MeritValue

Sixth Street Specialty Lending, Inc.

TSLXdata completeness 75%6 fiscal years on file

Data notes: no data for concept 'revenue'; no data for concept 'capex'

The thesis, from the filings

Sixth Street Specialty Lending, Inc. earns about 9% on invested capital, but has diluted owners by 21% over 5 years — worth asking whether the growth reaches owners. The applicable estimate puts fair value near $20.55 a share.Whether it’s worth owning at today’s price is the last question — and yours to answer, below.

i. The business — what you’d actually own
FigureFY 2021FY 2022FY 2023FY 2024FY 2025
Revenue—————
Net income$211.8M1$108.1M2$222M3$186.6M3$170.5M3
Operating cash flow$2.45M4−$224.5M5−$236.8M6−$45.5M6$401.6M6
Capital expenditure—————
Free cash flow (derived)—————
Total debt$1.19B7$1.44B8$1.78B9$1.9B10$1.74B10
Cash & equivalents$16M11$25.6M12$25.2M13$27.3M14$19.7M14
Diluted shares77.7M78.2M85.1M92.0M94.1M

Superscripts are receipts. Each links to the SEC filing the number came from (full list at the bottom).

ii. Your slice — ownership made literal
If you owned
shares
Net assets behind them
$170.85
your share of equity
Profit it earned you last year
$18.12
Free cash flow it threw off
—
Debt you’d be carrying
$185.26

10 shares is a claim on $170.85 of net worth that earned you $18.12 last year, against $185.26 of debt.

iii. Is this a good business?
Moat signal · return on invested capital
9% avg · 5y
FY21 7%FY22 8%FY23 10%FY24 9%FY25 —

It earned an average 9% on invested capital over 5 years. Compare that to what it costs to fund the business.

seeing a moat in the numbers →
Management signal · capital allocation
+21% shares · 5y

Share count is up 21% over 5 years — owners have been diluted. Worth asking what they got for it. Total debt has risen 47% over the same window.

reading capital allocation →

Signals, not verdicts — read from the filings above. Numbers don’t prove a moat; they show its footprint. You decide.

iv. What it’s worth — engine v0.1.0
DCF · Growth Exit 10Y
not applicable
only 0 years of FCF (need ≥3) — model not applicable
DCF · Growth Exit 5Y
not applicable
only 0 years of FCF (need ≥3) — model not applicable
Earnings Power Value
$20.55
assumptions (8)
  • riskFreeRate4.7%
  • equityRiskPremium5.0%
  • beta100.0%
  • equityWeight85.0%
  • costOfDebtSpread1.5%
  • taxRate21.0%
  • normalizedEarnings$186.6M
  • growthAssumed0.0%
Graham Number
$26.38
assumptions (1)
  • grahamMultiplier2250.0%

Different models answer different questions — which to trust when →

Sources — the receipts
  1. 10-K · period ending 2021-12-31 · accession 0000950170-24-015845 (ProfitLoss)
  2. 10-K · period ending 2022-12-31 · accession 0000950170-25-019845 (ProfitLoss)
  3. 10-K · period ending 2023-12-31 · accession 0001193125-26-048664 (NetIncomeLoss)
  4. 10-K · period ending 2021-12-31 · accession 0000950170-24-015845 (NetCashProvidedByUsedInOperatingActivities)
  5. 10-K · period ending 2022-12-31 · accession 0000950170-25-019845 (NetCashProvidedByUsedInOperatingActivities)
  6. 10-K · period ending 2023-12-31 · accession 0001193125-26-048664 (NetCashProvidedByUsedInOperatingActivities)
  7. 10-K · period ending 2021-12-31 · accession 0000950170-23-003042 (LongTermDebt)
  8. 10-K · period ending 2022-12-31 · accession 0000950170-24-015845 (LongTermDebt)
  9. 10-K · period ending 2023-12-31 · accession 0000950170-25-019845 (LongTermDebt)
  10. 10-K · period ending 2024-12-31 · accession 0001193125-26-048664 (LongTermDebt)
  11. 10-K · period ending 2021-12-31 · accession 0000950170-23-003042 (CashAndCashEquivalentsAtCarryingValue)
  12. 10-K · period ending 2022-12-31 · accession 0000950170-24-015845 (CashAndCashEquivalentsAtCarryingValue)
  13. 10-K · period ending 2023-12-31 · accession 0000950170-25-019845 (CashAndCashEquivalentsAtCarryingValue)
  14. 10-K · period ending 2024-12-31 · accession 0001193125-26-048664 (CashAndCashEquivalentsAtCarryingValue)