Enterprise Value to EBITDA (EV/EBITDA)
Earnings before Interest, Tax, Depreciation and Amortization (EBITDA)
Texas Pacific Land Corp., EBITDA calculation
US$ in thousands
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).
The financial data reveals notable fluctuations in profitability over the observed period. Net income exhibited an initial decline from 318,728 thousand US dollars in 2019 to 176,049 thousand US dollars in 2020, suggesting a period of decreased profitability. However, a recovery is apparent in 2021, with net income rising to 269,980 thousand US dollars, followed by a substantial increase in 2022 reaching 446,362 thousand US dollars. In 2023, net income experienced a slight decrease to 405,645 thousand US dollars, though it remained significantly above the 2019 level.
Earnings before tax (EBT) and earnings before interest and tax (EBIT) followed identical trajectories, starting at 402,255 thousand US dollars in 2019, dropping sharply to 219,662 thousand US dollars in 2020, then rebounding to 363,017 thousand US dollars in 2021. Both metrics peaked at 568,855 thousand US dollars in 2022 before declining to 517,561 thousand US dollars in 2023. This pattern indicates consistent operating profitability trends and suggests that interest expenses were minimal or unchanged, given the parity between EBIT and EBT figures.
EBITDA values also mirrored these trends, beginning at 411,161 thousand US dollars in 2019, decreasing to 234,057 thousand US dollars in 2020, and rising steadily thereafter to a peak of 584,231 thousand US dollars in 2022. The 2023 figure of 532,318 thousand US dollars represents a moderate decline from the prior year but remains elevated relative to earlier periods. The continued growth in EBITDA implies improved operational efficiency and robust core earnings before accounting for depreciation and amortization.
- Trend Summary
- The overall financial performance shows a pronounced dip in 2020 across all profit metrics, potentially reflecting external adverse factors during that year. Subsequently, there was a strong recovery and substantial growth in 2021 and 2022, with margins peaking in 2022. Despite a slight reduction in 2023, profitability remains substantially higher than in the earlier years.
- Profitability Insights
- The alignment between EBIT and EBT suggests stable interest expenses, while the growth in EBITDA indicates enhanced operational profitability excluding non-cash charges. The pattern of the net income relative to EBT signals changes in tax impacts or other non-operating items over time.
- Overall Interpretation
- The company demonstrated resilience following a downturn in 2020, achieving significant improvement in earnings through 2022. The slight decrease in 2023 warrants monitoring but does not undermine the overall positive growth trajectory observed in recent years.
Enterprise Value to EBITDA Ratio, Current
Texas Pacific Land Corp., current EV/EBITDA calculation, comparison to benchmarks
| Selected Financial Data (US$ in thousands) | |
| Enterprise value (EV) | 29,822,736) |
| Earnings before interest, tax, depreciation and amortization (EBITDA) | 532,318) |
| Valuation Ratio | |
| EV/EBITDA | 56.02 |
| Benchmarks | |
| EV/EBITDA, Competitors1 | |
| Chevron Corp. | 6.12 |
| ConocoPhillips | 5.67 |
| Exxon Mobil Corp. | 6.94 |
| Occidental Petroleum Corp. | 6.00 |
| EV/EBITDA, Sector | |
| Oil, Gas & Consumable Fuels | 6.04 |
| EV/EBITDA, Industry | |
| Energy | 6.09 |
Based on: 10-K (reporting date: 2023-12-31).
1 Click competitor name to see calculations.
If the company EV/EBITDA is lower then the EV/EBITDA of benchmark then company is relatively undervalued.
Otherwise, if the company EV/EBITDA is higher then the EV/EBITDA of benchmark then company is relatively overvalued.
Enterprise Value to EBITDA Ratio, Historical
Texas Pacific Land Corp., historical EV/EBITDA calculation, comparison to benchmarks
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Enterprise value (EV)1 | 10,949,083) | 13,255,177) | 7,410,929) | 8,342,714) | 4,956,658) | |
| Earnings before interest, tax, depreciation and amortization (EBITDA)2 | 532,318) | 584,231) | 379,274) | 234,057) | 411,161) | |
| Valuation Ratio | ||||||
| EV/EBITDA3 | 20.57 | 22.69 | 19.54 | 35.64 | 12.06 | |
| Benchmarks | ||||||
| EV/EBITDA, Competitors4 | ||||||
| Chevron Corp. | 6.34 | 4.74 | 7.18 | 18.57 | — | |
| ConocoPhillips | 5.64 | 3.82 | 6.34 | 23.12 | — | |
| Exxon Mobil Corp. | 5.81 | 4.54 | 7.07 | 16.97 | — | |
| Occidental Petroleum Corp. | 5.41 | 3.70 | 5.30 | — | — | |
| EV/EBITDA, Sector | ||||||
| Oil, Gas & Consumable Fuels | 5.90 | 4.40 | 6.79 | 24.59 | — | |
| EV/EBITDA, Industry | ||||||
| Energy | 6.11 | 4.65 | 7.04 | 36.95 | — | |
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).
3 2023 Calculation
EV/EBITDA = EV ÷ EBITDA
= 10,949,083 ÷ 532,318 = 20.57
4 Click competitor name to see calculations.
- Enterprise Value (EV)
- The enterprise value exhibited a marked increase from the end of 2019 through 2022, peaking at approximately US$13.25 billion in 2022. This represents almost a threefold increase from the initial value of around US$4.96 billion in 2019. However, in 2023, there was a notable decline, with the enterprise value decreasing to approximately US$10.95 billion. Despite this drop, the 2023 value remained significantly higher than the levels observed in 2019 to 2021, indicating substantial overall growth across the period.
- Earnings Before Interest, Tax, Depreciation, and Amortization (EBITDA)
- The EBITDA showed considerable volatility throughout the period. It started at approximately US$411 million in 2019, then declined sharply to roughly US$234 million in 2020. This was followed by a recovery to US$379 million in 2021, and a significant increase reaching around US$584 million in 2022. In 2023, EBITDA decreased slightly but remained elevated at approximately US$532 million. This pattern suggests operational performance challenges in 2020, subsequent recovery, and relatively strong earnings generation in the last two years.
- EV/EBITDA Ratio
- The EV/EBITDA ratio exhibited substantial fluctuations, reflecting changes in both enterprise value and EBITDA. It started at 12.06 in 2019, then surged sharply to 35.64 in 2020, indicative of a higher valuation relative to earnings during a period of reduced EBITDA. The ratio subsequently declined to 19.54 in 2021 and moved slightly higher to 22.69 in 2022. In 2023, the ratio decreased to 20.57. The elevated valuations in 2020 and subsequent years suggest a market tendency towards assigning a higher multiple relative to EBITDA, which moderated somewhat but remained above the 2019 baseline.