LandBridge Company LLC (LB): A Bull Case Theory

We came across a bullish thesis on LandBridge Company LLC on 310 Value’s Newsletter’s Substack by 310 Value. In this article, we will summarize the bulls’ thesis on LB. LandBridge Company LLC's share was trading at $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, together with its subsidiaries, owns and manages land and resources to support and enhance oil and natural gas development in the United States. LB has emerged as a unique investment opportunity, with its true value rooted in pore space ownership rather than the widely discussed Datacenter Thesis. While market sentiment has recently fixated on potential AI datacenters in the Permian Basin—driving extreme stock volatility from the mid-$40s to the mid-$80s—LandBridge’s core business remains highly resilient and undervalued.

The company generates 69% of its revenue from surface use royalties, primarily through providing pore space utilized by its sister company, WaterBridge, while 31% of revenue comes from resource sales and 7% from oil and gas royalties. Unlike mineral royalties, which are finite and volatile, land-based royalties from produced water disposal are long-lasting, location-specific, and increasingly critical as water cuts in the Delaware Basin rise. LandBridge currently handles 1.5 million barrels per day (mmbpd) of produced water and controls an incremental 6.9 mmbpd of pore space, positioning it to capture significant future growth.

Recent acquisitions, including the 1918 Ranch, expand contiguous pore space in strategic locations, creating flow assurance for WaterBridge and a blocking position for competitors, enhancing both pricing power and strategic optionality. Trading at 19.1x 2026E EBITDA, LandBridge is materially undervalued relative to slower-growing peers like Texas Pacific Land Corp., which trades at 28.7x, despite LandBridge’s faster growth trajectory.

The Datacenter Thesis, while potentially transformative, is secondary to the intrinsic, revenue-generating value of pore space, effectively providing investors with optional upside. With robust downside protection from its royalties, substantial growth potential, and high short interest, LandBridge presents a compelling risk/reward opportunity, where incremental news on datacenters could act as a powerful catalyst for stock appreciation.

Previously, we covered a bullish thesis on LandBridge Company LLC (LB) by FJ Research in May 2025, which highlighted the company’s surface royalties, water infrastructure, AI data center opportunities, and strategic acreage acquisitions. LB’s stock price has depreciated by approximately 19.73% since our coverage. 310 Value shares a similar perspective but emphasizes pore space royalties as the core driver of long-term growth.

LandBridge Company LLC is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 19 hedge fund portfolios held LB at the end of the third quarter which was 19 in the previous quarter. While we acknowledge the potential of LB as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

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Disclosure: None.