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Tpg Re Finance (TRTX)
NYSE:TRTX
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Tpg Re Finance
(NYSE:TRTX)
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Rating:59Neutral
Price Target:
$9.00
▲(6.38% Upside)
Action:ReiteratedDate:02/18/26
The score is held back primarily by uneven financial performance (notably the sharp 2025 revenue decline and prior earnings volatility) and weak near-term technical momentum. These are partly offset by attractive income valuation (high dividend yield) and a generally constructive earnings call highlighting strong originations, solid credit performance, and improved funding, albeit with rising leverage and some execution risks.
Positive Factors
Strong Origination & Net Asset Growth
Sizable, repeat-borrower originations and late‑cycle funding drove 25% net asset growth to $4.1B. Durable origination capability supports sustained interest income, portfolio scale and market presence, improving capacity to drive earnings through loan yields over cycles.
High Credit Performance
A fully performing loan book with stable risk ratings and only isolated downgrades suggests strong underwriting and portfolio monitoring. This credit stability supports lower loss expectations, steadier cash flow and more predictable distributable earnings over the medium term.
Improved Funding Mix & CLO Capacity
Shift toward non‑MTM financing and successful CRE CLO issuance provides durable, long‑dated capacity and lower funding cost. This structurally improves net interest spread resilience, liquidity for deployment, and reduces short‑term funding volatility risks.
Negative Factors
Sharp 2025 Revenue Decline
An ~80% revenue drop materially weakens earnings quality and visibility; suggests results were influenced by non‑recurring items or timing shifts. Such volatility makes forward distributable income harder to predict and raises execution risk for maintaining dividend levels.
Higher Target Leverage
Planned increase to mid‑3x leverage elevates sensitivity to credit losses and interest‑rate moves. While leverage can amplify returns in stable markets, it reduces financial flexibility and increases downside risk in stress, making capital and covenant management more critical over time.
Spread Compression on New Loans
Consistent originations at materially tighter spreads compress net interest margins unless offset by further funding cost declines. If sustained, spread erosion can pressure distributable earnings and dividend coverage despite scale and improved funding, reducing margin sustainability.
Tpg Re Finance (TRTX) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$655.04M
Dividend Yield10.48%
Average Volume (3M)750.25K
Price to Earnings (P/E)14.6
Beta (1Y)0.55
Revenue Growth-10.86%
EPS Growth-5.90%
CountryUS
EmployeesN/A
SectorReal Estate
Sector Strength53
IndustryREIT - Mortgage
Share Statistics
EPS (TTM)0.24
Shares Outstanding78,354,050
10 Day Avg. Volume816,478
30 Day Avg. Volume750,254
Financial Highlights & Ratios
PEG Ratio-0.44
Price to Book (P/B)0.64
Price to Sales (P/S)2.05
P/FCF Ratio7.56
Enterprise Value/Market Cap5.90
Enterprise Value/Revenue14.58
Enterprise Value/Gross Profit16.74
Enterprise Value/Ebitda15.10
Forecast
1Y Price Target
$10.00Price Target Upside18.20% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering4
EPS Forecast (FY)1.06
Revenue Forecast (FY)$154.69M
Tpg Re Finance Business Overview & Revenue Model
Company DescriptionTPG RE Finance Trust, Inc., a commercial real estate finance company, originates, acquires, and manages commercial mortgage loans and other commercial real estate-related debt instruments in the United States. It invests in commercial mortgage loans; subordinate mortgage interests, mezzanine loans, secured real estate securities, note financing, preferred equity, and miscellaneous debt instruments; and commercial real estate collateralized loan obligations and commercial mortgage-backed securities secured by properties primarily in the office, multifamily, life science, mixed-use, hospitality, industrial, and retail real estate sectors. The company qualifies as a real estate investment trust for federal income tax purposes. It generally would not be subject to federal corporate income taxes if it distributes at least 90% of its taxable income to its stockholders. TPG RE Finance Trust, Inc. was incorporated in 2014 and is based in New York, New York.
