TPVG - TriplePoint Venture falls 12% after Q1 results Wells Fargo downgrades stock

2023-05-04 11:16:17 ET

TriplePoint Venture Growth ( NYSE: TPVG ) fell as much as 12.3% to a near three-year low on Thursday after the venture capital firm reported Q1 results , prompting Wells Fargo to downgrade the stock to Equal Weight from Overweight given portfolio headwinds.

"TPVG's current discount is moderate in the industry context at ~0.9x NAV, where current portfolio headwinds may overshadow its good historical track record," said Wells Fargo.

"With significant headwinds from credit, and uncertainty relating to the impact of the incentive fee lookback on NOI, we estimate shares should trade to 0.85x NAV, or $10 per share," it added.

The research firm lowered its price target on TriplePoint ( TPVG ) to $10 from $12, implying 6.8% potential downside to its last close.

In a post-earnings call , TriplePoint ( TPVG ) Chief Investment Officer Sajal Srivastava guided for gross investment fundings of $25M-$75M for Q2 vs. prior outlook of $50M-$100M. This is due to reduced allocation of new commitments and low utilization of existing unfunded commitments.

CEO Jim Labe said VC investment activity was pressured during Q1 by monetary policy tightening and downturn in public company multiples and valuations. "There are early signs that investment momentum will pick up later this year and into 2024."

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