Sixth Street Specialty Lending (TSLX) AI Stock Analysis

• Market Cap: $1.64B
• Dividend Yield: 9.64%
• Average Volume (3M): 929.05K
• Price to Earnings (P/E): 9.6
• Beta (1Y): 0.61
• Revenue Growth: -6.44%
• EPS Growth: -1.18%
• Country: US
• Employees: N/A
• Sector: Financial
• Sector Strength: 70
• Industry: Asset Management
• EPS (TTM): 0.52
• Shares Outstanding: 94,705,150
• 10 Day Avg. Volume: 1,568,636
• 30 Day Avg. Volume: 929,052
• PEG Ratio: -1.11
• Price to Book (P/B): 1.28
• Price to Sales (P/S): 5.71
• P/FCF Ratio: 5.12
• Enterprise Value/Market Cap: 2.05
• Enterprise Value/Revenue: 9.34
• Enterprise Value/Gross Profit: 12.82
• Enterprise Value/Ebitda: 14.58
• 1Y Price Target: $21.57
• Price Target Upside: 24.54% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 7
• EPS Forecast (FY): 1.98
• Revenue Forecast (FY): $409.51M

• Rating: 59 Neutral
• Price Target: $21.00 ▲(21.25% Upside)
• Action: Reiterated Date: 02/14/26
• Date: Action: Reiterated 02/14/26

The score is anchored by mixed financial quality (strong annual profitability and generally healthy cash generation, but notable inconsistencies in the latest TTM data) and weak technical momentum (below key moving averages with negative MACD). These are partially offset by attractive valuation (low P/E and high yield) and a constructive earnings-call outlook with solid liquidity, conservative leverage, and covered dividends despite some NAV and yield/spread headwinds.

Positive Factors

Liquidity and conservative leverage

Substantial liquidity (≈33% of assets and multi‑times coverage of unfunded commitments) and target leverage near 1.1x provide durable funding flexibility. This supports selective originations, cushions against drawdowns, and preserves capacity to capitalize on dislocations over the next several quarters.

Consistently strong operating returns

A multi‑year record of double‑digit economic returns and operating ROE above the company’s cost of equity indicates a repeatable investment edge. Sustained return generation suggests durable underwriting, fee capture, and portfolio construction that can support dividends and internal capital reinvestment.

Top‑of‑capital‑structure, floating‑rate portfolio

A portfolio concentrated in first‑lien, predominantly floating‑rate loans with low nonaccruals and modest LTVs reduces downside volatility from credit cycles. Structural floating exposure helps preserve interest income in rising rate regimes and supports margin resilience versus fixed‑rate alternatives.

Negative Factors

Modest NAV pressure and unrealized losses

Small but persistent NAV declines and periodic unrealized valuation reversals signal sensitivity to mark‑to‑market moves and idiosyncratic credit events. For a dividend‑focused BDC, NAV erosion can constrain total return and limit optional capital actions if losses recur or cluster over multiple quarters.

Reinvestment spread compression

A tighter spread environment reduces new‑loan yields versus past vintages, pressuring net investment income over time. If reinvestment occurs at materially lower spreads, sustaining historic ROEs will require either higher leverage, increased fee income, or improved credit selection—each carrying tradeoffs.

JV deployment and spillover timing risk

A sizable, multi‑period commitment to a new structured‑credit JV introduces execution and timing risk. Accretive returns are expected, but delayed deployment or adverse market conditions could postpone benefits, while capital remains committed and unable to immediately bolster core NII.

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

Annual statements show very high profitability and generally supportive cash generation with stable-but-meaningful leverage. However, revenue and cash flow have been uneven across years, and the provided TTM figures (revenue, net income, debt, equity, and cash flow) are inconsistent with the annual trend, reducing confidence in the most recent run-rate snapshot.

Income Statement

Annual results show strong profitability (net profit margins consistently >50% from 2020–2024), but growth has been uneven: revenue declined in 2022 and slightly in 2024 after a surge in 2023. The TTM (Trailing-Twelve-Months) snapshot appears distorted (extremely large revenue with slightly negative net income and near-zero margin), which raises data quality/volatility concerns and limits confidence in recent run-rate earnings.

Balance Sheet

On the annual balance sheets, leverage is meaningful but fairly stable for the business model, with debt-to-equity around ~0.93–1.19 over 2020–2024. Equity has grown over time, supporting asset growth, and returns on equity have been solid in most years (roughly 8%–17%). The TTM (Trailing-Twelve-Months) balance sheet shows zero debt and an extremely large equity/asset base versus prior years, which is inconsistent with the annual trend and adds uncertainty around the latest period.