How the Company Makes MoneyTPG RE Finance generates revenue primarily through the interest income earned on its mortgage loans and other real estate-related debt investments. The company typically funds its investments with a combination of equity and debt financing, allowing it to leverage its capital base. Key revenue streams include interest payments received from borrowers, fees associated with loan origination and servicing, and potential gains from the sale of real estate assets. Additionally, TRTX may engage in strategic partnerships with other financial institutions or real estate firms to expand its investment opportunities and enhance its market reach, contributing to its overall earnings.
Tpg Re Finance Earnings Call Summary
Earnings Call Date:Feb 17, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:May 05, 2026
Earnings Call Sentiment Positive
The call contained multiple strong operational and financial highlights: sizable originations ($1.9B), 25% net asset growth, full-year distributable earnings covering the dividend (1.01x), a 100% performing loan book, improved liability profile (82% non-mark-to-market) and a lower cost of funds. These positives are tempered by some near-term headwinds and execution items including a modest q/q decline in book value (-1.6%), an increase in leverage (3.02x) as the company moves toward a higher target, spread compression on new loan originations (~50 bps below portfolio average), a small increase in CECL reserves, one loan downgrade (~1% of commitments), remaining REO to be sold and market perception with the stock trading at ~20% discount to book. Overall, the operational momentum, strong originations, liquidity and capital markets execution materially outweigh the noted lowlights, supporting a constructive outlook for 2026.Q4-2025 Updates
Positive Updates
Strong Origination and Investment Activity in 2025
Originated 20 loans with total commitments of $1,900,000,000 in 2025; fourth quarter alone closed $927,000,000 of new loans (62% multifamily, 38% industrial). Over 90% of new originations were with repeat borrowers, demonstrating deep borrower relationships.
Meaningful Net Asset Growth
Net assets grew from $3,300,000,000 to $4,100,000,000, a 25% year-over-year increase driven by substantial new loan originations and repayment activity.
Solid Earnings and Dividend Coverage
Full-year distributable earnings of $76,800,000 or $0.97 per common share; coverage ratio of annual dividend was 1.01x (annual dividend $0.96 per share). Quarter distributable earnings were $18,500,000 or $0.24 per share. GAAP net income for the full year was $45,500,000 or $0.57 per share.
100% Performing Loan Portfolio and Stable Credit Profile
Loan portfolio ended the year 100% performing with a weighted average risk rating unchanged at 3.0. During the quarter, two multifamily loans were upgraded (3→2) and one multifamily loan was downgraded (3→4) representing ~1% of total loan commitments.
Improved Liability Structure and Lower Cost of Funds
Liability structure is 82% non-mark-to-market (up from 77% at 12/31/2024). Year-over-year cost of funds declined 18 basis points (from 2.00% to 1.82%, a ~9% reduction). Issued two CRE CLOs (TRTX FL6 and FL7) totaling $2,200,000,000, providing reinvestment capacity and attractive funding.
Strong Balance Sheet Liquidity and Financing Capacity
Near-term liquidity of $143,000,000 at year-end (including ~$72,600,000 cash net of covenants, $51,400,000 undrawn secured capacity, $4,000,000 CLO reinvestment proceeds). Additionally held unencumbered loan investments eligible to pledge totaling $127,100,000 and $1,600,000,000 of financing capacity available to support loan investments.
Active Capital Markets and Repayments
Received loan repayments of $987,900,000 during the year, including full repayments of $931,500,000 on 15 loans. Management highlighted continued healthy capital markets velocity and expectations for active transaction volume in 2026.
Strategic Sector Positioning
Increased combined exposure to multifamily and industrial from ~30% in early 2022 to over 72% of the balance sheet at year-end, reflecting a strategic shift into targeted, thematic sectors where management sees favorable fundamentals and platform advantage.
Negative Updates
Quarterly Book Value Decline
Book value per common share decreased quarter-over-quarter to $11.07 from $11.25, a decline of approximately 1.6%.
Leverage Increased Quarter-over-Quarter
Total leverage rose to 3.02x at year-end from 2.64x the prior quarter (increase of 0.38x), reflecting substantial loan origination volume; management's target leverage is 3.5x–3.75x (indicating further planned increase toward 'full investment').
Spread Compression on New Loans
Management noted spreads on new loans were approximately 50 basis points below the portfolio average in recent originations (tightening in loan spreads observed in Q4), though offset in part by lower cost of funds.
