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Tpg Re Finance Trust (TRTX)
:TRTX
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Tpg Re Finance
(NYSE:TRTX)
59Neutral
Positive Factors
Credit Profile
The overall credit profile of TPG RE Finance Trust remains strong despite current loan losses impacting earnings per share.
Earnings Potential
TRTX should be in a position to increase the earnings run-rate given their liquidity, lower leverage and REO recycling.
Investment Growth
TRTX originated $242.0M across two new loans during 4Q, marking the second straight quarter of net portfolio growth.
Negative Factors
Earnings Impact
TRTX reported distributable earnings per share of $0.10, below expected $0.28 and consensus $0.27, driven by realized losses on new REO.
Foreclosure Concerns
A somewhat-sudden foreclosure on two previously 4-risk rated multifamily loans raises concerns.
Property Value Erosion
There was a (9.4%) erosion in loan value and a (27.3%) erosion in overall property value from two foreclosed properties.
Tpg Re Finance (TRTX) vs. S&P 500 (SPY)
Market Cap
$602.92M
Dividend Yield12.56%
Average Volume (3M)959.96K
Price to Earnings (P/E)10.8
Beta (1Y)0.82
Revenue Growth-13.64%
EPS GrowthN/A
CountryUS
EmployeesN/A
SectorReal Estate
Sector Strength83
IndustryREIT - Mortgage
Share Statistics
EPS (TTM)0.70
Shares Outstanding79,857,376
10 Day Avg. Volume726,123
30 Day Avg. Volume959,960
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)0.00
Price to Cash Flow (P/CF)0.00
P/FCF Ratio0.00
Enterprise Value/Market Cap5.09
Enterprise Value/RevenueN/A
Enterprise Value/Gross Profit68.41
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$9.50Price Target Upside24.35% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering6
Tpg Re Finance Business Overview & Revenue Model
Company DescriptionTPG RE Finance Trust, Inc. (TRTX) is a real estate finance company that primarily focuses on originating, acquiring, and managing commercial mortgage loans and other commercial real estate-related debt instruments. The company operates within the real estate sector and provides capital solutions to the commercial real estate market across the United States.
How the Company Makes MoneyTPG RE Finance Trust, Inc. generates revenue primarily through the interest income earned on its portfolio of commercial mortgage loans. The company provides financing to owners of commercial properties, and these loans are secured by real estate assets. TRTX earns interest from these loans, which is its main source of income. Additionally, the company may invest in other commercial real estate-related debt instruments, such as subordinated mortgage-backed securities and mezzanine loans, which can provide additional revenue streams. The company's performance and earnings are influenced by factors such as interest rate fluctuations, credit market conditions, and the overall health of the commercial real estate market. Strategic partnerships with financial institutions and real estate operators may also play a role in enhancing its investment opportunities and expanding its portfolio.
Tpg Re Finance Financial Statement Overview
Summary
Tpg Re Finance shows signs of financial recovery with improving profitability and a stronger balance sheet, yet it faces challenges such as historical revenue volatility and inconsistent cash flows. The improvements in debt management are promising, but continued focus on maintaining stable income and cash flow will be crucial for future stability and growth.Income Statement
The company has shown inconsistent revenue figures with a significant decline from 2019 to 2020 and only partial recovery thereafter. Gross profit margins improved in the latest year, but net income has been volatile, swinging from losses to profits. Recent net profit margin improvement is a positive sign, but historical volatility remains a concern.45
Neutral
Balance Sheet
