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Sixth Street Specialty Lending
(NYSE:TSLX)
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Rating:64Neutral
Price Target:
$19.50
â–²(16.63% Upside)
Action:Reiterated
Date:08/05/26
TSLX scores moderately positive, led by strong annual profitability/cash generation and a constructive (but cautious) earnings outlook with stable NAV and solid credit performance. Technicals are supportive near term but still below the 200-day trend, while valuation benefits from a reasonable P/E and very high yield. Offsetting factors include meaningful leverage, uneven top-line momentum, TTM data inconsistencies, and corporate-event dilution/dividend-cut overhangs.
Positive Factors
Consistent Free Cash Flow
TSLX generates positive free cash flow annually that closely tracks net income, providing a durable internal funding source. Reliable cash generation supports the base dividend, funds new investments, and cushions credit stress, lowering reliance on volatile external capital over months.
Negative Factors
Leverage and Unsecured Funding Concentration
Meaningful leverage combined with a heavy reliance on unsecured debt increases sensitivity to funding market repricing. If unsecured markets tighten or yields spike, borrowing costs and access could deteriorate, pressuring spreads, distributable income and balance‑sheet flexibility.
Read all positive and negative factors
Positive Factors
Negative Factors
Consistent Free Cash Flow
TSLX generates positive free cash flow annually that closely tracks net income, providing a durable internal funding source. Reliable cash generation supports the base dividend, funds new investments, and cushions credit stress, lowering reliance on volatile external capital over months.
Read all positive factors
Sixth Street Specialty Lending (TSLX) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$1.63B
Dividend Yield11.01%
Average Volume (3M)652.42K
Price to Earnings (P/E)14.9
Beta (1Y)0.56
Revenue Growth-29.32%
EPS Growth-39.45%
CountryUS
EmployeesN/A
SectorFinancial
Sector Strength70
IndustryAsset Management
Share Statistics
EPS (TTM)0.95
Shares Outstanding95,019,600
10 Day Avg. Volume445,225
30 Day Avg. Volume652,422
Financial Highlights & Ratios
PEG Ratio-1.11
Price to Book (P/B)1.28
Price to Sales (P/S)5.71
P/FCF Ratio11.41
Enterprise Value/Market Cap<0.01
Enterprise Value/Revenue<0.01
Enterprise Value/Gross Profit<0.01
Enterprise Value/Ebitda<0.01
Forecast
1Y Price Target
$18.92Price Target Upside13.14% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering6
EPS Forecast (FY)1.72
Revenue Forecast (FY)$379.19M
Sixth Street Specialty Lending Business Overview & Revenue Model
Company Description
Sixth Street Specialty Lending, Inc. (TSLX) functions as a specialized Business Development Company. It provides a wide array of financing solutions, including various forms of debt such as senior secured loans (encompassing first-lien, second-lie...
How the Company Makes Money
TSLX makes money primarily from investment income generated on its portfolio of debt investments. The largest revenue stream is interest income earned on loans (typically floating-rate senior secured loans), which is driven by the size of the inve...
Sixth Street Specialty Lending Earnings Call Summary
Earnings Call Date:Aug 04, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Nov 03, 2026
Earnings Call Sentiment Positive
The call conveys a constructive and cautiously optimistic outlook. Key positive points include stable NAV ($16.24), a base dividend ($0.42), solid per-share earnings ($0.43), an annualized ROE around 10.6%, high portfolio yields (11.2%) and attractive new-investment spreads (690 bps on new first-lien). Portfolio credit quality metrics are strong (coverage 2.4x, low nonaccruals at 1.3%, internal rating 1.20) and repayment activity accelerated (repayments +70% Q/Q), supporting expectations for improved activity-based fees in H2. Offsetting these positives are constrained market-wide origination and M&A volumes (direct lending down ~50% Q/Q), activity-based fees still below long-term averages, modestly higher funding costs and a heavy reliance on unsecured debt (79%). Management believes conditions are improving and pipeline momentum should drive more closings in H2, but uncertainty remains. Overall, highlights outweigh lowlights, indicating a positive but cautious near-term outlook.Positive Updates
Stable NAV and Approved Dividend
Net asset value (NAV) per share of $16.24 at quarter end, stable sequentially. Board approved a base quarterly dividend of $0.42 per share (record Sept 15, payable Sept 30). Q2 operating earnings exceeded the base dividend.
