Is Kimbell Royalty Partners LP overvalued or undervalued?

As of 24 February 2022, Kimbell Royalty Partners LP has moved from a valuation grade of risky to very attractive, indicating a significant improvement in its investment appeal. The company is currently undervalued, with a P/E ratio of 24, which is higher than the industry average of 17.49 for Black Stone Minerals LP and 10.82 for Blackstone Secured Lending Fund. Additionally, Kimbell's EV to EBITDA stands at 7.98, while its peers like Sitio Royalties Corp. have a lower EV to EBITDA of 7.73.
In terms of profitability, Kimbell Royalty Partners LP has a ROCE of 9.43% and an ROE of 7.58%, which are competitive but suggest room for improvement compared to its peers. The company's recent stock performance shows a 1-month return of 9.25%, outperforming the S&P 500's 3.83% return in the same period, reinforcing the notion that the stock may be undervalued relative to its growth potential. Overall, Kimbell Royalty Partners LP presents an attractive investment opportunity at its current price of $14.29.