Texas Pacific Land (TPL) just put a big new chapter in its story, committing $50 million to partner with Bolt Data and Energy on AI focused data center campuses across its West Texas land.
See our latest analysis for Texas Pacific Land.
The Bolt partnership and upcoming three for one stock split have sparked a sharp 1 day share price move of 7.6% to about $883. However, that jump comes after a tougher stretch, with the year to date share price return still down more than 25%, even as the 5 year total shareholder return of just over 300% shows how powerful the longer term compounding story has been.
If this AI infrastructure bet has you rethinking where growth could come from next, it might be worth scanning high growth tech and AI stocks to spot other potential beneficiaries of rising compute demand.
With TPL still down sharply this year despite double digit revenue and profit growth, investors now need to ask whether the market is overlooking the long term AI optionality here or whether it is already pricing in years of future growth.
With Texas Pacific Land closing at $883 versus a narrative fair value of $842.50, the current market price sits slightly ahead of implied fundamentals.
The analysts have a consensus price target of $921.93 for Texas Pacific Land based on their expectations of its future earnings growth, profit margins and other risk factors. In order for you to agree with the analyst’s consensus, you would need to believe that by 2028, revenues will be $895.3 million, earnings will come to $610.3 million, and it would be trading on a PE ratio of 41.9x, assuming you use a discount rate of 6.4%.
Want to know what justifies that rich future earnings multiple on a royalty heavy energy business? The narrative leans on ambitious growth, fatter margins, and a premium valuation usually reserved for market darlings. Curious which specific assumptions need to hold for that outlook? Explore the full set of inputs and reasoning behind this fair value estimate.
Result: Fair Value of $842.50 (OVERVALUED)
Have a read of the narrative in full and understand what’s behind the forecasts.
However, ongoing robust royalty growth and expanding water services could sustain high margins and cash flows, which may support a premium valuation for longer than bears expect.
Find out about the key risks to this Texas Pacific Land narrative.
Our DCF model paints a softer picture than the narrative fair value, putting Texas Pacific Land’s worth closer to $905.48 per share, which makes today’s $883 price look about 2.5% undervalued rather than overvalued. If the market leans toward cash flows over multiples, which signal wins out?
Look into how the SWS DCF model arrives at its fair value.
TPL Discounted Cash Flow as at Dec 2025
Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Texas Pacific Land for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover 911 undervalued stocks based on their cash flows. If you save a screener we even alert you when new companies match – so you never miss a potential opportunity.
If you see the story differently or want to stress test the numbers yourself, you can shape a custom view in minutes, Do it your way.
A great starting point for your Texas Pacific Land research is our analysis highlighting 3 key rewards 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.
Companies discussed in this article include TPL.
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