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TriplePoint Venture (TPVG) Up 3.8% Despite Q3 Earnings Miss

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TriplePoint Venture Growth BDC Corp. (TPVG - Free Report) third-quarter 2021 net investment income was 32 cents per share, missing the Zacks Consensus Estimate of 35 cents. The bottom line also declined 20% from the year-ago quarter.

Results reflected a decline in total investment income and higher expenses. Nonetheless, robust portfolio activity was a tailwind. This perhaps drove the bullish investor sentiments as the company’s shares have gained 3.8% since the earnings release earlier this week.

Net investment income was $9.9 million, down 19% year over year.

Total Investment Income Down, Expenses Rise

Total investment and other income totaled $21.2 million, down 8.2% year over year, reflecting lower interest income from investments and other income.

Total operating expenses rose 3.8% to $11.3 million. This increase was mainly due to higher interest expense and amortization of fees, and general and administrative expenses.

Strong Balance Sheet

As of Sep 30, 2021, TriplePoint Venture’s net asset value was $13.92 per share, up from $12.97 as of Dec 31, 2020.

The company had $288.1 million in liquidity, consisting of $23.1 million in cash and restricted cash, and $265 million available capacity under its credit facility as of Sep 30, 2021. The credit facility figure excluded an additional $50 million available under the facility’s accordion feature.

As of Sep 30, 2021, total assets amounted to $795.1 million, up from $683.5 million on Dec 31, 2020.

Total Portfolio Value & New Commitments Solid

The fair value of TriplePoint Venture’s total investment portfolio was $767 million as of Sep 30, 2021, up from $646.8 million on Sep 30, 2020.

As of Sep 30, 2021, TriplePoint Venture held debt investments with 40 portfolio companies, warrants in 71 portfolio companies, and equity investments in 34 portfolio companies.

In the quarter, the company entered into $116.3 million of new debt commitments with seven portfolio companies and funded $117 million in debt investments to 15 portfolio companies. Further, it recorded $18.2 million of principal prepayments and had $14.1 million of scheduled principal amortization.

Our Take

TriplePoint Venture’s strong portfolio activity is likely to act as a tailwind, which is expected to support its top line in the coming quarters. However, mounting expenses and a fall in total interest income remain major near-term concerns.

Currently, TriplePoint Venture carries a Zacks Rank #4 (Sell).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Performance & Earnings Schedule of Other Finance Stocks

Hercules Capital Inc.’s (HTGC - Free Report) third-quarter 2021 net investment income of 33 cents per share beat the Zacks Consensus Estimate by a penny. The bottom line was 2.9% down from the year-ago quarter figure.

Ares Capital Corporation’s (ARCC - Free Report) third-quarter 2021 core earnings of 47 cents per share beat the Zacks Consensus Estimate of 45 cents. The bottom line reflected a rise of 20.5% from the prior-year quarter.

FS KKR Capital Corp. (FSK - Free Report) is slated to announce quarterly results on Nov 8.