Start here if you're new
what it is
Texas Pacific Land gets paid when oil, gas, and water move across 873,000 acres in West Texas.
how it gets paid
Last year Texas Pacific Land made $798M in revenue. Oil and gas royalties was the main engine at $422M, or 53% of sales.
why it's growing
Revenue grew 13.1% last year. Quarterly earnings kept grinding higher, with 2025 EPS landing at $6.95 versus $6.57 in 2024 based on the quarterly history.
what just happened
TPL's latest quarter beat estimates, with EPS of $1.79 versus the $1.70 consensus.
At a glance
A balance sheet — strong enough to weather a downturn
60/100 earnings predictability — reasonably predictable
44.6x trailing p/e — you're paying up for this one
0.7% dividend yield — cash in your pocket every quarter
67.0% return on capital — a money-printing machine
xvary composite: 67/100 — average
What they do
Texas Pacific Land gets paid when oil, gas, and water move across 873,000 acres in West Texas.
TPL owns 873,000 acres in the Permian, and you do not rebuild that map with a bigger checkbook. Royalties made up 52.9% of 2024 revenue, which means royalties → money from other people drilling on your land → so what, TPL gets paid without funding most wells itself. That is why return on capital hit 67.0% and net profit margin reached 62.2%.
How they make money
$798M
annual revenue · their business grew +13.1% last year
Oil and gas royalties
$422M
Water sales and royalties
$288M
Other surface and land sales
$88M
The products that matter
collects royalties and surface fees
Royalties & Land Management
$399M · about half of revenue
this segment generated $399M by collecting royalties and monetizing land use on TPL acreage. it's the purest version of the thesis: you own the dirt, someone else spends the drilling capital.
$399M
handles water and related land use
Water Services & Land Development
$319M · roughly 40% of revenue
this business brought in $319M from water handling and land-related activity. it's a second monetization layer on the same acreage, not a separate geography.
$319M
adjacent infrastructure bets
Data center partnership
$50M commitment shown
the $50M Bolt Data & Energy deal is small next to a $798M revenue base. for now, it's optional upside rather than something you should underwrite heavily.
early
Key numbers
74.2%
operating margin
Operating margin → revenue left after running the business → so what, TPL keeps about 74 cents from every dollar before taxes and interest.
67.0%
return on capital
Return on capital → profit earned on money put into the business → so what, this is far above what most companies produce.
$798M
annual revenue
Revenue grew 13.1% vs. prior year, which shows TPL is still expanding despite already extreme profitability.
44.6x
trailing p/e
P/E → how many dollars investors pay for $1 of earnings → so what, you are paying a luxury multiple for an energy-linked company.
Financial health
A
strength
- balance sheet grade A — very strong financial position
- risk rank 3 — safer than 50% of stocks
- price stability 30 / 100
- net profit margin 62.2% — keeps 62 cents of every dollar in revenue
- return on equity 67% — $0.67 profit for every $1 investors have put in
A with balance sheet grade and net profit margin standing out. your money faces less risk here than at most public companies.
Total return vs. market
You invested $10,000 in TPL 3 years ago → it's now worth $13,790.
The index would have given you $14,770.
source: institutional data · total return
What just happened
beat estimates
TPL's latest quarter beat estimates, with EPS of $1.79 versus the $1.70 consensus.
Quarterly earnings kept grinding higher, with 2025 EPS landing at $6.95 versus $6.57 in 2024 based on the quarterly history. Through the first nine months of 2025, revenue rose 13% and EPS rose 7%, which says growth is still there but not exploding.
$587M
revenue
$1.79
eps
5.29%
surprise
the number that mattered
The number that mattered was the 5.29% EPS beat, because a stock at 44.6x earnings needs clean beats to justify the price.
-
texas pacific land has been making solid progress.
-
through the first nine months of 2025, earnings were up 7%, to $5.19 a share on a 13% increase in revenues. (all per-share data have been adjusted for 3-for-1 stock split, effective 12/23/25.) weak energy prices have been a headwind, but oil and gas royalty production continued to rise, averaging 36,300 barrels of oil per day (boe/d) in the september quarter, up 28% from the 2024 comparable period.
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a november acquisition should boost output by another 3,700 boe/d.meanwhile, contributions from the water services operations have advanced, as well, bolstered by healthy increases in produced water royalties.
-
overall, we expect the positive top- and bottom-line comparisons persisted through the december quarter, and anticipate sales and earnings growth of 12% and 6%, respectively, for the 2026 full year.
-
texas pacific is exploring artificial intelligence (ai)-related opportunities.last month, the company signed an agreement with bolt data & energy to develop and support data center campuses in west texas. as part of the transaction, texas pacific invested $50 million in return for an equity interest, warrants, and the opportunity to supply water to related projects.
source: company earnings report, 2026
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What could go wrong
the #1 risk is permian drilling activity cooling off. TPL monetizes royalties, water, and land use in one basin. If operator activity slows there, the whole machine loses torque.
med
permian volume risk
$399M of royalties and land management revenue depends on operators keeping wells active on TPL acreage.
If drilling and production cool, the highest-margin revenue stream feels it first and the premium multiple loses its cleanest defense.
med
water concentration wearing a different label
Water Services & Land Development generated $319M. That's large, but it still depends on the same regional oilfield activity that drives royalties.
This is diversification by revenue bucket more than by geography. If Permian activity weakens, both engines can slow together.
med
valuation compression
At 44.6x trailing earnings, you are paying a premium price for a business with real commodity-linked sensitivity even if TPL does not drill itself.
A merely decent quarter can be enough to pressure the stock if growth drifts toward single digits or margins step down from the high-50s.
Between the $399M royalty business and the $319M water and land segment, about 90% of TPL's $798M revenue base still traces back to activity in one basin.
source: institutional data · regulatory filings · risk analysis
Pay attention to
metric
net margin staying near 59%
A 58.8% full-year net margin and 59.7% quarterly margin are the whole appeal here. If that slips, the scarcity story alone will not carry 44.6x earnings forever.
trend
water services contribution
Water Services & Land Development produced $319M. You want to see that line keep growing enough to matter, not just sit there while royalties do the heavy lifting.
calendar
next earnings for growth vs. multiple
Revenue rose 13% through the first nine months of 2025, while earnings per share rose 7%. The catch is simple: the next print needs to narrow that gap, not widen it.
risk
whether the $50M data center bet becomes material
The Bolt Data & Energy partnership could become a useful adjacent growth lane. Right now, $50M is small next to a $798M revenue base, so keep your enthusiasm sized to the number.
Analyst rankings
short-term outlook
average
momentum score 3 — in human-speak, analysts do not see a clean near-term edge either way.
risk profile
average
stability score 3 — the business quality is high, but the stock is not unusually defensive.
chart momentum
below average
technical score 4 — the chart has looked worse than the operating story.
earnings predictability
60 / 100
predictability is decent, not pristine. you should expect some variance because basin activity still drives results.
source: institutional data
Institutional activity
institutions have been net selling for 2 consecutive quarters — 307 buyers vs. 326 sellers in 3q2025. total institutional holdings: 48.9M shares. net selling for 2 quarters.
source: institutional data
Price targets
3-5 year target range
$237
$533
$310
current price
$385
target midpoint · +24% from current · 3-5yr high: $560 (+80% · 17% ann'l return)
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