Abstract

Texas Pacific Land will report quarterly results on February 18, 2026 Post Market; this preview outlines expected revenue growth, margin and EPS trajectories, and how segment dynamics are poised to shape the near-term performance.

Market Forecast

Consensus points to Texas Pacific Land delivering revenue of 214.00 million, representing 15.68% year-over-year growth, with EBIT of 156.00 million (up 13.04% year-over-year) and adjusted EPS of 3.60 (down 30.05% year-over-year). Forecasts do not include margin guidance, so expectations center on the interplay of segment mix and cost trends affecting bottom-line conversion from the anticipated revenue uplift and EBIT expansion.

The company’s core business extends from its royalty-driven land and resource activities to water services and operations, with last quarter’s split showing a balanced contribution between the two. The most promising segment in the near term is Water Services and Operations, which generated 93.56 million last quarter, supported by the company’s overall 17.01% year-over-year revenue growth in that period and positioned to leverage sustained field activity and demand normalization.

Last Quarter Review

Texas Pacific Land posted revenue of 203.09 million last quarter, delivered a gross profit margin of 91.91%, recorded GAAP net profit attributable to the parent company of 121.00 million with a net profit margin of 59.70%, and reported adjusted EPS of 1.76, which was up 13.82% year-over-year; net profit grew 4.39% quarter-on-quarter.

A notable highlight was the company’s resilient earnings conversion relative to the topline, with EBIT of 149.09 million (up 17.09% year-over-year) and a margin structure that remained supportive of high cash generation amid the quarter’s stronger revenue. In the main businesses, Land and Resource Management contributed 109.52 million, while Water Services and Operations contributed 93.56 million; overall revenue grew 17.01% year-over-year, underscoring broad-based demand across the portfolio.

Current Quarter Outlook

Land and Resource Management

The Land and Resource Management segment remains the foundation of Texas Pacific Land’s value proposition, with last quarter’s revenue of 109.52 million and a 53.93% share of the total indicating its central role in earnings formation. Revenue in this business is typically tied to royalty volumes and realized commodity pricing, both of which can support a higher conversion into EBIT when mix favors high-margin royalty streams. Based on the forecast profile for the current quarter—where company-level revenue is projected to rise 15.68% year-over-year and EBIT is projected to rise 13.04% year-over-year—this segment is still expected to provide significant contribution to operating income, although the absolute margin depends on the mix between recurring royalties and episodic items such as lease bonus, easements, and rights-of-way.

Quarter-to-quarter variability can arise from timing effects in lease-related revenue and from changes in the pace of development across acreage where Texas Pacific Land holds royalty interests. The company’s last quarter gross margin of 91.91% and net profit margin of 59.70% provide a baseline of profitability that reflects the high-margin nature of royalty income. In the present quarter, a key determinant of reported earnings will be the balance between sustained royalty production and any non-recurring land-related revenues. If royalty volumes and pricing hold relatively steady, the segment should continue to underpin the EBIT profile and support the forecasted double-digit year-over-year rise in company-level operating income.

Investors should observe how segment mix feeds through to reported EPS, especially in light of the forecasted decline in EPS year-over-year despite upward movements in revenue and EBIT. This tension typically arises when expenses, tax rates, or share count dynamics diverge from topline momentum. While no explicit margin forecast is provided, the last quarter’s high margin structure suggests that even modest changes in mix or costs can exert visible influence on EPS outcomes, making the segment’s contribution and expense discipline an important focus in the print.

Water Services and Operations

Water Services and Operations generated 93.56 million last quarter, representing 46.07% of the total and illustrating how this segment now stands as a meaningful revenue pillar alongside the land-based royalties. The near-term outlook is constructive: company-level revenue grew 17.01% year-over-year in the prior quarter, and total revenue is projected to grow 15.68% year-over-year in the current quarter, which indicates continued activity levels supportive of water sourcing, treatment, recycling, and disposal services. While the water segment generally carries lower structural margins than the royalty business, it offers scale benefits and more direct operational revenue tied to completion intensity and field service demand.

