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Trinity Capital (TRIN)
NASDAQ:TRIN
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Trinity Capital
(NASDAQ:TRIN)
80Outperform
Positive Factors
Equity Issuance
TRIN benefited from accretive equity issuance and elevated portfolio activity.
Net Asset Value
Net gains on the portfolio and ATM issuance helped drive NAV higher to $13.35 from $13.13.
Negative Factors
Credit Concerns
TRIN's +16% NOI yield is attractive but offset by credit concerns, with losses consuming ~45% of all NOI since its exit of Lucid.
Debt Extinguishment Loss
TRIN repaid its pre-IPO convertible notes in cash, resulting in a ~$0.16 / share realized loss from debt extinguishment.
Non-Accrual Loans
Sun Basket and Formlogic were added to non-accrual this quarter, with Formlogic being the second credit going to N/A within one year of origination.
Trinity Capital (TRIN) vs. S&P 500 (SPY)
Market Cap
$1.01B
Dividend Yield12.66%
Average Volume (3M)525.39K
Price to Earnings (P/E)7.7
Beta (1Y)0.52
Revenue Growth48.54%
EPS Growth6.64%
CountryUS
Employees68
SectorFinancial
Sector Strength81
IndustryAsset Management Services
Share Statistics
EPS (TTM)2.06
Shares Outstanding62,831,104
10 Day Avg. Volume463,143
30 Day Avg. Volume525,395
Financial Highlights & Ratios
PEG Ratio1.16
Price to Book (P/B)N/A
Price to Sales (P/S)4.54
Price to Cash Flow (P/CF)13.80
P/FCF Ratio6.80
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$15.67Price Target Upside-2.73% Downside
Rating ConsensusHold
Number of Analyst Covering3
Trinity Capital Business Overview & Revenue Model
Company DescriptionTrinity Capital (TRIN) is a specialty lending company that provides debt, including loans and equipment financing, to growth-stage companies primarily in the technology, life sciences, and other high-growth industries. The firm focuses on supporting entrepreneurial ventures and offers customized financial solutions to help these companies achieve their business objectives.
How the Company Makes MoneyTrinity Capital generates revenue primarily through interest income from the loans and equipment financings it provides to its portfolio companies. The company earns interest on the capital it lends and may also generate income from origination fees associated with these financial products. Additionally, Trinity Capital may have equity warrants in some of its portfolio companies, which can provide additional revenue through capital gains if these companies experience successful exits, such as through acquisitions or public offerings. The firm's earnings are influenced by its ability to identify suitable investment opportunities, manage credit risk, and maintain effective relationships with its portfolio companies.
Trinity Capital Financial Statement Overview
Summary
Trinity Capital has demonstrated strong revenue and profit growth with impressive margins. However, negative cash flow and high liabilities are areas of concern. The company must improve its cash flow management for long-term sustainability.Income Statement
Trinity Capital has demonstrated strong revenue growth, increasing from $9.39 million in 2022 to $226.73 million in 2024. The gross profit margin for 2024 is 80.8%, indicating efficient cost management. The net profit margin has also improved substantially to 52.3% in 2024, showcasing strong profitability. However, the revenue growth rate has been volatile, with significant fluctuations over the years.78
Positive
Balance Sheet
The company has improved its equity base from $238.75 million in 2020 to $822.98 million in 2024, reflecting strong shareholder support and financial stability. The debt-to-equity ratio has decreased, indicating better leverage management. However, the equity ratio stands at 46.4% for 2024, suggesting moderate reliance on debt financing. While the return on equity is impressive at 14.4% for 2024, indicating good profitability, the high total liabilities remain a concern.70