Negative Updates
Muted Market Activity and Origination Volumes
Direct lending volumes declined by approximately 50% sequentially and were materially down vs Q2 2025; private equity deal activity and sponsor-backed M&A remained constrained, limiting market-wide transaction flow and keeping activity-based fees below long-term historical averages.
Read all updates
Q2-2026 Updates
Positive
Negative
Stable NAV and Approved Dividend
Net asset value (NAV) per share of $16.24 at quarter end, stable sequentially. Board approved a base quarterly dividend of $0.42 per share (record Sept 15, payable Sept 30). Q2 operating earnings exceeded the base dividend.
Read all positive updates
Company Guidance
Management said activity-based fee income should normalize over several quarters and they expect momentum in H2 2026, noting Q2 activity-based fees of $0.08 per share and Q2 net investment income/net income of $0.43 per share (annualized ROE ~10.6%), while maintaining a base quarterly dividend of $0.42 and NAV of $16.24 (net assets $1.5B; total investments $3.3B). They reported Q2 total repayments of $192M (net repayments $55M), annualized portfolio turnover of 23% in Q2 and 18% YTD, a weighted average total yield on debt at amortized cost of 11.2%, a weighted average spread on new first‑lien investments of 690 bps (trailing‑12‑month new‑commitment spread 6.8%; floating‑rate portfolio spread ~7%), and portfolio protections including effective voting control on 78% of debt, ~2 financial covenants per investment, attachment/detachment leverage of 0.4x/5.3x, interest coverage of 2.4x, weighted average revenue/EBITDA of $465M/$137M (median $180M/$57M), a weighted average internal rating of 1.20, and three nonaccruals representing 1.3% of fair value. On the balance sheet they cited average debt‑to‑equity of 1.24x (ending 1.27x; net of cash 1.17x), 79% unsecured funding, a weighted average interest rate on debt of ~5.6%, $1.1B revolver capacity vs $221M unfunded commitments (~4.9x coverage; post‑quarter undrawn revolver ≈$966M or >4.4x), undistributed income of ≈$1.12 per share, and ROE guidance of 10.0–10.5% if full‑year portfolio turnover remains below 20% (above 10.5% if turnover is higher). They also updated the Structured Credit Partners JV (called ~$154M of equity, ~25% ramped through June), target SLX JV commitment $200M, JV asset spreads ~280 bps, financing at ~85–90% debt‑to‑capital and an expected medium‑run dividend contribution in the low‑to‑mid‑teens.Sixth Street Specialty Lending Financial Statement Overview
Summary
Income Statement
62
Positive
Balance Sheet
55
Neutral
Cash Flow
66
Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 94.31B | 360.21M | 359.74M | 369.80M | 187.16M | 266.27M |
| Gross Profit | 159.73M | 262.39M | 252.97M | 273.41M | 136.49M | 225.86M |
| EBITDA | 107.31M | 230.75M | 193.12M | 223.83M | 111.24M | 214.07M |
| Net Income | 42.96B | 170.52M | 186.57M | 222.02M | 108.05M | 211.78M |
Balance Sheet | ||||||
| Total Assets | 3.54T | 3.42B | 3.58B | 3.34B | 2.84B | 2.55B |
| Cash, Cash Equivalents and Short-Term Investments | 193.56B | 2.94M | 4.97M | 1.22M | 10.21M | 1.57M |
| Total Debt | 0.00 | 1.74B | 1.90B | 1.78B | 1.44B | 1.19B |
| Total Liabilities | 1.99T | 1.81B | 1.97B | 1.85B | 1.50B | 1.28B |
| Stockholders Equity | 1.55T | 1.61B | 1.61B | 1.50B | 1.34B | 1.28B |
Cash Flow | ||||||
| Free Cash Flow | 161.42M | 180.28M | 187.25M | 191.97M | 71.83M | 112.62M |
| Operating Cash Flow | 161.42M | 180.28M | 187.25M | 191.97M | 71.83M | 112.62M |
| Investing Cash Flow | -81.32M | 221.29M | -232.74M | -428.76M | -296.37M | -110.17M |
| Financing Cash Flow | 83.80M | -409.24M | 47.62M | 236.34M | 234.21M | 241.00K |
Sixth Street Specialty Lending Technical Analysis
Positive
16.72
Price Trends
17.02
Positive
17.41
Positive
18.62
Negative
Market Momentum
0.20
Negative
62.17
Neutral
90.51
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSLX, the sentiment is Positive. The current price of 16.72 is below the 20-day moving average (MA) of 17.28, below the 50-day MA of 17.02, and below the 200-day MA of 18.62, indicating a neutral trend. The MACD of 0.20 indicates Negative momentum. The RSI at 62.17 is Neutral, neither overbought nor oversold. The STOCH value of 90.51 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TSLX.
