Texas Pacific Land (TPL): Assessing Valuation After Record Revenues, Midland Basin Deal, and Stock Split

Texas Pacific Land (TPL) delivered a series of important updates this week, highlighted by record revenues and growth across its royalty and water sales businesses. The company also completed a $500 million revolving credit facility and closed a major Midland Basin acquisition, setting the stage for further expansion.

See our latest analysis for Texas Pacific Land.

Texas Pacific Land’s latest news has sparked a strong rebound in its share price, with notable 7-day and 30-day returns of 6.17% and 10.40% respectively, after a long stretch of underperformance. While the shares are still down over 16% so far in 2025 and 1-year total shareholder return stands at -29.5%, momentum has turned positive following record operations, a major acquisition, and a first-ever stock split. This suggests investors are warming up to the company’s refreshed growth strategy.

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But with the share price rebounding and new growth initiatives underway, the question remains: does Texas Pacific Land remain undervalued after its struggles, or has the market already anticipated a turnaround and priced in future gains?

Most Popular Narrative: 6.5% Overvalued

With Texas Pacific Land trading at $981.69 against a narrative fair value of $921.93, there is currently a disconnect between analyst expectations and investor optimism. This gap highlights the bold quantitative assumptions that drive valuation and sets the tone for a deeper exploration of the case behind it.

Rising ESG investment mandates and increasing institutional aversion to fossil fuel assets may lead to shrinking market participation and a lower valuation multiple for TPL's shares, even if near-term financials remain robust, which could pressure both the company's stock price and access to capital.

Read the complete narrative.

What powers this high price tag? Analyze the bullish assumptions, aggressive profit margin forecasts, and the punchy earnings growth estimates that support this number. See exactly what the narrative is considering and what it might be missing.

Result: Fair Value of $921.93 (OVERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, ongoing robust oil and gas royalty growth, or accelerated expansion in water services, could exceed expectations and challenge today’s cautious valuation outlook.

Find out about the key risks to this Texas Pacific Land narrative.

Build Your Own Texas Pacific Land Narrative

If you have a different perspective or want to dig into the numbers firsthand, you can easily build your own story in just a few minutes. Do it your way

A great starting point for your Texas Pacific Land research is our analysis highlighting 1 key reward and 1 important warning sign that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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