Slight Increase in CECL Reserves
CECL reserves increased slightly quarter-over-quarter to 180 basis points from 176 basis points (up 4 basis points), indicating modest reserve build.
Single Loan Downgrade and Operational Challenges
One multifamily loan was downgraded from risk rating 3 to 4 during the quarter due to operational challenges; this loan represents approximately 1% of total loan commitments.
Market Valuation / Share Price Discount
Analysts noted the stock trading at roughly a 20% discount to book value; management acknowledged the gap and emphasized focus on closing it but the discount reflects persistent market skepticism.
REO and Office Exposure Remaining
Company sold two office assets in 2025 but still has some REO remaining; management expects to continue selling REO, signalling ongoing portfolio cleanup but a remaining execution task.
Timing Lumpiness of Origination
Early Q1 activity showed only one loan closed so far; management explained origination and payoff timing can be lumpy (bulk of new fundings occurred late in Q4), implying quarter-to-quarter variability in reported interest income.
Company Guidance
The company guided to continued active origination and balance‑sheet deployment in 2026, aiming to grow net assets and move leverage toward a target of roughly 3.5–3.75x (current total leverage 3.02x vs 2.64x prior quarter) to reach near‑full investment while using $1.6B of available financing capacity, $143M near‑term liquidity (cash $72.6M net of $15M covenant holdback, $51.4M undrawn capacity, $4M CLO reinvest proceeds) and $127.1M of unencumbered loans available to pledge; management expects continued origination velocity (Q4 2025 closes of $927M — 62% multifamily / 38% industrial; full‑year 2025: 20 loans, $1.9B commitments, weighted average credit spread 2.82%, >90% repeat borrowers) against a supportive backdrop (10‑year Treasury just above 4%) and attractive funding (two 2025 CRE CLOs TRTX FL6 & FL7 totaling $2.2B and a Q4 series CLO with WAC of ~1.67%, helping drive cost of funds down 18 bps YoY to 1.82%); other key metrics underpinning guidance include 25% YoY net asset growth to $4.1B (from $3.3B), 100% performing loan portfolio with weighted avg risk rating 3.0, CECL reserves at 180 bps, distributable earnings $76.8M / $0.97 per share (coverage 1.01x on $0.96 dividend), GAAP net income $45.5M / $0.57 per share, and book value per share of $11.07.Tpg Re Finance Financial Statement Overview
Summary
Cash flow is the strongest area (steady positive operating cash flow and free cash flow), but earnings quality and visibility are weakened by multi-year volatility and an ~80% revenue decline in 2025. The balance sheet has historically run high leverage, and while the latest period shows improvement, it remains uneven based on the provided statements.Income Statement
Profitability has been volatile: the company swung from losses in 2022–2023 to strong profitability in 2024 and 2025, with 2025 showing net income exceeding revenue (suggesting meaningful non-operating items). The biggest concern is the sharp revenue decline in 2025 (down ~80% year over year), which materially weakens earnings quality and forward visibility. 2024 was a comparatively strong year with solid revenue and profits, but the multi-year inconsistency and unusual 2025 mix keep the income statement score below average.46
Neutral
Balance Sheet
Leverage was elevated for most of the period (debt-to-equity generally ~2.3x–3.1x from 2020–2024), which is a key risk factor for a mortgage REIT through credit and rate cycles. A notable positive is 2025 reporting zero debt and improved return on equity versus the loss years, but this step-change is large relative to prior years and should be viewed cautiously based solely on the provided data. Overall, the balance sheet looks adequate but historically leveraged, with improving (yet uneven) returns on equity.52
Neutral
Cash Flow
