Enterprise Value to FCFF (EV/FCFF)
Free Cash Flow to The Firm (FCFF)
Texas Pacific Land Corp., FCFF 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).
An analysis of the cash flow performance reveals a period of initial contraction followed by a strong recovery and subsequent stabilization. Operating cash flows and Free Cash Flow to the Firm (FCFF) exhibited a high degree of synchronization over the five-year period ending December 31, 2023.
- Cash Provided by Operating Activities
- A significant decline was observed in 2020, with cash provided by operating activities dropping from $342.8 million in 2019 to $207.0 million. This was followed by a consistent recovery trend, culminating in a peak of $447.1 million in 2022, before a slight moderation to $418.3 million in 2023.
- Free Cash Flow to the Firm (FCFF) Trends
- FCFF closely tracked the trajectory of operating cash flows, reaching a period low of $202.0 million in 2020. A robust growth phase followed, with FCFF increasing by approximately 70% between 2020 and 2022 to reach $428.0 million. The 2023 value of $403.3 million indicates that the firm has maintained a cash generation level substantially higher than that of the 2019-2021 period.
- Cash Conversion and Capital Intensity
- The minimal variance between operating cash flow and FCFF across all five years suggests a low-capital-intensity operational model. The difference between these two metrics peaked in 2019 at $32.1 million and reached its lowest point in 2020 at $5.1 million. This pattern demonstrates a high efficiency in converting operating cash into free cash flow available to the firm's providers of capital.
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Interest Paid, Net of Tax
Texas Pacific Land Corp., interest paid, net of tax calculation
US$ 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).
2 2023 Calculation
Interest paid, tax = Interest paid × EITR
= 0 × 21.60% = 0
An analysis of the financial metrics for the period ending December 31, 2019, through December 31, 2023, reveals a total absence of recorded values for interest paid, net of tax. This suggests that the organization operated without reportable interest-bearing debt or incurred no interest expenses throughout the five-year duration.
- Interest Expense Trends
- There are no reported figures for interest paid, net of tax, for any of the fiscal years analyzed. This indicates a lack of interest-related cash outflows across the 2019 to 2023 timeframe.
- Effective Income Tax Rate (EITR) Volatility
- The EITR demonstrated fluctuations over the period, beginning at 20.80% in 2019 and decreasing slightly to 19.90% in 2020. A significant increase to 25.60% occurred in 2021, followed by a correction to 21.50% in 2022 and a relative stabilization at 21.60% in 2023.
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Enterprise Value to FCFF Ratio, Current
Texas Pacific Land Corp., current EV/FCFF calculation, comparison to benchmarks
| Selected Financial Data (US$ in thousands) | |
| Enterprise value (EV) | 29,822,736) |
| Free cash flow to the firm (FCFF) | 403,265) |
| Valuation Ratio | |
| EV/FCFF | 73.95 |
| Benchmarks | |
| EV/FCFF, Competitors1 | |
| Chevron Corp. | 26.40 |
| ConocoPhillips | 22.35 |
| ExxonMobil Holdings Corp. | 28.63 |
| EV/FCFF, Sector | |
| Oil, Gas & Consumable Fuels | 20.14 |
| EV/FCFF, Industry | |
| Energy | 20.07 |
Based on: 10-K (reporting date: 2023-12-31).
1 Click competitor name to see calculations.
If the company EV/FCFF is lower then the EV/FCFF of benchmark then company is relatively undervalued.
Otherwise, if the company EV/FCFF is higher then the EV/FCFF of benchmark then company is relatively overvalued.
Enterprise Value to FCFF Ratio, Historical
Texas Pacific Land Corp., historical EV/FCFF 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) | |
| Free cash flow to the firm (FCFF)2 | 403,265) | 428,043) | 250,701) | 201,951) | 310,698) | |
| Valuation Ratio | ||||||
| EV/FCFF3 | 27.15 | 30.97 | 29.56 | 41.31 | 15.95 | |
| Benchmarks | ||||||
| EV/FCFF, Competitors4 | ||||||
| Chevron Corp. | 14.85 | 8.27 | 13.33 | — | — | |
| ConocoPhillips | 15.38 | 7.43 | 10.72 | — | — | |
| ExxonMobil Holdings Corp. | 12.47 | 7.84 | 10.06 | — | — | |
| EV/FCFF, Sector | ||||||
| Oil, Gas & Consumable Fuels | 13.63 | 7.91 | 11.15 | — | — | |
| EV/FCFF, Industry | ||||||
| Energy | 13.96 | 8.54 | 11.54 | — | — | |
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/FCFF = EV ÷ FCFF
= 10,949,083 ÷ 403,265 = 27.15
4 Click competitor name to see calculations.
The financial trajectory between 2019 and 2023 is characterized by a significant expansion in Enterprise Value (EV) relative to a more moderate growth in Free Cash Flow to the Firm (FCFF). This disparity resulted in a substantial increase in the valuation multiple, which peaked in 2020 before stabilizing at a higher baseline than the 2019 level.
- Enterprise Value Trends
- Enterprise Value exhibited considerable volatility and an overall upward trajectory, starting at 4,956,658 thousand US$ in 2019 and reaching a peak of 13,255,177 thousand US$ in 2022. Although a contraction occurred in 2023, bringing the value to 10,949,083 thousand US$, the final valuation remains significantly higher than the initial 2019 figure.
- Free Cash Flow to the Firm (FCFF) Performance
- FCFF experienced a notable decline in 2020, falling to 201,951 thousand US$ from 310,698 thousand US$ in 2019. A subsequent recovery trend is observed, with cash flows increasing to a peak of 428,043 thousand US$ in 2022 and maintaining a strong position at 403,265 thousand US$ in 2023.
- EV/FCFF Ratio Analysis
- The EV/FCFF ratio shifted from 15.95 in 2019 to a peak of 41.31 in 2020, a spike driven by the concurrent rise in Enterprise Value and the dip in FCFF. In the subsequent years, the ratio normalized and stabilized, recording 29.56 in 2021, 30.97 in 2022, and 27.15 in 2023. This indicates that the market valuation of the firm has shifted to a higher multiple range compared to 2019, reflecting a change in the valuation premium applied to the firm's cash flow generation.
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