit for every $100 of shareholder equity.
ROA
Texas Pacific Land Corporation generates $28.75 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
Texas Pacific Land Corporation generates strong operating cash flow of $551.31M, reflecting robust business health.
Free Cash Flow
Texas Pacific Land Corporation generates strong free cash flow of $493.39M, providing ample flexibility for dividends, buybacks, or growth.
FCF Per Share
Each share generates $7.15 in free cash annually.
FCF Yield
TPL converts 1.81% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
54.06
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
5.72
vs 25 benchmark
P/B Ratio
Price to book value ratio
17.50
vs 25 benchmark
P/S Ratio
Price to sales ratio
32.46
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
0.01
vs 25 benchmark
Current Ratio
Current assets to current liabilities
4.23
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
0.36
vs 25 benchmark
ROA
Return on assets percentage
0.29
vs 25 benchmark
ROCE
Return on capital employed
0.38
vs 25 benchmark
How TPL Stacks Against Its Sector Peers
| Metric | TPL Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 54.06 | 21.16 | Worse (Expensive) |
| ROE | 35.52% | 966.00% | Weak |
| Net Margin | 60.03% | -60227.00% (disorted) | Strong |
| Debt/Equity | 0.01 | -0.50 (disorted) | Distorted |
| Current Ratio | 4.23 | 5.18 | Strong Liquidity |
| ROA | 28.75% | -156.00% (disorted) | Strong |
TPL outperforms its industry in 3 out of 6 key metrics, particularly excelling in Net Margin, but lagging in P/E Ratio.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews Texas Pacific Land Corporation's 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
167.09%
Industry Style: Cyclical, Value, Commodity
High GrowthEPS CAGR
176.83%
Industry Style: Cyclical, Value, Commodity
High GrowthFCF CAGR
166.95%
Industry Style: Cyclical, Value, Commodity
High Growth