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Tetragon Financial Group LTD (NL:TFG)
:TFG
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Tetragon Financial
(TFG)
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Rating:71Outperform
Price Target:―
Tetragon Financial's stock is characterized by strong financial stability and undervaluation potential. The company's robust balance sheet and low P/E ratio provide a solid foundation. Positive earnings call sentiment further boosts confidence, though technical indicators suggest cautious optimism. Operational efficiency and cash flow improvements are necessary to sustain growth. The overall outlook remains positive, driven by strong returns and asset management performance.
Tetragon Financial (TFG) vs. iShares MSCI Netherlands ETF (EWN)
Market Cap
$2.64B
Dividend Yield2.89%
Average Volume (3M)18.72K
Price to Earnings (P/E)2.3
Beta (1Y)0.24
Revenue Growth328.05%
EPS Growth412.44%
CountryNL
Employees530
SectorFinancial
Sector Strength70
IndustryAsset Management
Share Statistics
EPS (TTM)3.90
Shares Outstanding139,694,470
10 Day Avg. Volume15,312
30 Day Avg. Volume18,722
Financial Highlights & Ratios
PEG Ratio0.02
Price to Book (P/B)0.38
Price to Sales (P/S)2.29
P/FCF Ratio25.35
Enterprise Value/Market Cap0.71
Enterprise Value/Revenue1.89
Enterprise Value/Gross Profit2.13
Enterprise Value/Ebitda5.60
Forecast
1Y Price TargetN/A
Price Target UpsideN/A
Rating ConsensusN/A
Number of Analyst Covering0
Tetragon Financial Business Overview & Revenue Model
Company DescriptionTetragon Financial Group Limited is a close ended feeder fund launched and managed by Tetragon Financial Management LP. The fund invests its entire corpus in Tetragon Financial Group Master Fund Limited. It was formerly known as Tetragon Credit Income Fund Limited. Tetragon Financial Group Limited was formed on June 23, 2005 and is domiciled in the Guernsey, Channel Islands.
How the Company Makes MoneyTetragon Financial Group makes money through a combination of capital appreciation and income generation from its diversified investment portfolio. The company earns revenue primarily from dividends, interest, and capital gains on its investments in public and private equities, loans, real estate, and infrastructure. TFG also benefits from management and performance fees generated by its asset management operations, where it manages funds and investment vehicles for institutional and retail clients. Significant partnerships with financial institutions and strategic investments in asset management businesses, such as TFG Asset Management, enhance its earning potential and contribute to its overall financial performance.
Tetragon Financial Earnings Call Summary
Earnings Call Date:Mar 05, 2025
(Q2-2025)
| % Change Since: |
Next Earnings Date:Jul 29, 2025
Earnings Call Sentiment Positive
The earnings call reflects a strong performance in key metrics such as NAV growth and ROE, driven by substantial gains in investments like Equitix and private equity. However, challenges persist in segments like real estate and bank loans, along with a high leverage position. The positive aspects, especially the gains from strategic investments, largely outweigh the negatives, indicating a robust financial outlook.Q2-2025 Updates
Positive Updates
Strong NAV Per Share Growth
Tetragon achieved a fully diluted NAV per share of $38.74 as at June 30, 2025, representing a NAV per share total return of 10% for the first half of 2025. Since its IPO, Tetragon has achieved an annualized NAV per share total return of 11%.
Impressive ROE Performance
The return on equity (ROE) for the first half of 2025 was a positive 12.2%, significantly above the target range of 5% to 7.5% for a 6-month period.
Significant Gains from Equitix
Tetragon's investment in Equitix generated a profit of $409 million during the first half of 2025, driven by a higher valuation and foreign exchange gains.
Beneficial Transaction with Hunter Point Capital
Hunter Point Capital acquired a 16.1% stake in Equitix, implying an enterprise value of GBP 1.3 billion for the business. Tetragon will continue to hold a 66.4% stake post-transaction.
Positive Performance in Private Equity and Venture Capital
Gains of $189 million were generated in this segment, driven by investments in Ripple Labs and an Australian gold mining company.
Negative Updates
Losses in Bank Loans and CLOs
There was a loss of $24 million in bank loan investments, primarily held through CLOs, due to realized and unrealized losses in older vintage loan exposures.
Challenges in Real Estate Investments
The real estate segment recorded a net loss of $8.5 million, with continued losses stemming from U.S.-focused funds due to exposure to commercial, residential, and hotel sectors.
Reduction in LCM AUM
LCM's assets under management decreased by 12% to $7.7 billion due to amortization of existing deals, resulting in a loss of $35.3 million.
High Level of Leverage
Tetragon's net cash position at the end of the first half was negative $546 million, indicating a significant level of leverage.
