Texas Pacific LandTPL -2.03%86 Operating Margin % is 76.99% as of Mar. 2026, which is 5% below its 10-year median of 80.91. GuruFocus rates TPL with a GF Score™ of 86/100 and a GF Value™ of $371.39 (Fairly Valued). The stock has 2 warning signs investors should review. Among 917 Oil & Gas companies, Texas Pacific Land ranks better than 98.58% on this metric.
Texas Pacific Land (NYSE:TPL) Operating Margin % Explanation
Just like Gross Margin %, it is important to see a company maintains its operating margin over time. Among the same industry, a company with higher operating margin is more efficient in its operation. It is also more stable during industry slowdown or recessions. Peter Lynch prefers those with higher margins than those with lower margins.
Be Aware
Operating Margin % can be manipulated by adjusting the rate of depreciation, depletion and amortization (DDA).
If a company is facing competition, its Operating Margin % may decline. Often the Operating Margin % declines well before the company's Revenue or even profit decline. Therefore, Operating Margin % is a very important indicator of whether the company is facing problems.
For instance, by 2012, Nokia (NOK)'s problems were well known and its stock had lost more than 90% of its market value since 2007. But Nokias Operating Margin % had already been in decline since 2002, although its Earnings per Share (Diluted) were still rising. Investors who paid attention to Operating Margin % would have avoided this huge loss. The same can be said for Research-in-Motion (RIMM).
Therefore, Operating Margin % is a very important screening filter for GuruFocus. GuruFocus's Buffett-Munger screener requires that the profit margin is either consistent or expanding. The Model Portfolio of the Buffett-Munger screener has outperformed the market every year since inception in 2009.
Texas Pacific Land Operating Margin % Related Terms
Texas Pacific Land Operating Margin % Historical Data
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The historical data trend for Texas Pacific Land's Operating Margin % can be seen below:
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
TPL vs EQT, EXE, PR: Operating Margin % Comparison
For the Oil & Gas E&P subindustry, Texas Pacific Land's Operating Margin %, along with its competitors' market caps and Operating Margin % data, can be viewed below:
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.
Texas Pacific Land Operating Margin % vs Oil & Gas Industry
For the Oil & Gas industry and Energy sector, Texas Pacific Land's Operating Margin % distribution charts can be found below:
* The bar in red indicates where Texas Pacific Land's Operating Margin % falls into.
Operating Margin % - also known as operating income margin, operating profit margin and return on sales (ROS) - is the ratio of Operating Income divided by net sales or Revenue, usually presented in percent.
Texas Pacific Land's Operating Margin % for the fiscal year that ended in Dec. 2025 is calculated as
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
Texas Pacific Land (TPL) has a Operating Margin % of 76.99% as of Mar. 2026. Operating margin is the ratio of total operating income to net sales. View historical data on Texas Pacific Land and its competitors. This is near median its historical median of 80.91. Over the past decade, Texas Pacific Land's Operating Margin % has ranged from 71.81 to 95.16. According to the industry distribution chart, Texas Pacific Land ranks #13 out of 917 companies in the Oil & Gas industry, placing it in the top 1.4%.
Is Texas Pacific Land's Operating Margin % too high?
Texas Pacific Land's current Operating Margin % of 76.99% is near median its 10-year median of 80.91. Over the past 10 years, this metric has ranged from a low of 71.81 to a high of 95.16. The Oil & Gas industry median Operating Margin % is 6.87. Texas Pacific Land's value of 76.99% is 1020.7% above this industry median. Based on the distribution chart, Texas Pacific Land ranks #13 out of 917 companies in the Oil & Gas industry, which is in the top quartile — a strong position relative to peers. Overall, Texas Pacific Land has a GF Score™ of 86/100 and is considered Fairly Valued, reflecting its overall financial health beyond just this single metric.
How does Texas Pacific Land's Operating Margin % compare to EQT and EXE?
According to the Oil & Gas industry distribution chart, Texas Pacific Land ranks #13 out of 917 companies for Operating Margin %. This places Texas Pacific Land in the top 1% of its industry — outperforming the majority of peers. The industry median Operating Margin % is 6.87. Texas Pacific Land's value of 76.99% is 1020.7% above this benchmark. Historically, Texas Pacific Land's own Operating Margin % has ranged from 71.81 to 95.16 over the past decade. While the company's 10-year median is 80.91 vs. the industry median of 6.87, Texas Pacific Land has consistently been above the industry average. See the competitive comparison table and distribution chart on this page for a detailed peer-by-peer breakdown.
What is a good Operating Margin % for an Oil & Gas company?
The median Operating Margin % among Oil & Gas companies is 6.87, based on 917 companies in the industry. Companies in the top quartile (top 25%) have a Operating Margin % significantly above this median, while those in the bottom quartile fall well below. However, Operating Margin % should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. Texas Pacific Land's current Operating Margin % of 76.99% is 1020.7% above the industry median. Use the industry distribution chart on this page to see where any company falls relative to its peers.
What does a high Operating Margin % mean?
A high Operating Margin % can signal that a stock is expensive relative to its fundamentals. Operating margin is the ratio of total operating income to net sales. View historical data on Texas Pacific Land and its competitors. For the Oil & Gas industry, the median Operating Margin % is 6.87 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. Texas Pacific Land's current Operating Margin % is 76.99%, which is near median its own 10-year median of 80.91. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is Texas Pacific Land stock overvalued right now?
Based on GuruFocus' analysis, Texas Pacific Land (TPL) is currently considered Fairly Valued. The stock's GF Value™ is $371.39, compared to a current price of $394.57 — trading 6.2% above its estimated fair value. The current Operating Margin % is 76.99%, which is near median its 10-year median of 80.91 and 1020.7% above the Oil & Gas industry median of 6.87. Texas Pacific Land's overall GF Score™ is 86/100 with 2 warning signs to review. Investors should evaluate multiple metrics — including profitability, growth, and financial strength — before making a decision.
How is Operating Margin % calculated?
Operating Margin % is calculated from a company's financial statements. For Texas Pacific Land (TPL), the current Operating Margin % is 76.99% as of Mar. 2026. GuruFocus calculates this using data sourced from SEC filings and annual reports. See the calculation section and 30-year financial data on this page for the full breakdown.
Is Texas Pacific Land (TPL) Overvalued in 2026?
Based on GuruFocus' analysis, Texas Pacific Land stock appears to be overvalued.
The current stock price of $394.57 is trading 6.2% above its estimated GF Value™ of $371.39.
GuruFocus considers Texas Pacific Land to be Fairly Valued.
Key valuation signals for TPL:
Operating Margin %: 76.99% (near median its 10-year median of 80.91)
GF Value™: $371.39 vs. price of $394.57 (6.2% above fair value)
Industry Position: 1020.7% above the Oil & Gas median (#13 of 917)
No single metric tells the full story. See the TPL stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
Texas Pacific Land Corp is mainly engaged in the sales and leases of land owned, retaining oil and gas royalties, and the overall management of the land owned. The group operates its business in two reportable segments: Land and Resource Management and Water Service and Operations. The Land and Resource Management segment, which generates maximum revenue, focuses on managing its several surface acres of land and its oil and gas royalty interests, principally concentrated in the Permian Basin. The revenue streams of this segment consist of royalties from oil and gas, revenues from easements and commercial leases, and land and material sales. The Water Services and Operations segment encompasses the business of providing a full-service water offering to operators in the Permian Basin.
86GF Score
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