LandBridge is Monday's Investor's Business Daily pick among the IBD 50 Growth Stocks To Watch list. LandBridge stock is nearing a buy point from a double-bottom base. The oil-and-gas land management company is a recent initial public offering and forecasts show robust profit growth after a loss in 2024.
Houston-based LandBridge shows a key trait of a winning growth stock found in IBD's methodology. Analyst forecasts show accelerating profit growth and rising sales for the company. The stock climbed 1.4% in midday trading Monday in lighter-than-average volume after a 7.6% jump Friday.
LandBridge actively manages land and resources used in energy and industrial development. It owns more than 273,000 acres of oil and natural gas development land in the Permian Basin in West Texas and southeastern New Mexico. Further, it owns property that reuses water and solid waste as well as solar and power storage developments.
LandBridge stock ranks No. 3 out of 54 stocks in IBD's Oil & Gas-U.S. Exploration & Production group. The group has moved up to the 32nd spot out of 197 industry groups IBD tracks from No. 50 four weeks ago.
In addition, the group holds a robust Relative Strength Rating of A on a scale of A+ to E, which measure the group's relative performance over the last six months.
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LandBridge Stock Nears Buy Point
LandBridge stock started trading on June 28, at an IPO price of $17 per share.
The stock is nearing the 76.22 buy point of an early-stage double-bottom base, according to MarketSurge pattern recognition. Investors should be aware that newer issues can be more volatile. Therefore, risk management, such as cutting losses at 7%, is crucial.
But the stock market is still in a correction for now and investors should be cautious, but also prepared. Be sure to read IBD's The Big Picture column for IBD's current market analysis.
Shares reclaimed their 50-day moving average in Friday's pop. Shares have gained around 13% so far this year while the S&P 500 has lost around 4%.
The land management stock holds a best-possible 99 RS Rating, as it has outperformed 99% of stocks in the IBD database over the last 12 months.
Mutual funds are also discovering LandBridge stock, with 114 owning shares in December up from 83 in September.
Energy Play's Profit Looks To Explode
On March 5, the land management company reported fourth-quarter sales of $36.5 million, which missed FactSet estimates. But its fourth-quarter revenue growth accelerated to 109% from 19% and 60% over the last two quarters.
It's fourth-quarter net income climbed to $8.2 million from $2.5 million a year ago.
"In 2024, we tripled the size of our land holdings, delivered high-double-digit revenue growth year-over-year, and demonstrated our ability to deliver industry-leading adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) and free cash flow margins," LandBridge Chief Executive Jason Long said in the earnings release.
LandBridge reaffirmed its full-year 2025 EBITDA outlook of $170 million to $190 million, which is a measure of profitability. And its profit margins are improving.
Analysts' full-year 2025 projections call for $1.70 in per-share earnings after a 57-cent loss per share in 2024. LandBridge's profits are seen rising to $2.11 per-share in 2026.
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