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Trinity Capital (TRIN)
NASDAQ:TRIN

Trinity Capital (TRIN) AI Stock Analysis

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Trinity Capital

(NASDAQ:TRIN)

Rating:72Outperform
Price Target:
$16.00
â–²(12.68%Upside)
Trinity Capital's overall stock score reflects strong valuation due to a low P/E ratio and high dividend yield, supported by solid financial performance. However, negative cash flow and technical indicators suggest caution. The positive sentiment from the latest earnings call reinforces the stock's potential, offsetting some of the financial challenges.
Positive Factors
Equity Issuance
TRIN benefited from accretive equity issuance and elevated portfolio activity.
Fee Income
Fee income from the JV improved to $0.8 million, reflecting potential growth in fee-based revenue.
Negative Factors
Convertible Notes
TRIN repaid its pre-IPO convertible notes in cash, resulting in a ~$0.16 per share realized loss from debt extinguishment.
Credit Concerns
TRIN's attractive +16% NOI yield is offset by credit concerns, where losses have consumed ~45% of all NOI since its exit of Lucid.
Non-Accrual Loans
Sun Basket and Formlogic were added to non-accrual this quarter, indicating potential credit risk.

Trinity Capital (TRIN) vs. SPDR S&P 500 ETF (SPY)

Trinity Capital Business Overview & Revenue Model

Company DescriptionTrinity Capital Inc. is a business development company. It is a venture capital firm specializing in venture debt to growth stage companies looking for loans and/or equipment financing. Trinity Capital Inc. was founded in 2019 is based in Phoenix, Arizona with additional offices in Lutherville-Timonium, Maryland, San Diego, California and Austin, Texas.
How the Company Makes MoneyTrinity Capital makes money by providing capital in the form of debt financing to growth-stage companies. The company generates revenue through the interest and fees charged on these loans and equipment financings. Trinity Capital targets venture capital-backed companies that require financial support to fuel their expansion and development. The company's key revenue streams include interest income from loan agreements, origination fees associated with new financings, and potential equity participation through warrants or other equity-linked instruments. Additionally, Trinity Capital's expertise in tailoring solutions to meet the specific needs of its clients allows it to maintain strong relationships and partnerships with venture capital firms, which can contribute to a steady pipeline of potential clients and revenue opportunities.

Trinity Capital Earnings Call Summary

Earnings Call Date:May 07, 2025
(Q1-2025)
|
% Change Since: 4.41%|
Next Earnings Date:Aug 06, 2025
Earnings Call Sentiment Positive
The earnings call highlighted strong financial performance, with significant increases in net investment income and net asset value, as well as a robust credit quality and consistent dividend. However, it also noted a decrease in NAV per share, lower effective yield, reduced investment commitments, and narrow dividend coverage. The positive outweighs the negative, but there are areas of concern.
Q1-2025 Updates
Positive Updates
Increase in Net Investment Income
Trinity Capital delivered $32.4 million of net investment income, marking a 29% increase compared to Q1 of last year.
Record Net Asset Value
Trinity Capital's net asset value grew to a record $833 million.
Platform AUM Growth
Platform assets under management increased to more than $2.1 billion.
Strong Credit Quality
Credit quality remained robust with non-accruals representing less than 1% of the portfolio at fair value.
Consistent Dividend
Trinity Capital paid a first quarter cash dividend of $0.51 per share, marking the 21st consecutive quarter of a consistent or increased regular dividend.
Investment Grade Rating
Moody's assigned Trinity Capital an investment grade rating, opening access to cheaper capital and new investors.
Strong Portfolio Performance
Portfolio companies collectively raised more than $900 million of equity in Q1.
Negative Updates
Decrease in NAV Per Share
The net asset value per share decreased from $13.35 to $13.05, driven by the early retirement of convertible notes.
Lower Effective Yield
The effective yield dropped to 15.3% from the previous quarter, primarily due to lower fee income from early debt repayments.
Decrease in Investment Commitments
Commitments were at their slowest pace in a while due to macroeconomic conditions and a strategic focus on existing portfolio management.
Narrow Dividend Coverage
Net investment income per share represented 102% coverage of the quarterly distribution, showing a narrow margin over the dividend payout.
Company Guidance
In the Trinity Capital's First Quarter 2025 Earnings Conference Call, the company reported a net investment income of $32.4 million, marking a 29% increase from the same period last year, and a net asset value (NAV) reaching a record $833 million. The platform's assets under management (AUM) rose to over $2.1 billion, while the effective yield on the portfolio was 15.3%, with a core yield of 14.1%. Trinity Capital maintained strong credit quality, with non-accruals representing less than 1% of the portfolio at fair value. They distributed a cash dividend of $0.51 per share, continuing their streak of 21 consecutive quarters of consistent or increased dividends. The company also addressed macroeconomic concerns, such as tariffs, and emphasized their commitment to credit quality and portfolio management. They highlighted their diversified portfolio across five business verticals and their internally managed structure, aligning management and shareholders' interests. Moody’s assigned them an investment-grade rating, which is expected to enhance access to cheaper capital. The company ended the quarter with $623 million in unfunded commitments, positioning them for continued growth in 2025.