The balance sheet indicates a reduction in total debt, leading to a stronger equity position. The debt-to-equity ratio has improved due to decreased liabilities. However, fluctuating equity levels and previous high leverage remain areas of concern, despite the recent improvements.55
Neutral
Cash Flow
Operating cash flow remains stable, showing resilience. However, free cash flow has been inconsistent, with significant fluctuations in investing and financing cash flows. The company's ability to generate consistent free cash flow is uncertain, posing risks to cash flow stability.50
Neutral
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 44.82M | 27.70M | 156.27M | 169.81M | -27.66M | Gross Profit |
| 44.82M | 13.14M | 142.98M | 154.02M | -49.67M | EBIT |
| 34.78M | 2.60M | 87.64B | 139.61M | -136.52M | EBITDA |
| 0.00 | 0.00 | 76.56B | 139.61M | -136.52M | Net Income Common Stockholders |
| 59.67M | -116.63M | -60.07M | 138.55M | -136.83M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 190.16M | 206.38M | 5.23B | 260.63M | 319.67M | Total Assets |
| 3.73B | 4.21B | 5.55B | 5.22B | 4.91B | Total Debt |
| 2.57B | 3.04B | 4.16B | 3.71B | 3.39B | Net Debt |
| -190.16M | 2.83B | 3.91B | 3.45B | 3.07B | Total Liabilities |
| 2.62B | 3.09B | 4.22B | 3.75B | 3.64B | Stockholders Equity |
| 1.11B | 1.12B | 1.32B | 1.46B | 1.27B |
| Cash Flow | Free Cash Flow | |||
| 112.13M | 74.76M | 95.44M | 132.17M | 132.09M | Operating Cash Flow |
| 112.13M | 80.13M | 100.50M | 132.17M | 132.09M | Investing Cash Flow |
| 440.51M | 1.10B | -452.56M | -342.90M | 964.59M | Financing Cash Flow |
| -569.18M | -1.22B | 345.34M | 152.10M | -856.67M |
Tpg Re Finance Technical Analysis
Neutral
7.64
Price Trends
7.83
Negative
8.06
Negative
8.09
Negative
Market Momentum
-0.12
Negative
54.55
Neutral
87.83
Negative
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 7.64 is above the 20-day moving average (MA) of 7.27, below the 50-day MA of 7.83, and below the 200-day MA of 8.09, indicating a neutral trend. The MACD of -0.12 indicates Negative momentum. The RSI at 54.55 is Neutral, neither overbought nor oversold. The STOCH value of 87.83 is Negative, 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
Overall Rating
UnderperformOutperform
Sector (60)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
61 Neutral | $762.71M | 17.76 | 5.23% | 20.14% | 61.59% | ― | |
60 Neutral | $2.74B | 11.40 | 0.08% | 8531.66% | 5.98% | -15.71% | |
59 Neutral | $602.92M | 10.84 | 6.22% | 12.56% | -13.64% | ― | |
54 Neutral | $618.91M | 56.52 | 2.42% | 10.81% | -16.46% | ― | |
50 Neutral | $480.41M | 11.39 | 7.97% | 21.83% | 137.36% | ― | |
50 Neutral | $482.27M | ― | 2.63% | 13.63% | 33.72% | -15.41% | |
48 Neutral | $775.29M | 18.08 | 3.03% | 11.11% | 27.92% | ― |
* Real Estate Sector Average
Performance Comparison
TRTX
Tpg Re Finance
7.55
0.09
1.21%
IVR
Invesco Mortgage
7.36
-0.20
-2.65%
RWT
Redwood
5.89
0.17
2.97%
NYMT
New York Mortgage
6.35
0.91
16.73%
ORC
Orchid Island Capital
7.08
-0.06
-0.84%
KREF
Kkr Real Estate Finance
9.23
0.46
5.25%
Tpg Re Finance Earnings Call Summary
Earnings Call Date:Apr 29, 2025
(Q4-2024)
| % Change Since: 1.46%|
Next Earnings Date:Aug 05, 2025
Earnings Call Sentiment Positive
The earnings call highlighted a successful year with strong financial performance and strategic loan investments. While challenges such as foreclosures and REO management exist, the company's robust liquidity and investment pipeline position it well for 2025.Q4-2024 Updates
Positive Updates
Successful Year with Strong Financial Performance
Achieved a 100% performing balance sheet at year-end 2024 with stable credit risk ratings. Generated distributable earnings that fully covered a $0.96 per share common dividend, with earnings before realized losses covering the dividend at 1.1x.
Increased Loan Investment Activity
Increased net earning assets by 3% in the second half of 2024, due to $446 million of new loan commitments. Plans to accelerate loan investment volume in 2025, supported by $320.8 million in liquidity and a leverage ratio of 2.14:1.
