LandBridge Company LLC (LB): A Bull Case Theory

We came crossed a bullish thesis connected LandBridge Company LLC connected 310 Value’s Newsletter’s Substack by 310 Value. In this article, we volition summarize the bulls’ thesis on LB. LandBridge Company LLC's share was trading astatine $55.48 as of February 4th. LB’s trailing and forward P/E were 61.33 and 21.60 respectively according to Yahoo Finance.

LandBridge Company LLC, unneurotic with its subsidiaries, owns and manages onshore and resources to enactment and heighten lipid and earthy state improvement successful the United States. LB has emerged as a unsocial concern opportunity, with its existent worth rooted successful pore abstraction ownership alternatively than the wide discussed Datacenter Thesis. While marketplace sentiment has precocious fixated connected imaginable AI datacenters in the Permian Basin—driving utmost banal volatility from the mid-$40s to the mid-$80s—LandBridge’s core business remains highly resilient and undervalued.

The institution generates 69% of its gross from aboveground usage royalties, chiefly done providing pore space utilized by its sister company, WaterBridge, portion 31% of gross comes from assets income and 7% from lipid and state royalties. Unlike mineral royalties, which are finite and volatile, land-based royalties from produced h2o disposal are long-lasting, location-specific, and progressively captious arsenic h2o cuts successful the Delaware Basin rise. LandBridge currently handles 1.5 cardinal barrels per time (mmbpd) of produced h2o and controls an incremental 6.9 mmbpd of pore space, positioning it to seizure important aboriginal growth.

Recent acquisitions, including the 1918 Ranch, grow contiguous pore abstraction successful strategical locations, creating travel assurance for WaterBridge and a blocking presumption for competitors, enhancing some pricing powerfulness and strategical optionality. Trading astatine 19.1x 2026E EBITDA, LandBridge is materially undervalued relative to slower-growing peers similar Texas Pacific Land Corp., which trades astatine 28.7x, despite LandBridge’s faster maturation trajectory.

The Datacenter Thesis, portion perchance transformative, is secondary to the intrinsic, revenue-generating worth of pore space, efficaciously providing investors with optional upside. With robust downside extortion from its royalties, important maturation potential, and precocious abbreviated interest, LandBridge presents a compelling risk/reward opportunity, wherever incremental quality on datacenters could enactment arsenic a almighty catalyst for banal appreciation.