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Texas Pacific Land earnings put data center and water ambitions in focus
Texas Pacific Land (TPL) just reported second quarter 2026 earnings that highlighted record revenue from royalties and water, along with a clearer push into data center and power related projects.
See our latest analysis for Texas Pacific Land.
Despite the strong second quarter update, Texas Pacific Land's share price has retreated recently, with the stock down 16.1% over the past week and 14.4% over the past month. The year to date share price return is 14.3% and the 1 year total shareholder return is 20.3%, pointing to longer term momentum even as near term enthusiasm cools.
If Texas Pacific Land's data center and power ambitions have your attention, it may be a good time to widen the search and look at 37 power grid technology and infrastructure stocks
Bulls point to Texas Pacific Land's rising royalties, water revenue and large-scale data center and power pipeline. Bears focus on the recent share price pullback and execution risk. Which side does the current valuation appear to support next?
Most Popular Narrative: 23.4% Undervalued
Texas Pacific Land's most followed narrative pegs fair value at $445 per share compared with the latest close at $340.65, putting a spotlight on the gap that bulls and bears are debating.
Diversified revenue streams, stable royalty income, scalable operations, and infrastructure initiatives position the company for resilient earnings, reduced volatility, and long-term growth potential.
Read the complete narrative. Read the complete narrative.
Want to see what is baked into that $445 figure? The narrative focuses on revenue and earnings trajectories and a rich future earnings multiple. Investors can explore how those moving parts fit together in the model.
Result: Fair Value of $445 (UNDERVALUED)
Have a read of the narrative in full and understand what's behind the forecasts.
However, Texas Pacific Land's heavy reliance on Permian royalties, along with ongoing regulatory and ESG scrutiny around water use, could challenge the bullish narrative if conditions tighten.
Find out about the key risks to this Texas Pacific Land narrative.
Another View on Texas Pacific Land's Valuation
The first narrative leans on future earnings power to argue that Texas Pacific Land is undervalued. The current P/E of 43.4x paints a very different picture. This is more than triple the US Oil and Gas industry at 13.1x and well above peers at 11.8x.
It also sits far above the estimated fair ratio of 21x, which is the level the market could move toward over time. If that happens, today's price could face pressure even if fundamentals track expectations. Which story do you think the market is more likely to follow next?
See what the numbers say about this price — find out in our valuation breakdown.
Next Steps
With mixed views on Texas Pacific Land throughout this article, it makes sense to review the data yourself and decide where you stand. To see both the potential upsides and the key concerns in one place, start by weighing the 3 key rewards and 1 important warning sign .
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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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