Texas Pacific Land Corp (TPL, Financial), a prominent player in the oil and gas industry, has experienced a notable fluctuation in its stock price recently. With a current market capitalization of $15.85 billion, the stock price stands at $689.25. Over the past week, TPL has seen a decline of 5.07%, yet over the last three months, the stock has surged by 16.51%. This recent performance reflects a shift from a past valuation where the stock was considered modestly undervalued with a GF Value of $1,961.6, to its current status as fairly valued at a GF Value of $668.97.
Overview of Texas Pacific Land Corp
Engaged primarily in the management of land sales and leases, Texas Pacific Land Corp retains oil and gas royalties and oversees the land it owns. The company operates through two segments: Land and Resource Management, and Water Service and Operations. The former focuses on managing oil and gas royalty interests and surface acres, while the latter offers comprehensive water services to operators. The majority of TPL's revenue is generated from the Land and Resource Management segment. 
Exceptional Profitability Metrics
TPL boasts a Profitability Rank of 9/10, indicating robust profitability relative to its peers. The company's Operating Margin stands at an impressive 78.43%, outperforming 98.45% of 970 companies in the same sector. Additionally, TPL's Return on Equity (ROE) and Return on Assets (ROA) are 44.72% and 39.76% respectively, both metrics surpassing the majority of their industry counterparts. The Return on Invested Capital (ROIC) is particularly striking at 112.64%, better than 99.26% of 1075 companies, underscoring TPL's efficiency in generating cash flow relative to the capital invested. 
Robust Growth Trajectory
The company's Growth Rank is a perfect 10/10. TPL has demonstrated a strong 3-Year Revenue Growth Rate per Share of 28.20%, and a 5-Year Rate of 15.80%. Looking ahead, the Total Revenue Growth Rate (Future 3Y To 5Y Est) is projected at 10.02%. In terms of earnings, the 3-Year EPS without NRI Growth Rate is 32.50%, and the 5-Year Rate is 14.70%. These figures highlight TPL's consistent ability to expand its revenue and earnings, outperforming a significant portion of its industry peers. 
Significant Shareholders
Among the notable shareholders, Murray Stahl (Trades, Portfolio) holds a significant portion of TPL's shares, amounting to 3,776,383 shares or 16.43% of the company. Other prominent investors include Jim Simons and David Rolfe (Trades, Portfolio), holding smaller stakes of 0.12% and 0.06% respectively. These investments reflect confidence in TPL's business model and future prospects.
Competitive Landscape
In comparison to its competitors, TPL holds a strong position. Marathon Oil Corp (MRO, Financial) with a market cap of $15.71 billion, Ovintiv Inc (OVV, Financial) at $12.74 billion, and Chesapeake Energy Corp (CHK, Financial) at $11.6 billion are key players in the same industry. TPL's performance and strategic management allow it to compete effectively within this competitive landscape.
Conclusion
In conclusion, Texas Pacific Land Corp's impressive stock performance over the past three months can be attributed to its strong profitability metrics and robust growth trajectory. The company's strategic operations in land and resource management, coupled with its efficient capital deployment, position it well for sustained growth. Investors should consider the implications of the stock's current valuation and recent price changes when making investment decisions. TPL's ability to maintain high profitability and growth rates makes it a noteworthy contender in the oil and gas sector.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
