Texas Pacific Land Corporation (TPL) DCF Valuation
TGM's two-stage DCF values Texas Pacific Land Corporation (TPL) between $186.08 and $348.72 depending on assumptions, with a base case of $254.22. Growth is taken from the company's own record (blend of 5-year revenue and FCF growth (capped at 18%)), fading to 2.5% long-run; the discount rate (7.5%) reflects its beta.
What would today's price require?
$395.79 is justified only if free cash flow grows about +29.3% a year (fading to 2.5% long-run) at a 7.5% required return — faster than the company has actually grown.
| Scenario | FCF growth (fading to 2.5%) | Discount | Value / share |
|---|---|---|---|
| Conservative | 15.0%/yr | 8.5% | $186.08 |
| Base case | 18.0%/yr | 7.5% | $254.22 |
| Optimistic | 20.0%/yr | 6.5% | $348.72 |
| Analyst DCF (FMP) | independent reference — different model | $355.23 | |
Current Price
$395.79
Market-Implied Growth
+29.3%/yr
vs +18.8% 5Y actual
Model Scenario Range
$186.08 – $348.72
model output — not a price target
TPL DCF Fair Value Calculator
Edit the assumptions to see how they change the estimated fair value. Opens seeded with TGM's data-driven base case for TPL (growth from its own 5-year record, discount from its beta), so the sandbox starts where the scenarios above leave off. Illustrative model — not investment advice.
Base inputs: FCF $444.5M · 0.07B shares · net cash $128.6M
Estimated Fair Value
$448.80
+13.4% vs $395.79
Sensitivity — fair value by discount rate × terminal growth
How the estimated fair value shifts with the discount rate (WACC) and terminal growth, holding your 18.0%/yr FCF growth and 10-year horizon fixed. Green = above today's $395.79; red = below. Your current case is outlined.
| WACC ↓ / Terminal → | 1.50% | 2.00% | 2.50% | 3.00% | 3.50% |
|---|---|---|---|---|---|
| 5.5% | $628 | $703 | $802 | $941 | $1149 |
| 6.5% | $485 | $527 | $580 | $649 | $740 |
| 7.5% | $390 | $417 | $449 | $488 | $537 |
| 8.5% | $323 | $341 | $362 | $386 | $416 |
| 9.5% | $274 | $286 | $301 | $317 | $336 |
About Texas Pacific Land Corporation
Texas Pacific Land Corporation (TPL) operates in two core business segments: land and resource management, and water services. Its Land and Resource Management division oversees a vast land portfolio, spanning nearly 880,000 acres. This segment also holds significant oil and gas royalty interests. These include perpetual non-participating royalty interests (NPRIs) covering approximately 85,000 acres (at a 1/128th rate) and about 371,000 acres (at a 1/16th rate). Furthermore, it possesses around 4,000 additional net royalty acres, primarily located in West Texas. The segment grants various easements and commercial leases for purposes such as oil, gas, and hydrocarbon infrastructure, power and utility lines, and subsurface wellbores. It also leases its land for facilities like processing, storage, and compression plants, as well as roads, and sells materials such as caliche. The Water Services and Operations division provides comprehensive water solutions to energy operators throughout the Permian Basin. Its services encompass water sourcing, the gathering and treatment of produced water, infrastructure development, disposal solutions, water tracking, analytics, and well testing. This segment also generates royalty income from water extracted from its own lands. Founded in 1888, Texas Pacific Land Corporation maintains its headquarters in Dallas, Texas.
- Sector
- Energy
- Industry
- Oil & Gas Exploration & Production
- CEO
- Tyler Glover