Trinity Capital Financial Statement Overview

Summary
Trinity Capital shows strong revenue growth and profitability, with an impressive net profit margin of 52.3%. The balance sheet reflects improved equity and reduced leverage, but high liabilities and negative cash flow pose challenges. Despite negative free cash flow, the company has secured financing, suggesting potential for future growth if cash flow management improves.
Income Statement
78
Positive
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.
Balance Sheet
70
Positive
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.
Cash Flow
65
Positive
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.
BreakdownTTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue233.07M226.73M174.84M9.39M155.09M23.82M
Gross Profit200.95M183.21M141.75M-17.80M139.57M13.39M
EBITDA135.44M177.54M121.19M101.46M0.000.00
Net Income134.09M115.60M76.89M-30.38M132.32M-6.11M
Balance Sheet
Total Assets1.86B1.77B1.31B1.13B937.12M559.71M
Cash, Cash Equivalents and Short-Term Investments8.39M9.63M4.76M47.92M31.68M44.66M
Total Debt0.00877.67M646.89M610.59M455.35M299.75M
Total Liabilities1.02B951.26M699.82M666.79M490.58M320.96M
Stockholders Equity833.39M822.98M611.16M459.65M446.53M238.75M
Cash Flow
Free Cash Flow-250.71M-317.33M-99.00M-235.94M-242.88M-58.48M
Operating Cash Flow-250.32M-316.91M-96.26M-235.74M-241.67M-58.23M
Investing Cash Flow29.56M-420.00K-2.74M-194.00K-1.20M-91.98M
Financing Cash Flow295.76M322.19M93.15M199.81M228.52M211.31M

Trinity Capital Technical Analysis

Technical Analysis Sentiment
Positive
Last Price14.20
Price Trends
50DMA
13.98
Positive
100DMA
14.30
Negative
200DMA
13.62
Positive
Market Momentum
MACD
<0.01
Negative
RSI
57.33
Neutral
STOCH
41.92
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 14.2 is above the 20-day moving average (MA) of 13.94, above the 50-day MA of 13.98, and above the 200-day MA of 13.62, indicating a bullish trend. The MACD of <0.01 indicates Negative momentum. The RSI at 57.33 is Neutral, neither overbought nor oversold. The STOCH value of 41.92 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 (67)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
77
Outperform
$1.24B15.358.52%11.36%13.86%-29.53%
72
Outperform
$918.04M6.4817.56%14.37%46.14%34.91%
71
Outperform
$878.33M10.008.86%10.19%14.33%25.35%
70
Outperform
$1.04B11.657.59%11.76%93.63%24.41%
67
Neutral
$16.84B11.729.71%3.76%11.61%-9.60%
66
Neutral
$982.76M8.679.87%11.88%12.24%-3.21%
65
Neutral
$1.15B10.738.11%12.05%-3.55%-20.43%
* Financial Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
TRIN
Trinity Capital
14.20
1.92
15.64%
CSWC
Capital Southwest
22.53
-1.43
-5.97%
NMFC
New Mountain Finance
10.62
-0.35
-3.19%
PFLT
Pennantpark $
10.46
-0.06
-0.57%
SLRC
SLR Investment Corp.
16.10
1.56
10.73%
BCSF
Bain Capital Specialty Finance
15.15
0.32
2.16%

