AFC Gamma (AFCG) AI Stock Analysis

• Market Cap: $63.06M
• Dividend Yield: 30.82%
• Average Volume (3M): 229.38K
• Price to Earnings (P/E): ―
• Beta (1Y): 1.10
• Revenue Growth: -47.13%
• EPS Growth: -361.12%
• Country: US
• Employees: N/A
• Sector: Real Estate
• Sector Strength: 53
• Industry: REIT - Specialty
• EPS (TTM): -0.12
• Shares Outstanding: 23,528,845
• 10 Day Avg. Volume: 320,504
• 30 Day Avg. Volume: 229,375
• PEG Ratio: 0.01
• Price to Book (P/B): 0.36
• Price to Sales (P/S): 2.02
• P/FCF Ratio: 5.64
• Enterprise Value/Market Cap: 1.95
• Enterprise Value/Revenue: 58.44
• Enterprise Value/Gross Profit: 88.52
• Enterprise Value/Ebitda: -39.95
• 1Y Price Target: N/A
• Price Target Upside: N/A
• Rating Consensus: Hold
• Number of Analyst Covering: 1
• EPS Forecast (FY): 0.57
• Revenue Forecast (FY): $26.05M

• Rating: 48 Neutral
• Price Target: $2.50 ▲(6.84% Upside)
• Action: Reiterated Date: 03/05/26
• Date: Action: Reiterated 03/05/26

The score is constrained primarily by the sharp deterioration in 2025 financial performance (revenue collapse and GAAP loss), despite improved leverage and positive cash flow. Earnings-call takeaways are constructive on strategy and pipeline growth but remain weighed down by nonaccruals, high credit reserves, and refinancing risk; technicals are neutral-to-weak and valuation is skewed by a very high yield and negative earnings.

Positive Factors

Expanded Investment Mandate (BDC Conversion)

The BDC conversion is a structural change expanding the investable universe beyond property-backed loans into cash-flowing lower middle market companies. That diversification reduces industry concentration, broadens origination opportunities, and supports durable revenue growth and higher-yield assets over the next 2–6 months.

Improved Leverage and Balance Sheet Flexibility

Material reduction in total debt and a lower debt/equity ratio meaningfully improve financial flexibility and reduce refinancing pressure. A stronger balance sheet supports selective deployment into higher-yield middle market loans and provides a cushion for credit volatility across the next several quarters.

Positive Cash Generation and Distributable Earnings

Sustained positive operating and distributable cash indicates the underlying loan portfolio can generate real cash flows despite GAAP losses. This cash runway supports continued dividends, targeted deployments, and rebuilding of portfolio scale under the new BDC mandate over a multi-month horizon.

Negative Factors

Sharp Revenue Collapse and GAAP Loss

A full-year collapse in reported revenue and a sizable GAAP loss reflect realized credit losses and weak earnings quality. This deterioration reduces ROE, limits internal capital generation, and means management must rely on recoveries or new profitable originations to restore sustainable profitability within the next several quarters.

Legacy Credit Stress: Nonaccruals, High Reserves, Unrealized Losses

Concentrated legacy credit problems drive large CECL reserves and unrealized losses that materially constrain distributable earnings and capital redeployment. Recovery timing is uncertain, so these credit overhangs can continue to depress returns and limit origination capacity for multiple quarters.

Refinancing Risk and Limited Near-Term Deployment Capacity

A significant unsecured bond maturity and admitted inability to sustain rapid deployment without predictable recoveries expose the firm to refinancing and liquidity risk. If markets tighten or recoveries lag, the company may need expensive funding or asset sales, constraining growth under the new BDC strategy.

AFC Gamma Business Overview & Revenue Model

Company Description

Advanced Flower Capital, Inc. provides commercial real estate finance services. It primarily engages in originating, structuring, underwriting and managing senior secured loans and other types of loans for established companies operating in the cannabis industry in states. The company was founded by Leonard Mark Tannenbaum on July 6, 2020 and is headquartered in West Palm Beach, FL.

How the Company Makes Money

AFC Gamma generates revenue primarily through interest income from loans and credit facilities extended to cannabis operators. The company typically structures its loans with competitive interest rates, often secured by the underlying real estate and operating assets of the borrowers. Additional revenue streams may include origination fees, late fees, and other service fees associated with their financing products. AFCG's strategic partnerships with licensed cannabis operators and its expertise in assessing the unique risk factors of the cannabis industry contribute to its ability to underwrite loans effectively, enhancing its revenue potential. The growth of legal cannabis markets across various states and countries also serves as a significant factor driving demand for AFC Gamma's financial services.

AFC Gamma Financial Statement Overview

Summary

Results weakened materially: 2025 revenue fell to zero and the company swung to a sizable GAAP loss (~-$20.7M). Offsetting factors include improved leverage (debt-to-equity down to ~0.43) and still-positive operating/free cash flow (~$11.2M), but cash flow durability and debt coverage remain concerns.

Income Statement

Profitability and revenue profile deteriorated sharply: 2025 shows revenue dropping to zero (down 100%) and a swing from solid profits in 2024 (net income of ~$16.8M) to a sizable loss (net income of about -$20.7M). Prior years show strong margins and meaningful revenue scale (2021–2024), but the latest year’s collapse materially weakens the earnings quality and near-term outlook.