Cash Flow

Annual cash generation is generally healthy: operating cash flow roughly tracks net income in most years (free cash flow equals operating cash flow in the provided data), and 2024 shows strong cash coverage versus earnings. However, cash flow has been choppy (notably weaker in 2022, then stronger in 2023–2024). The TTM (Trailing-Twelve-Months) cash flow shows zero operating and free cash flow with a sharp decline, which conflicts with the annual pattern and weighs on the score.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	360.21M	359.74M	369.80M	187.16M	266.27M
Gross Profit	262.39M	252.97M	273.41M	136.49M	225.86M
EBITDA	230.75M	193.12M	223.83M	111.24M	214.07M
Net Income	170.52M	186.57M	222.02M	108.05M	211.78M
Balance Sheet
Total Assets	3.42B	3.58B	3.34B	2.84B	2.55B
Cash, Cash Equivalents and Short-Term Investments	19.66M	4.97M	1.22M	10.21M	1.57M
Total Debt	1.74B	1.90B	1.78B	1.44B	1.19B
Total Liabilities	1.81B	1.97B	1.85B	1.50B	1.28B
Stockholders Equity	1.61B	1.61B	1.50B	1.34B	1.28B
Cash Flow
Free Cash Flow	401.58M	187.25M	191.97M	71.83M	112.62M
Operating Cash Flow	401.58M	187.25M	191.97M	71.83M	112.62M
Investing Cash Flow	0.00	-232.74M	-428.76M	-296.37M	-110.17M
Financing Cash Flow	-409.24M	47.62M	236.34M	234.21M	241.00K

Sixth Street Specialty Lending Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 17.32
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Positive
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSLX, the sentiment is Negative. The current price of 17.32 is below the 20-day moving average (MA) of 19.50, below the 50-day MA of 20.92, and below the 200-day MA of 21.88, indicating a bearish trend. The MACD of -0.97 indicates Positive momentum. The RSI at 23.25 is Positive, neither overbought nor oversold. The STOCH value of 16.00 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for TSLX.

Sixth Street Specialty Lending Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
CSWC	72 Outperform	$1.32B	12.22	11.11%	11.90%	25.28%	-1.69%
Sector *	68 Neutral	$18.00B	11.42	9.92%	3.81%	9.73%	1.22%
GSBD	66 Neutral	$1.02B	7.95	8.75%	17.34%	-16.58%	65.24%
AAMI	66 Neutral	$1.92B	24.37	7024.00%	0.08%	21.53%	42.18%
TRIN	66 Neutral	$1.23B	7.56	14.15%	13.53%	33.44%	25.22%
NMFC	61 Neutral	$771.17M	56.17	1.30%	14.17%	36.15%	-38.59%
TSLX	59 Neutral	$1.64B	9.56	10.61%	9.64%	-6.44%	-1.18%

Sixth Street Specialty Lending Corporate Events

Sixth Street Specialty Lending Reports Strong 2025 Results

On February 12, 2026, Sixth Street Specialty Lending reported full-year 2025 net investment income of $2.23 per share and net income of $1.81 per share, with fourth-quarter figures of $0.53 and $0.32 per share, respectively, supported by higher rates and strong fee income. The company’s 2025 return on equity reached 13.1% on a net investment income basis and 10.6% on a net income basis, while net asset value per share edged down to $16.98 at year-end, yielding a 10.9% economic return when including dividends.

Adjusted for capital gains incentive fee unwind, 2025 net investment income was $2.18 per share and net income was $1.76 per share, and the base dividend remained well covered, with fourth-quarter adjusted NII of $0.52 per share exceeding the $0.46 base payout. The board declared a first-quarter 2026 base dividend of $0.46 per share and a fourth-quarter 2025 supplemental dividend of $0.01 per share, signaling continued cash returns to shareholders despite modest NAV pressure.

Over 2025, the company committed $1.08 billion to new investments and funded $894 million, while exits and repayments totaled $1.20 billion, resulting in net repayments of $302.1 million and a slight reduction in portfolio company count. The portfolio remained 89.2% first-lien debt with 96.3% of debt investments floating rate and low non-accruals at 0.6% of fair value, underscoring a conservative credit profile amid active turnover.

In the fourth quarter of 2025, new commitments were $242.4 million and fundings $196.7 million, against $234.9 million of exits and repayments, and the weighted average total yield on debt and income-producing securities hovered around 11%. During the quarter, affiliates of Sixth Street, including TSLX, also formed Structured Credit Partners JV with Sixth Street Lending Partners and Carlyle-managed BDCs to invest in broadly syndicated first-lien senior secured loans via CLO debt, with TSLX committing $200 million, though the vehicle had not commenced operations by year-end 2025.

The most recent analyst rating on (TSLX) stock is a Buy with a $26.00 price target. To see the full list of analyst forecasts on Sixth Street Specialty Lending stock, see the TSLX Stock Forecast page.