Company Guidance
The guidance provided during the Tetragon 2025 Half Yearly Investor Call was comprehensive, focusing on several key financial metrics. The company reported a fully diluted NAV per share of $38.74 as of June 30, 2025, with a NAV per share total return of 10% for the first half of the year. Since its IPO in 2007, Tetragon has achieved an annualized NAV per share total return of 11%. The return on equity (ROE) for the first half of 2025 was 12.2%, exceeding the target range of 5% to 7.5% for a six-month period. The average annual ROE since the IPO is 11.8%, within the target range of 10% to 15%. Tetragon declared a dividend of $0.11 for the second quarter, totaling $0.22 year-to-date, with the last four quarters' dividend representing a yield of approximately 2.7% based on a quarter-end share price of $16.15. The NAV bridge highlighted an increase in NAV per share from $35.43 to $38.74, driven by investment income and offset by operating expenses and fees. The investment in Equitix yielded a $409 million profit, contributing significantly to these results.Tetragon Financial Financial Statement Overview
Summary
Tetragon Financial exhibits a mixed financial performance with strong equity backing and improved profitability. The balance sheet shows excellent financial stability with no debt and a high equity ratio. However, there are concerns about operational efficiency due to negative EBIT and cash generation lagging behind net income, though the cash flow recovery is promising.Income Statement
Tetragon Financial has shown significant volatility in its revenue and profitability over the years. The latest annual data shows a strong recovery in Total Revenue with a 51.8% increase from the previous year, leading to a Net Profit Margin of 96.5%, which is impressive. However, the significant negative EBIT in the latest year raises concerns about operational efficiency. Overall, the company has demonstrated resilience with fluctuating yet improving profitability.65
Positive
Balance Sheet
The company maintains a strong Balance Sheet with Zero Total Debt in the latest year, providing a Debt-to-Equity Ratio of 0, which indicates excellent financial stability. The Equity Ratio remains high at 89.0%, suggesting a solid asset base supported by equity. Return on Equity has improved significantly to 11.1%, indicating effective use of equity to generate profits. Overall, the balance sheet reflects strong financial health and low leverage risk.80
Positive
Cash Flow
The Cash Flow statement reveals a positive turnaround with Free Cash Flow reaching $47.1 million, demonstrating a significant recovery from previous negative figures. The Operating Cash Flow to Net Income ratio of 0.13 suggests that cash generation from operations is still lagging behind net income, which is a concern. However, the positive Free Cash Flow trend is a positive indicator of improving cash management and liquidity.70
Positive
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 988.80M | 520.70M | 240.40M | 61.70M | 611.00M | 306.40M |
| Gross Profit | 879.20M | 390.10M | 182.40M | -5.90M | 611.00M | 199.30M |
| EBITDA | 333.90M | 377.30M | 0.00 | 0.00 | 0.00 | 0.00 |
| Net Income | 697.50M | 352.20M | 141.10M | -32.10M | 418.20M | 171.10M |
Balance Sheet | ||||||
| Total Assets | 4.15B | 3.56B | 3.11B | 2.97B | 3.06B | 2.67B |
| Cash, Cash Equivalents and Short-Term Investments | 3.00M | 30.50M | 23.10M | 21.70M | 198.80M | 191.60M |
| Total Debt | 350.00M | 300.00M | 250.00M | 115.00M | 75.00M | 100.00M |
| Total Liabilities | 606.50M | 391.90M | 280.40M | 215.70M | 187.10M | 194.11M |
| Stockholders Equity | 3.55B | 3.17B | 2.83B | 2.76B | 2.88B | 2.47B |
Cash Flow | ||||||
| Free Cash Flow | -123.60M | 47.10M | -26.00M | -111.00M | 64.30M | 208.50M |
| Operating Cash Flow | -123.60M | 47.10M | -26.00M | -111.00M | 64.30M | 208.50M |
| Investing Cash Flow | 120.30M | 113.60M | 119.60M | -28.60M | 164.30M | 292.20M |
| Financing Cash Flow | -700.00K | -39.70M | 27.40M | -66.10M | -57.10M | -150.40M |
Tetragon Financial Technical Analysis
Positive
19.10
Price Trends
18.64
Positive
17.53
Positive
16.01
Positive
Market Momentum
0.09
Positive
54.94
Neutral
89.09
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For NL:TFG, the sentiment is Positive. The current price of 19.1 is above the 20-day moving average (MA) of 19.08, above the 50-day MA of 18.64, and above the 200-day MA of 16.01, indicating a bullish trend. The MACD of 0.09 indicates Positive momentum. The RSI at 54.94 is Neutral, neither overbought nor oversold. The STOCH value of 89.09 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for NL:TFG.
Tetragon Financial Peers Comparison
UnderperformOutperform
Sector (68)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
81 Outperform | €12.28B | 7.09 | 11.85% | 2.10% | 2.01% | 79.48% | |
79 Outperform | €244.36M | 6.94 | 13.24% | 9.21% | -42.89% | -21.25% | |
72 Outperform | €15.00B | 19.89 | ― | 3.05% | 20.37% | 54.24% | |
71 Outperform | $2.64B | 2.29 | 21.90% | 2.89% | 328.05% | 412.44% | |
68 Neutral | €15.23B | 12.59 | 6.47% | 6.01% | -15.54% | 10.53% | |
68 Neutral | $18.00B | 11.42 | 9.92% | 3.81% | 9.73% | 1.22% | |
59 Neutral | €3.71B | ― | -7.45% | 2.11% | 8.64% | -304.46% |
* Financial Sector Average
NL:TFG
Tetragon Financial
19.10
7.02
58.13%
NL:HAL
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NL:NN
NN Group N.V.
59.54
16.30
37.71%
NL:VTA
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6.72
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36.67%
NL:ALLFG
Allfunds Group plc
6.35
0.79
14.22%
NL:CVC
CVC Capital Partners plc
15.01
-4.09
-21.41%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
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.