Cash generation appears relatively steady across the cycle, with positive operating cash flow and free cash flow each year provided. Free cash flow was broadly in line with net income in most years, supporting earnings cash-conversion, and 2025 shows an improvement in free cash flow growth. The main weakness is that cash flow strength did not prevent earnings volatility in 2022–2023, implying results can still be sensitive to market/credit factors even when cash flow remains positive.64
Positive
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 332.57M | 148.97M | -73.52M | 305.71M | 240.72M |
| Gross Profit | 263.75M | 113.34M | -81.05M | 142.98M | 217.59M |
| EBITDA | 262.38M | 0.00 | 0.00 | 305.71M | 240.72M |
| Net Income | 60.32M | 74.33M | -116.63M | -60.07M | 138.55M |
Balance Sheet | |||||
| Total Assets | 4.41B | 3.73B | 4.21B | 5.55B | 5.22B |
| Cash, Cash Equivalents and Short-Term Investments | 87.61M | 190.16M | 206.38M | 254.05M | 260.63M |
| Total Debt | 0.00 | 2.57B | 3.04B | 4.16B | 3.71B |
| Total Liabilities | 3.34B | 2.62B | 3.09B | 4.22B | 3.75B |
| Stockholders Equity | 1.07B | 1.11B | 1.12B | 1.32B | 1.46B |
Cash Flow | |||||
| Free Cash Flow | 90.36M | 106.81M | 74.76M | 95.44M | 132.17M |
| Operating Cash Flow | 90.36M | 112.13M | 80.13M | 100.50M | 132.17M |
| Investing Cash Flow | -789.71M | 440.51M | 1.10B | -452.56M | -342.90M |
| Financing Cash Flow | 597.13M | -569.18M | -1.22B | 345.34M | 152.10M |
Tpg Re Finance Technical Analysis
Neutral
8.46
Price Trends
8.89
Negative
8.75
Negative
8.36
Positive
Market Momentum
-0.16
Positive
36.61
Neutral
13.38
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TRTX, the sentiment is Neutral. The current price of 8.46 is below the 20-day moving average (MA) of 8.83, below the 50-day MA of 8.89, and above the 200-day MA of 8.36, indicating a neutral trend. The MACD of -0.16 indicates Positive momentum. The RSI at 36.61 is Neutral, neither overbought nor oversold. The STOCH value of 13.38 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for TRTX.
Tpg Re Finance Risk Analysis
Tpg Re Finance disclosed 111 risk factors in its most recent earnings report. Tpg Re Finance reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Tpg Re Finance Peers Comparison
UnderperformOutperform
Sector (65)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
65 Neutral | $2.17B | 12.19 | 3.79% | 4.94% | 3.15% | 1.96% | |
59 Neutral | $655.04M | 14.61 | 5.32% | 10.48% | -10.86% | -5.90% | |
54 Neutral | $720.59M | 13.80 | 5.25% | 13.31% | -0.93% | -1.92% | |
49 Neutral | $757.56M | -9.56 | -6.84% | 13.13% | 34.68% | -251.91% | |
49 Neutral | $437.83M | -6.56 | -3.86% | 11.33% | -24.37% | -19.19% | |
44 Neutral | $269.13M | -0.85 | -14.78% | 26.82% | -43.56% | -166.72% | |
43 Neutral | $314.09M | -0.66 | -19.24% | ― | -65.32% | -325.73% |
* Real Estate Sector Average
TRTX
Tpg Re Finance
8.46
0.85
11.17%
RWT
Redwood
5.93
0.13
2.24%
RC
Ready Capital
1.66
-4.59
-73.42%
KREF
Kkr Real Estate Finance
6.87
-3.39
-33.04%
FBRT
Franklin BSP Realty Trust
9.03
-3.12
-25.69%
CMTG
Claros Mortgage Trust
2.32
0.03
1.31%
Tpg Re Finance Corporate Events
Private Placements and Financing
TPG RE Finance Closes $1.1 Billion CRE CLO Deal
Positive
Nov 21, 2025
On November 17, 2025, TPG RE Finance Trust, Inc. announced the closing of a $1.1 billion Commercial Real Estate Collateralized Loan Obligation (CRE CLO) named TRTX 2025-FL7. This transaction involved placing approximately $957 million of investment-grade securities with institutional investors, providing non-mark-to-market, non-recourse term financing. The issuance, which includes a 30-month reinvestment period and a weighted average interest rate of Term SOFR plus 1.67%, is expected to generate net cash proceeds of approximately $58.5 million for the company following the redemption of a previous CLO, TRTX 2021-FL4. This move is anticipated to enhance the company’s financial flexibility and support future investment opportunities.
The most recent analyst rating on (TRTX) stock is a Buy with a $11.00 price target. To see the full list of analyst forecasts on Tpg Re Finance stock, see the TRTX Stock Forecast page.
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.