Sixth Street Specialty Lending (TSLX) AI Stock Analysis

• Market Cap: $2.07B
• Dividend Yield: 9.42%
• Average Volume (3M): 464.96K
• Price to Earnings (P/E): 10.7
• Beta (1Y): 0.56
• Revenue Growth: -6.44%
• EPS Growth: -1.18%
• Country: US
• Employees: N/A
• Sector: Financial
• Sector Strength: 70
• Industry: Asset Management
• EPS (TTM): 0.53
• Shares Outstanding: 94,493,930
• 10 Day Avg. Volume: 474,883
• 30 Day Avg. Volume: 464,959
• PEG Ratio: -0.47
• Price to Book (P/B): 1.22
• Price to Sales (P/S): 5.45
• P/FCF Ratio: 10.47
• Enterprise Value/Market Cap: 1.89
• Enterprise Value/Revenue: 10.79
• Enterprise Value/Gross Profit: 15.21
• Enterprise Value/Ebitda: 17.38
• 1Y Price Target: $23.67
• Price Target Upside: 8.78% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 6
• EPS Forecast (FY): 2.17
• Revenue Forecast (FY): $444.03M

• Rating: 75 Outperform
• Price Target: $25.00 ▲(14.89% Upside)

Sixth Street Specialty Lending's strong financial performance, attractive valuation, and positive technical indicators contribute to a solid stock score. The company's strategic investments and leadership transition are positive, but challenges in the competitive and interest rate environment require attention.

Positive Factors

Strong Profitability

High profit margins and effective equity management indicate robust financial health, supporting sustainable operations and growth.

Leadership Transition

The leadership transition to Bo Stanley as Co-CEO is expected to bring fresh strategic perspectives, potentially enhancing long-term company performance.

Portfolio Stability

Growth in net asset value per share amidst challenging conditions demonstrates resilience and effective portfolio management.

Negative Factors

Revenue Contraction

Declining revenue growth can impact long-term financial stability and limit the company's ability to invest in future opportunities.

Competitive Pressures

Increased competition and spread compression may pressure margins, affecting profitability and market positioning over time.

Interest Rate Environment

A declining yield environment can reduce income from lending activities, impacting revenue and profitability in the long term.

Sixth Street Specialty Lending Business Overview & Revenue Model

Company Description

Sixth Street Specialty Lending, Inc. (NYSE: TSLX) is a business development company. The fund provides senior secured loans (first-lien, second-lien, and unitranche), unsecured loans, mezzanine debt, and investments in corporate bonds and equity securities and structured products, non-control structured equity, and common equity with a focus on co-investments for organic growth, acquisitions, market or product expansion, restructuring initiatives, recapitalizations, and refinancing. The fund invests in business services, software & technology, healthcare, energy, consumer & retail, manufacturing, industrials, royalty related businesses, education, and specialty finance. It seeks to finance and lending to middle market companies principally located in the United States. The fund invests in companies with enterprise value between $50 million and $1 billion or more and EBITDA between $10 million and $250 million. The transaction size is between $15 million and $350 million. The fund invests across the spectrum of the capital structure and can arrange syndicated transactions of up to $500 million and hold sizeable positions within its credits.

How the Company Makes Money

Sixth Street Specialty Lending generates revenue primarily through interest income from its loan portfolio, which includes both first-lien and second-lien loans. The company earns interest on the loans it extends to middle-market companies, which can be structured as fixed or floating rates. Additionally, TSLX may also generate income from fees associated with loan origination, amendment, and other services provided to borrowers. The company's revenue model is bolstered by its strategic partnerships with private equity firms and investment advisors, which help to source high-quality investment opportunities. Furthermore, TSLX may benefit from market conditions that allow for the successful refinancing of loans, thereby potentially increasing its overall returns.

Sixth Street Specialty Lending Financial Statement Overview

Summary

Sixth Street Specialty Lending exhibits strong profitability with robust margins and a solid balance sheet. Despite a decline in revenue, the company remains profitable, supported by healthy cash flow generation. Potential risks include revenue contraction and historical cash flow volatility.

