LB

LandBridge owns or manages more than 315,000 surface acres in and around the Delaware Basin of the Permian, monetizing them through surface-use agreements, royalties and resource sales rather than operating wells itself. The model is asset-light and extraordinarily profitable: FY2025 revenue jumped to $199M (+81.1%), operating income surged to $119M (+817.7%) for a 59.5% operating margin, and operating cash flow reached $126M (+86.7%) against capital expenditures of just $4.24M. Net income rose to $30.1M (+489.6%) and diluted EPS to $0.94 (+1242.9%). The land-economics flywheel — adding new uses like solar, power storage, data centers and crypto mining on top of oil-and-gas royalties — gives a long runway.

The problem is price. At $63.95 the stock trades at 68.0x trailing EPS, a multiple that already capitalizes years of continued hyper-growth. Profitability metrics temper the enthusiasm: despite the huge operating margin, net margin is only 15.1% and return on equity just 8.9%, because the capital structure carries meaningful debt. Long-term debt is $560M (+46.9%) against $340M of equity, a 1.68x liabilities/equity ratio, with only $30.7M of cash on hand (down 17.0%). The dividend was cut sharply, with dividends paid of $63.7M (-64.3%).