Robust Investment Pipeline
Over $300 million of live investment opportunities in various stages of diligence, indicating a strong start for 2025 investment activities.
Improved Credit Position in New York Office Loan
Successfully amended a loan secured by a Class A office building, reducing the commitment from $200 million to $130 million and attracting $60 million of new institutional equity.
Strong Market Performance
TRTX's share price performance led its peers since January 2023, with a cumulative return of 61% through the reported period.
Negative Updates
Foreclosure on Multifamily Loans
Took foreclosure action on two multifamily loans in San Antonio and Chicago, highlighting challenges in asset management.
Increased Allowance for Loan Losses
Reported a $5 million provision expense driven by macroeconomic factors, although the overall CECL reserve declined.
REO Portfolio Challenges
REO properties represent 7.4% of total assets, with California office properties currently in the market for sale, indicating ongoing challenges in asset liquidation.
Company Guidance
In the TPG Real Estate Finance Trust's earnings call for the fourth quarter and full year of 2024, the company outlined a robust performance with several key metrics. The company built a "fortress balance sheet" with substantial liquidity and maintained a 100% performing loan portfolio. They achieved a distributable earnings rate that covered their $0.96 per share annual dividend, with earnings before realized losses at $1.08 per share, covering the dividend by 1.1 times. TRTX reported a 3% increase in net earning assets in the second half of 2024, driven by $446 million in new loan commitments with an LTV of approximately 60% and a weighted-average spread of SOFR plus 3.25%. The company also highlighted the deployment of $320.8 million in liquidity and leverage of 2.14:1. TRTX's share price performance led its peers with a 61% cumulative return since January 2023. The call emphasized the company's strategic positioning for increased investment activity in 2025, backed by a significant investment pipeline and strong operating results, including a 100% performing loan portfolio, a CECL reserve of 187 basis points, and a weighted-average risk rating of 3.0.Tpg Re Finance Corporate Events
Private Placements and FinancingBusiness Operations and Strategy
TPG RE Finance Closes $1.1 Billion CRE CLO Deal
Positive
Apr 2, 2025
On March 28, 2025, TPG RE Finance Trust, Inc. closed a $1.1 billion Commercial Real Estate Collateralized Loan Obligation (CRE CLO) named TRTX 2025-FL6. This transaction involved the placement of $962.5 million of investment-grade securities with institutional investors, providing the company with term financing on a non-mark-to-market, non-recourse basis. The issuance includes a 30-month reinvestment period and resulted in net cash proceeds of approximately $191 million for investment and other corporate purposes. This move reflects TPG RE Finance’s strategic financial management and enhances its liquidity position, potentially impacting its market operations and stakeholder interests positively.
Private Placements and Financing
TPG RE Finance Announces $1.1 Billion CRE CLO Pricing
Positive
Mar 13, 2025
On March 12, 2025, TPG RE Finance Trust, Inc. announced the pricing of a $1.1 billion Commercial Real Estate Collateralized Loan Obligation (CRE CLO) named TRTX 2025-FL6. This issuance is expected to generate approximately $962.5 million in investment grade securities for institutional investors, providing the company with non-mark-to-market, non-recourse term financing. The transaction includes a 30-month reinvestment period and is expected to close around March 28, 2025. The company will redeem its previous CRE CLO, TRTX 2019-FL3, resulting in net cash proceeds of approximately $211.1 million for investment and other corporate purposes.
Business Operations and StrategyFinancial Disclosures
TPG RE Finance to Present at Citi 2025 Conference
Neutral
Mar 3, 2025
TPG RE Finance Trust, Inc. announced that its CEO, Doug Bouquard, along with senior management, will present an overview of the company at the Citi 2025 Global Property CEO Conference. The presentation materials, which are not intended to provide new material investor information, will be made available to investors. The company highlighted various risks and uncertainties affecting its operations, including interest rate fluctuations, real estate market changes, and economic conditions, emphasizing the potential impact on its financial performance and stakeholder interests.
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.