Positive
Cash Flow
Trinity Capital shows negative free cash flow for consecutive years, with a significant outflow of $316.91 million in 2024. This suggests challenges in generating positive cash flow from operations. The operating cash flow to net income ratio is negative, indicating that earnings are not translating effectively into cash flows. However, the company has managed to secure financing, as seen by the positive financing cash flow.65
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 226.73M | 174.84M | 9.39M | 155.09M | 23.82M | Gross Profit |
| 183.21M | 141.75M | -17.80M | 139.57M | 13.39M | EBIT |
| 169.04M | 129.74M | 108.12M | 132.32M | -6.11M | EBITDA |
| 169.04M | 121.19M | 101.46M | 0.00 | 0.00 | Net Income Common Stockholders |
| 115.60M | 76.89M | -30.38M | 132.32M | -6.11M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 9.63M | 4.76M | 47.92M | 31.68M | 44.66M | Total Assets |
| 1.77B | 1.31B | 1.13B | 937.12M | 559.71M | Total Debt |
| 49.40M | 646.89M | 610.59M | 455.35M | 299.75M | Net Debt |
| 39.77M | 642.13M | 599.98M | 423.66M | 255.09M | Total Liabilities |
| 951.26M | 699.82M | 666.79M | 490.58M | 320.96M | Stockholders Equity |
| 822.98M | 611.16M | 459.65M | 446.53M | 238.75M |
| Cash Flow | Free Cash Flow | |||
| -316.91M | -99.00M | -235.94M | -242.88M | -58.48M | Operating Cash Flow |
| -316.91M | -96.26M | -235.74M | -241.67M | -58.23M | Investing Cash Flow |
| -420.00K | -2.74M | -194.00K | -1.20M | -91.98M | Financing Cash Flow |
| 322.19M | 93.15M | 199.81M | 228.52M | 211.31M |
Trinity Capital Technical Analysis
Positive
16.11
Price Trends
15.71
Positive
14.81
Positive
14.01
Positive
Market Momentum
0.10
Positive
53.06
Neutral
74.59
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TRIN, the sentiment is Positive. The current price of 16.11 is above the 20-day moving average (MA) of 16.04, above the 50-day MA of 15.71, and above the 200-day MA of 14.01, indicating a bullish trend. The MACD of 0.10 indicates Positive momentum. The RSI at 53.06 is Neutral, neither overbought nor oversold. The STOCH value of 74.59 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TRIN.
Trinity Capital Peers Comparison
Overall Rating
UnderperformOutperform
Sector (64)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
80 Outperform | $1.01B | 7.69 | 16.12% | 12.66% | 48.54% | 6.64% | |
74 Outperform | $5.13B | 10.09 | 19.26% | 5.13% | 51.80% | 12.05% | |
72 Outperform | $1.45B | 22.53 | 3.96% | 14.61% | -28.04% | -69.52% | |
67 Neutral | $3.36B | 12.11 | 13.71% | 8.24% | -1.49% | -29.48% | |
64 Neutral | $14.53B | 10.25 | 8.67% | 4.22% | 16.51% | -12.20% | |
60 Neutral | $286.98M | 8.66 | 9.26% | 19.58% | 22.53% | ― | |
58 Neutral | $681.47M | ― | -8.57% | 16.98% | 8.24% | -207.60% |
* Financial Sector Average
Performance Comparison
TRIN
Trinity Capital
16.06
3.05
23.44%
HTGC
Hercules Capital
19.59
3.07
18.58%
MAIN
Main Street Capital
57.47
14.11
32.54%
TCPC
BlackRock TCP Capital
8.01
-0.71
-8.14%
GSBD
Goldman Sachs BDC
12.33
-1.28
-9.40%
TPVG
TriplePoint Venture Growth
7.13
-0.80
-10.09%
Trinity Capital Earnings Call Summary
Earnings Call Date: Feb 26, 2025 | % Change Since: 2.35% | Next Earnings Date: May 7, 2025
Earnings Call Sentiment Positive
Trinity Capital demonstrated strong financial growth with record net investment income and fundings, alongside successful expansion into new markets. However, challenges such as maintaining low nonaccruals and managing debt obligations were noted. Overall, the highlights significantly outweigh the lowlights, indicating a positive performance outlook.Highlights
Record Net Investment Income
Trinity Capital achieved a record net investment income of $116 million for the year, translating to $2.20 per share.