Trinity Capital Corporate Events

Private Placements and FinancingBusiness Operations and Strategy
Trinity Capital Issues $125 Million in Senior Notes
Neutral
Jul 3, 2025

On July 3, 2025, Trinity Capital Inc. entered into a seventh supplemental indenture with U.S. Bank Trust Company to issue $125 million in 6.750% notes due in 2030. The notes, which are unsecured obligations, rank senior to subordinated debt and are intended to repay outstanding secured indebtedness with KeyBank, National Association. This move is part of Trinity Capital’s strategy to manage its debt obligations and improve its financial positioning.

The most recent analyst rating on (TRIN) stock is a Buy with a $15.50 price target. To see the full list of analyst forecasts on Trinity Capital stock, see the TRIN Stock Forecast page.

Private Placements and Financing
Trinity Capital Announces $125 Million Notes Issuance
Neutral
Jul 1, 2025

On June 26, 2025, Trinity Capital Inc. entered into an underwriting agreement with Keefe, Bruyette & Woods, Inc. and Morgan Stanley & Co. LLC for the issuance and sale of $125 million in 6.750% Notes due 2030. This transaction, expected to close on July 3, 2025, involves customary representations, warranties, and indemnification provisions, and was made under the company’s effective shelf registration statement.

The most recent analyst rating on (TRIN) stock is a Hold with a $14.00 price target. To see the full list of analyst forecasts on Trinity Capital stock, see the TRIN Stock Forecast page.

Executive/Board ChangesShareholder Meetings
Trinity Capital Re-elects Directors at Annual Meeting
Neutral
Jun 16, 2025

On June 12, 2025, Trinity Capital Inc. held its Annual Meeting of Stockholders where two key proposals were voted upon. The stockholders re-elected two directors, Irma Lockridge and Steven L. Brown, to the Board of Directors and ratified the selection of Ernst & Young LLP as the independent registered public accounting firm for the fiscal year ending December 31, 2025.

The most recent analyst rating on (TRIN) stock is a Buy with a $15.50 price target. To see the full list of analyst forecasts on Trinity Capital stock, see the TRIN Stock Forecast page.

DividendsBusiness Operations and StrategyFinancial Disclosures
Trinity Capital Reports Strong Q1 2025 Financial Results
Positive
May 7, 2025

On May 7, 2025, Trinity Capital Inc. reported its financial results for the first quarter of 2025, highlighting a 29.5% increase in total investment income year-over-year, reaching $65.4 million. The company’s net asset value rose to $833.4 million, with a return on average equity of 15.5%. Despite macroeconomic uncertainties, Trinity Capital continues to expand its platform and generate solid returns, with total gross investment commitments of $185.9 million and a consistent dividend distribution for the 21st consecutive quarter.

Private Placements and FinancingFinancial Disclosures
Trinity Capital Announces Q1 2025 Portfolio Activity
Neutral
Apr 9, 2025

On April 9, 2025, Trinity Capital Inc. announced its portfolio activity for the first quarter of 2025, highlighting $220 million in total investments and $186 million in new commitments. The investments included $148 million in secured loans, $71 million in equipment financings, and $1 million in warrant and equity investments. The company funded $95 million to six new portfolio companies and $125 million to 19 existing ones, while receiving $157 million from repayments and exits. Trinity Capital plans to release its full first-quarter financial results on May 7, 2025, which will be discussed in a conference call the same day.

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.Date of analysis: Jun 27, 2025