Today, we delve into the financial performance of Texas Pacific Land Corp (TPL, Financial), a prominent player in the Oil & Gas industry. As of July 24, 2023, TPL's stock price stands at $1,488.51, reflecting a 1.31% gain today and a 16.05% increase over the past four weeks. The company boasts a market capitalization of $11.65 billion. In this analysis, we will explore TPL's GF Score of 95/100, a comprehensive ranking system developed by GuruFocus that predicts stock performance based on five key aspects of valuation.
Financial Strength Analysis
Firstly, we examine TPL's Financial Strength rank of 8/10. This metric gauges the robustness of a company's financial situation, considering factors such as interest coverage and debt to revenue ratio. TPL's debt to revenue ratio is 0.00, indicating the company carries no debt burden. Furthermore, its Altman Z-Score of 58.64, a measure of bankruptcy risk, suggests a healthy financial status.
Profitability Rank Analysis
Next, we turn to TPL's Profitability Rank of 10/10. This rank assesses a company's profitability and its likelihood of maintaining such profitability. TPL's impressive operating margin of 81.47% and a Piotroski F-Score of 7 indicate strong profitability. Moreover, the company has consistently been profitable for the past ten years, further bolstering its high profitability rank.
Growth Rank Analysis
Our analysis continues with TPL's Growth Rank of 10/10. This rank measures a company's growth in terms of revenue and profitability. TPL's 5-year revenue growth rate of 26.20% and 3-year revenue growth rate of 11.00% demonstrate robust growth. Additionally, its 5-year EBITDA growth rate of 24.00% further underscores the company's strong growth trajectory.
GF Value Rank Analysis
We now turn to TPL's GF Value Rank of 9/10. This rank is determined by the price-to-GF-Value ratio, a proprietary metric that considers historical multiples and an adjustment factor based on a company's past returns and growth. TPL's high GF Value Rank suggests that the stock is reasonably valued, offering potential for solid returns.
Momentum Rank Analysis
Lastly, we consider TPL's Momentum Rank of 4/10. This rank is determined using the standardized momentum ratio and other momentum indicators. Despite a relatively low Momentum Rank, TPL's strong performance in other areas compensates for this.
Competitor Analysis
When compared to its main competitors in the Oil & Gas industry, TPL stands out. APA Corp, with a market cap of $12.11 billion, has a GF Score of 81. Ovintiv Inc, with a market cap of $11.70 billion, has a GF Score of 80. Chesapeake Energy Corp, with a market cap of $11.18 billion, lags behind with a GF Score of 27. TPL's superior GF Score of 95 indicates its strong potential for outperformance.
Conclusion
In conclusion, Texas Pacific Land Corp's overall GF Score of 95/100 suggests high outperformance potential, making it an attractive investment option. With strong financial strength, impressive profitability, robust growth, and reasonable valuation, TPL is well-positioned for future success. However, investors should keep an eye on its momentum and monitor market trends and company developments for a comprehensive investment decision.