Income Statement

Sixth Street Specialty Lending shows strong performance in its income statement, with a robust net profit margin of 50.13% and a high EBIT margin of 89.11% for TTM (Trailing-Twelve-Months). However, the revenue growth rate is negative, indicating a decrease in revenue compared to the previous year. The company maintains a healthy EBITDA margin of 81.07%.

Balance Sheet

The company has a solid equity base with an equity ratio of 47.35% and a relatively low debt-to-equity ratio of 1.07, indicating a moderate level of leverage. Return on Equity is impressive at 12.97%, signifying effective use of equity to generate profits. The balance sheet reflects a stable financial position, although there is a slight increase in total liabilities over the periods.

Cash Flow

Cash flow metrics reveal mixed results. The company has a positive free cash flow for TTM, demonstrating operational efficiency, but the free cash flow growth rate is unavailable due to previous negative cash flows. The operating cash flow to net income ratio is 0.82, implying a healthy conversion of income into cash, yet historical cash flow volatility poses a risk.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	361.82M	359.74M	369.80M	187.16M	266.27M	235.39M
Gross Profit	256.82M	252.97M	273.41M	136.49M	225.86M	198.35M
EBITDA	224.72M	193.12M	223.83M	111.24M	214.07M	183.87M
Net Income	191.55M	186.57M	222.02M	108.05M	211.78M	178.11M
Balance Sheet
Total Assets	3.51B	3.58B	3.34B	2.84B	2.55B	2.34B
Cash, Cash Equivalents and Short-Term Investments	83.16M	4.97M	1.22M	10.21M	1.57M	2.46M
Total Debt	1.83B	1.90B	1.78B	1.44B	1.19B	1.11B
Total Liabilities	1.89B	1.97B	1.85B	1.50B	1.28B	1.18B
Stockholders Equity	1.62B	1.61B	1.50B	1.34B	1.28B	1.16B
Cash Flow
Free Cash Flow	116.12M	187.25M	191.97M	71.83M	112.62M	135.97M
Operating Cash Flow	116.12M	187.25M	191.97M	71.83M	112.62M	135.97M
Investing Cash Flow	180.65M	-232.74M	-428.76M	-296.37M	-110.17M	9.10M
Financing Cash Flow	-243.33M	47.62M	236.34M	234.21M	241.00K	-145.94M

Sixth Street Specialty Lending Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 21.76
• 50DMA: Positive
• 100DMA: Negative
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSLX, the sentiment is Neutral. The current price of 21.76 is above the 20-day moving average (MA) of 21.50, above the 50-day MA of 21.37, and above the 200-day MA of 21.66, indicating a bullish trend. The MACD of 0.20 indicates Negative momentum. The RSI at 53.77 is Neutral, neither overbought nor oversold. The STOCH value of 17.49 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for TSLX.

Sixth Street Specialty Lending Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
TRIN	76 Outperform	$1.13B	6.85	16.18%	13.41%	33.44%	25.22%
TSLX	75 Outperform	$2.07B	10.72	11.91%	9.42%	-6.44%	-1.18%
GSBD	71 Outperform	$1.12B	8.63	8.75%	17.00%	-16.58%	65.24%
CSWC	68 Neutral	$1.25B	13.99	9.80%	11.78%	25.28%	-1.69%
Sector *	68 Neutral	$18.00B	11.42	9.92%	3.81%	9.73%	1.22%
NMFC	66 Neutral	$988.23M	14.68	5.43%	14.01%	36.15%	-38.59%
AAMI	66 Neutral	$1.71B	20.22	7024.00%	0.08%	21.53%	42.18%

Sixth Street Specialty Lending Corporate Events

Sixth Street Announces CEO Transition and Strong Q3 Results

On November 4, 2025, Sixth Street Specialty Lending announced the resignation of Joshua Easterly as CEO, effective December 31, 2025, while he remains Chairman of the Board. Robert (Bo) Stanley was appointed as Co-CEO and will become the sole CEO after December 31, 2025. The company reported strong financial performance for Q3 2025, with net investment income of $0.54 per share and a net income of $0.47 per share, corresponding to an annualized ROE of 12.5% and 11.0%, respectively. The Board declared a fourth quarter base dividend of $0.46 per share and a third quarter supplemental dividend of $0.03 per share. The company’s portfolio showed significant investment activity, with $387.7 million in new commitments and a focus on first-lien debt investments.