Sixth Street Specialty Lending Risk Analysis
Sixth Street Specialty Lending disclosed 2 risk factors in its most recent earnings report. Sixth Street Specialty Lending reported the most risks in the "Legal & Regulatory" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Sixth Street Specialty Lending Peers Comparison
UnderperformOutperform
Sector (68)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
71 Outperform | $1.58B | 8.52 | 14.08% | 11.82% | 4.03% | -16.92% | |
70 Outperform | $1.47B | 11.74 | 12.13% | 9.27% | 55.92% | 35.62% | |
68 Neutral | $18.00B | 11.42 | 9.92% | 3.81% | 9.73% | 1.22% | |
66 Neutral | $3.08B | 30.45 | 161.92% | 0.27% | 23.66% | 17.83% | |
64 Neutral | $1.63B | 14.92 | 5.55% | 11.30% | -29.32% | -39.45% | |
62 Neutral | $650.78M | -11.72 | -4.83% | 17.69% | -24.31% | -157.16% | |
52 Neutral | $969.22M | 13.45 | 5.14% | 17.78% | 14.92% | 48.21% |
* Financial Sector Average
TSLX
Sixth Street Specialty Lending
18.69
-2.91
-13.48%
CSWC
Capital Southwest
24.75
4.67
23.25%
NMFC
New Mountain Finance
7.65
-1.20
-13.60%
GSBD
Goldman Sachs BDC
9.09
-0.32
-3.39%
AAMI
Acadian Asset Management
91.56
47.42
107.45%
TRIN
Trinity Capital
17.60
4.16
30.92%
Sixth Street Specialty Lending Corporate Events
Business Operations and StrategyDividendsFinancial DisclosuresPrivate Placements and Financing
Sixth Street Specialty Lending Reports Solid Q2 Results
Positive
Aug 4, 2026
On August 4, 2026, Sixth Street Specialty Lending reported second-quarter 2026 net investment income and net income of $0.43 per share, delivering annualized returns on equity of 10.6% and 10.5%, while maintaining net asset value at $16.24 per sha...
Business Operations and StrategyPrivate Placements and FinancingShareholder Meetings
Sixth Street Specialty Lending Gains Flexibility for Discounted Equity
Positive
Jun 18, 2026
On June 18, 2026, Sixth Street Specialty Lending, Inc. reconvened a special meeting of stockholders at which investors voted on a single proposal related to the company’s capital-raising flexibility. Stockholders approved authorizing the com...
Executive/Board ChangesShareholder Meetings
Sixth Street Specialty Lending Adjourns Special Stockholder Meeting
Neutral
May 22, 2026
On May 21, 2026, Sixth Street Specialty Lending, Inc. held its annual meeting of stockholders, where investors elected three Class III directors, Hurley Doddy, Michael Fishman and Robert (“Bo”) Stanley, to the board. Stockholders also ...
Business Operations and StrategyPrivate Placements and Financing
Sixth Street Specialty Lending Issues New Unsecured Notes
Positive
May 14, 2026
On May 14, 2026, Sixth Street Specialty Lending, Inc. entered into a third supplemental indenture with U.S. Bank Trust Company to support the issuance of $300 million of 5.650% unsecured notes due August 15, 2031, with semiannual interest payments...
Business Operations and StrategyExecutive/Board ChangesDividendsFinancial DisclosuresPrivate Placements and Financing
Sixth Street Specialty Lending Cuts Dividend, Extends Credit Line
Negative
May 5, 2026
On May 5, 2026, Sixth Street Specialty Lending reported first-quarter 2026 net investment income of $0.42 per share and a net loss of $0.27 per share for the period ended March 31, 2026, reflecting an annualized 9.9% ROE on net investment income a...
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.