B. Riley has maintained its Buy rating for Trinity Capital (TRIN, Financial), setting a price target of $16, following a recent shift in coverage responsibilities. The firm notes that while most portfolio credit trends are stable and dividend coverage appears solid, factors such as narrower spreads, reduced prepayment activity, and lower expectations for origination are slightly impacting short-term earnings projections.
Despite these challenges, Trinity Capital's distinct origination strategies, favorable equity returns, and consistent-to-improving portfolio metrics support B. Riley's positive outlook on the stock. The firm also identifies Trinity Capital as one of its top business development company (BDC) picks, alongside others, based on its robust fundamentals.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 8 analysts, the average target price for Trinity Capital Inc (TRIN, Financial) is $16.00 with a high estimate of $17.00 and a low estimate of $13.00. The average target implies an upside of 8.11% from the current price of $14.80. More detailed estimate data can be found on the Trinity Capital Inc (TRIN) Forecast page.
Based on the consensus recommendation from 8 brokerage firms, Trinity Capital Inc's (TRIN, Financial) average brokerage recommendation is currently 1.9, indicating "Outperform" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for Trinity Capital Inc (TRIN, Financial) in one year is $23.96, suggesting a upside of 61.89% from the current price of $14.8. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the Trinity Capital Inc (TRIN) Summary page.
TRIN Key Business Developments
Release Date: May 07, 2025
- Net Investment Income: $32.4 million, a 29% increase versus Q1 of last year.
- Net Asset Value (NAV): $833 million, up from $823 million as of December 31, 2024.
- Platform Assets Under Management (AUM): Over $2.1 billion.
- Total Investment Income: $65 million, a 30% increase over the same period in 2024.
- Effective Yield on Portfolio: 15.3%.
- Core Yield: 14.1%.
- Dividend: $0.51 per share, marking the 21st consecutive quarter of consistent or increased regular dividend.
- Net Investment Income Per Share: $0.52 per basic share.
- Estimated Undistributed Taxable Income: Approximately $67 million or $1.04 per share.
- Return on Average Equity (ROAE): 15.5% based on net investment income over average equity.
- Return on Average Assets (ROAA): 7.1% based on net investment income over average total assets.
- Net Leverage Ratio: 1.15 times as of March 31, 2025.
- Nonaccruals: Less than 1% of the portfolio at fair value.
- Investment-Grade Rating: Baa3 with a stable outlook from Moody's.
- Unfunded Commitments: $623 million as of the end of Q1.
- Portfolio Composition: 75% secured loans, 19% equipment financing, 4% equity, 2% warrants.
- Largest Industry Exposure: Finance and insurance, representing 16.9% of the portfolio at cost.
- Second Largest Industry Exposure: Medical devices, representing 12.3% of the portfolio at cost.
- Nonaccrual Credits Fair Value: Approximately $15.2 million, representing 0.9% of the total debt portfolio.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Trinity Capital Inc (TRIN, Financial) reported a 29% increase in net investment income, reaching $32.4 million compared to Q1 of the previous year.
- The company's net asset value (NAV) grew to a record $833 million, with platform assets under management (AUM) increasing to over $2.1 billion.
- Trinity Capital Inc (TRIN) maintained strong credit quality, with nonaccruals representing less than 1% of the portfolio at fair value.
- The company paid a first-quarter cash dividend of $0.51 per share, marking the 21st consecutive quarter of consistent or increased regular dividends.
- Trinity Capital Inc (TRIN) received an investment-grade rating from Moody's, which is expected to open access to cheaper capital and a new pool of investors.
Negative Points
- The effective yield on the portfolio declined due to lower fee income from early debt repayments.
- Net investment income per share decreased compared to the same period in the prior year, with a narrow margin versus the dividend payout.
- The decrease in NAV per share was primarily driven by the impact of the early retirement of convertible notes.
- Commitments were at a slower pace than usual, attributed to a defensive stance in response to macroeconomic conditions.
- The company experienced a decrease in interest income, attributed to the effects of rate cuts and a decrease in payoffs.
