Is Trinity Capital (TRIN) Fairly Valued After Strong Q3 Results And Record NAV?

Trinity Capital (TRIN) just delivered third quarter numbers that caught investor attention, reporting revenue of US$98.39 million and net income of US$46.92 million, along with commentary on record Net Asset Value and Return on Equity.

At a share price of US$17.74, Trinity Capital has had a strong run this year, with a year to date share price return of 17.87% and a 1 year total shareholder return of 41.23%. This signals momentum that contrasts with the small share price dip on the earnings day and aligns with longer term total shareholder returns of 87.83% over 3 years and 109.98% over 5 years as investors respond to the recent earnings, record Net Asset Value update and the post quarter bond and equity raises.

Scan beyond Trinity Capital and line up other income focused lenders showing resilient balance sheets and consistent cash generation using our curated list of solid balance sheet and fundamentals (24 results) for comparison.

After a sharp run that now prices Trinity Capital close to some analyst targets and at a discount to one estimate of intrinsic value, is it worth committing fresh capital today, or is it better to wait for a cleaner pullback before buying more?

Most Popular Narrative: 4% Undervalued

Trinity Capital is trading at $17.74 against a widely followed fair value narrative of $18.50. This frames the current price as modestly below that estimate and puts the spotlight on what could drive that gap to close.

The main factor for success is that Trinity Capital continues to expand fee based managed funds and SBIC capacity so that third party capital and fund level income become a larger and durable share of overall earnings.

The current valuation implies that Trinity Capital is fairly valued, with the share price broadly reflecting its record AUM, growing managed funds contribution, disciplined balance sheet funding, and credit outcomes to date.

See why 34 investors see Trinity Capital as 4% undervalued.

Result: Fair Value of $18.50 (UNDERVALUED)

Still, a slower deployment of Trinity Capital’s US$3.2b platform or pressure on funding costs could challenge the assumed revenue growth and margin expansion narrative.

Find out about the key risks to this Trinity Capital narrative.

Next Steps

Plenty in this Trinity Capital story pulls in different directions, so move quickly on your own homework and weigh both sides of the ledger using 4 key rewards and 4 important warning signs.

Looking for more investment ideas beyond Trinity Capital?

If Trinity Capital has sharpened your focus on quality, do not stop here. Broaden your watchlist now so you are not late to the next opportunity.

• Target stronger downside protection by scanning companies with resilient earnings profiles through our 32 resilient stocks with low risk scores.
• Spot potential value opportunities early by reviewing companies that screen as attractively priced using the 42 high quality undervalued stocks.
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