Balance Sheet

Leverage is moderate and improved versus 2024: debt-to-equity moved down from ~0.94 (2024) to ~0.43 (2025) as total debt fell materially (from ~$188.6M to ~$76.3M). Equity remains sizable (~$175.6M) and assets are still meaningful (~$275.6M). The key concern is profitability pressure—return on equity turned negative in 2025—suggesting the balance sheet is stable but returns have weakened.

Cash Flow

Cash generation remains positive despite the earnings downturn: operating cash flow was ~$11.2M in 2025 (though down ~20% year over year), and free cash flow stayed positive at a similar level. However, cash flow covers only a small portion of total debt (operating cash flow is ~15% of debt in 2025), and the downtrend from 2022–2025 reduces confidence in cash flow durability.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	31.32M	51.90M	51.80M	71.54M	38.08M
Gross Profit	28.39M	41.49M	51.80M	60.36M	35.43M
EBITDA	-14.53M	20.65M	0.00	81.95M	38.59M
Net Income	-20.67M	16.78M	20.95M	35.93M	21.00M
Balance Sheet
Total Assets	275.59M	402.06M	466.59M	519.18M	464.85M
Cash, Cash Equivalents and Short-Term Investments	38.61M	103.61M	90.38M	140.37M	125.13M
Total Debt	76.32M	188.61M	130.01M	157.13M	171.42M
Total Liabilities	100.03M	200.68M	146.53M	180.12M	191.77M
Stockholders Equity	175.57M	201.38M	320.05M	339.06M	273.08M
Cash Flow
Free Cash Flow	11.24M	21.56M	21.23M	31.32M	9.54M
Operating Cash Flow	11.24M	21.56M	21.23M	31.32M	9.54M
Investing Cash Flow	34.90M	-4.85M	28.52M	-16.34M	-248.46M
Financing Cash Flow	-111.14M	-34.72M	-68.49M	16.15M	338.54M

AFC Gamma Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 2.34
• 50DMA: Positive
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AFCG, the sentiment is Positive. The current price of 2.34 is below the 20-day moving average (MA) of 2.46, below the 50-day MA of 2.44, and below the 200-day MA of 3.49, indicating a neutral trend. The MACD of 0.08 indicates Negative momentum. The RSI at 62.02 is Neutral, neither overbought nor oversold. The STOCH value of 69.30 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for AFCG.

AFC Gamma Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
FPI	69 Neutral	$503.73M	5.00	6.78%	14.23%	-9.27%	333.85%
Sector *	65 Neutral	$2.17B	12.19	3.79%	4.94%	3.15%	1.96%
AFCG	48 Neutral	$63.06M	―	-11.32%	30.82%	-47.13%	-361.12%

AFC Gamma Corporate Events

AFC Gamma Secures $20 Million Related-Party Credit Facility

On January 27, 2026, Advanced Flower Capital Inc. entered into an unsecured revolving credit agreement with TCGSL LLC, an affiliate controlled by Chairman Leonard M. Tannenbaum and his family, providing a $20 million aggregate commitment maturing on August 1, 2028. The new facility, which may be used for general corporate purposes including portfolio investments, enhances the company’s financial flexibility and access to liquidity, potentially supporting its ongoing investment activities and capital deployment strategy while involving a related-party lender structure that may be of particular interest to governance-focused stakeholders.

The most recent analyst rating on (AFCG) stock is a Hold with a $2.50 price target. To see the full list of analyst forecasts on AFC Gamma stock, see the AFCG Stock Forecast page.

AFC Gamma Amends Loan Agreement After BDC Conversion

On January 13, 2026, Advanced Flower Capital Inc. entered into a Sixth Amendment to its Loan and Security Agreement, originally dated April 29, 2022, with its existing lender group and lead arranger. The amendment updates the facility to include provisions tailored to the company’s recent conversion from a real estate investment trust to a business development company, signaling a formal alignment of its financing arrangements with its new regulatory and operational framework and potentially enhancing its flexibility to pursue its evolving lending strategy.

The most recent analyst rating on (AFCG) stock is a Sell with a $2.50 price target. To see the full list of analyst forecasts on AFC Gamma stock, see the AFCG Stock Forecast page.

AFC Gamma Completes Strategic Conversion to BDC Structure

On January 1, 2026, Advanced Flower Capital completed its previously announced conversion from a real estate investment trust to a business development company regulated under the Investment Company Act of 1940, a move formally announced in a January 5, 2026 press release and accompanied by a new investment advisory agreement with AFC Management that will govern management and incentive fees from that date. In connection with the conversion, the company overhauled its governance and operating framework by terminating its prior management agreement without a termination fee, adopting new bylaws and lifting REIT-related ownership restrictions, and entering into new administration, custody, transfer agency and services agreements that collectively formalize its BDC infrastructure, broaden its investment remit beyond real estate-backed loans to a wider universe of operating businesses, and are intended to support AFC’s ability to pursue a deeper pipeline of opportunities and generate attractive risk-adjusted returns for shareholders while maintaining its existing Nasdaq listing under the ticker AFCG.

The most recent analyst rating on (AFCG) stock is a Hold with a $3.00 price target. To see the full list of analyst forecasts on AFC Gamma stock, see the AFCG Stock Forecast page.