In the present quarter, the key swing factors for this segment are the cadence of completions activity and the adoption of higher-value water solutions. If operational activity stays resilient, water services can contribute steady growth and enhance overall revenue stability. Margin performance will depend on pricing discipline, service mix, and operating leverage across volumes; the last quarter’s company-level margin metrics set a high bar, so relative performance in water will be crucial to understanding the EPS trajectory. The segment’s ability to sustain revenue near last quarter’s 93.56 million level, or expand from that base, is a central piece of the broader thesis behind the forecasted company-level revenue and EBIT growth.

Because water operations can display less quarter-to-quarter volatility than episodic land revenues, they often provide ballast to the company’s consolidated results. In the current quarter, even a modest expansion in water revenue could help offset variability elsewhere, strengthening the predictability of the consolidated topline and reducing reliance on non-recurring items. Observers will look for signals around stable contract volumes, customer activity levels, and operational efficiency, as these tend to translate into more consistent margin conversion within this segment.

Stock Price Drivers This Quarter

The immediate stock price drivers center on whether reported results align with the forecast profile: revenue at 214.00 million (up 15.68% year-over-year), EBIT at 156.00 million (up 13.04% year-over-year), and adjusted EPS at 3.60 (down 30.05% year-over-year). The divergence between positive topline and EBIT growth versus the EPS decline is likely to be the focal point of market interpretation and may reflect shifts in costs, tax rates, or other below-EBIT items that compress earnings per share. If the company demonstrates disciplined expense management and offers clarity around the EPS dynamics, the market may weigh the strong revenue and EBIT trajectory more heavily, particularly given the last quarter’s high gross and net margins.

Last quarter’s 4.39% quarter-on-quarter net profit growth offers a reference point for sequential momentum heading into the print. Any evidence of margin resilience—especially continuity in gross margin near last quarter’s 91.91% and firm net margin conversion—would support the narrative that EPS compression is transitory or tied to specific items, rather than a structural weakening. By contrast, if reported margins soften alongside the EPS decline, the market could infer a broader cost or mix shift that compresses per-share earnings even in the face of rising revenue and operating income.

In practical terms, investors will parse the segment contributions: whether Land and Resource Management maintains its 109.52 million baseline while Water Services and Operations continues to contribute close to 93.56 million or better. Strong segment performance, coupled with stable operational execution, would make the forecasted revenue and EBIT growth more credible and could help mitigate concerns around EPS volatility. The balance between sustained high-margin royalty income and the scalable yet potentially lower-margin water services will likely frame the near-term valuation debate and how the stock reacts to the print.

Analyst Opinions

Bullish views currently dominate, with a recent Buy rating and a 350.00 price target reaffirmed by a major sell-side institution. The supportive stance is consistent with the forecasted double-digit year-over-year growth in both revenue and EBIT, indicating conviction that the company’s consolidated operating profile remains constructive even if EPS dynamics appear more complex this quarter. The bullish thesis emphasizes the stability provided by the core land-based royalty streams and the expanding role of water services, which together can underpin revenue and operating income growth through varying activity cycles.

This perspective also aligns with last quarter’s performance, where revenue rose 17.01% year-over-year and EBIT increased 17.09% year-over-year, reinforcing the view that operational factors and segment execution continue to contribute positively to earnings capacity. From a valuation standpoint, the emphasis on the forecasted 214.00 million in revenue and 156.00 million in EBIT reflects confidence in near-term cash generation and operating leverage, while acknowledging that per-share earnings can be sensitive to below-the-line items or share count changes.

Analysts holding the bullish view will likely focus on whether the forthcoming report provides clarity on the causes of the expected year-over-year EPS decline to 3.60, and whether such factors are transient. If management articulates a credible path to reconciling strong operating trends with EPS outcomes—through cost discipline, capital allocation, or mix optimization—this could sustain positive sentiment. In that scenario, the anticipated revenue and EBIT growth would serve as the bedrock of the investment case, explaining why the Buy rating and the 350.00 target remain in place ahead of the February 18, 2026 Post Market release.