Significant Growth in Fundings
The company reached $1.2 billion in total fundings, marking a substantial increase in their financial activities.
Expansion into Europe
Trinity Capital expanded its lending platform into Europe by establishing a London-based team.
Strong Fourth Quarter Performance
Net investment income for Q4 was $35 million, a 38% increase compared to the same period last year.
Increase in Net Asset Value
Net asset value grew to $823 million, a 9% increase from the previous quarter.
Debt Obligations Management
All debt obligations due until August 2026 have been settled, providing a more stable financial outlook.
Strong Portfolio Performance
99.2% of the portfolio is performing, and the average credit rating stands at 2.9 out of 5.
Lowlights
Nonaccruals Remained Unchanged
The number of portfolio companies on nonaccrual remained at five, with a total fair value of nonaccruals at $12.7 million.
Convertible Debt Impact
The early repayment of convertible debt will have a $0.27 per share impact on NAV in Q1 2025.
Industry Concerns in FinTech
Questions were raised about fintech companies' dependency on bank partnerships, highlighting potential risks.
Company Guidance
During Trinity Capital's fourth quarter and full-year 2024 earnings call, the company reported significant financial milestones and provided forward-looking guidance. Key metrics included a record $116 million in net investment income, equivalent to $2.20 per share, and $1.2 billion in fundings for the year. The fourth quarter alone saw a net investment income of $35 million, marking a 38% increase from the previous year, with net asset value rising to $823 million, up 9% from the prior quarter. The company also highlighted a platform AUM surpassing $2 billion and declared a fourth-quarter cash dividend of $0.51 per share. Trinity Capital's strategic initiatives, such as the expansion into Europe and the launch of new business verticals like sponsor finance and asset-backed lending, were emphasized as drivers of growth and diversification. The company maintained a low net leverage ratio of 1.08 times and reported strong portfolio credit quality, with a 99.2% performing portfolio on a fair value basis. Looking forward, Trinity Capital aims to continue leveraging its internally managed structure to align with shareholders and capitalize on new investment opportunities.Trinity Capital Corporate Events
Executive/Board Changes
Trinity Capital Updates Executive Employment Agreements
Neutral
Mar 20, 2025
On March 14, 2025, Trinity Capital Inc. amended and restated employment letters with key executives, including Kyle Brown, Steven L. Brown, Gerald Harder, and Michael Testa. These letters outline employment terms, including base salaries, bonuses, and benefits, and specify conditions for termination and severance. Additionally, a retention bonus agreement was made with Kyle Brown, and non-statutory stock options were granted to certain executives, contingent on specific performance and vesting conditions.
DividendsBusiness Operations and StrategyFinancial Disclosures
Trinity Capital Reports Strong 2024 Financial Results
Positive
Feb 26, 2025
On February 26, 2025, Trinity Capital Inc. announced its financial results for the fourth quarter and full year of 2024, reporting a 31% year-over-year growth in total investment income. The company achieved record net investment income of $116 million for the year and $35 million for the fourth quarter, with a return on average equity of 17.4% in Q4. The company’s total assets under management increased by 40.6% to $2.0 billion, and it continued its streak of 20 consecutive quarters of consistent or increased dividends. These results reflect Trinity Capital’s strategic initiatives and strong portfolio management, positioning it for continued growth and shareholder value creation.
Private Placements and FinancingBusiness Operations and StrategyFinancial Disclosures
Trinity Capital Achieves Record $1.2 Billion Fundings
Positive
Jan 13, 2025
Trinity Capital Inc. reported record investment fundings of $1.2 billion for 2024, reflecting a robust performance driven by its unique business structure and value creation for investors. The company’s fourth-quarter activities included $297 million in investments and $411 million in new commitments, indicating strong growth and strategic positioning in the alternative asset management industry.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.