Is Texas Pacific Land Corp. overvalued or undervalued?

As of 7 July 2025, the valuation grade for Texas Pacific Land Corp. has moved from fair to very expensive, indicating that the stock is overvalued. The company exhibits a P/E ratio of 56, which is significantly higher than its peer average of approximately 45.45, and a Price to Book Value of 21.22, suggesting a premium valuation compared to its industry. Additionally, the EV to EBITDA ratio stands at 42.86, further reinforcing the notion of overvaluation relative to its peers.
In terms of performance, Texas Pacific Land Corp. has underperformed the S&P 500 year-to-date with a return of -17.42% compared to the index's 12.22%. Over the past three years, while the stock has returned 54.52%, it still lags behind the S&P 500's 70.41% return, indicating a potential misalignment between valuation and market performance. Overall, the combination of high valuation ratios and recent stock performance suggests that Texas Pacific Land Corp. is overvalued.