AFC Gamma (AFCG) AI Stock Analysis

• Market Cap: $51.52M
• Dividend Yield: 30.82%
• Average Volume (3M): 197.78K
• Price to Earnings (P/E): ―
• Beta (1Y): 1.20
• Revenue Growth: -47.13%
• EPS Growth: -361.12%
• Country: US
• Employees: N/A
• Sector: Real Estate
• Sector Strength: 53
• Industry: REIT - Specialty
• EPS (TTM): 0.16
• Shares Outstanding: 22,594,542
• 10 Day Avg. Volume: 138,089
• 30 Day Avg. Volume: 197,783
• PEG Ratio: -0.44
• Price to Book (P/B): 0.86
• Price to Sales (P/S): 3.34
• P/FCF Ratio: 8.05
• Enterprise Value/Market Cap: 2.28
• Enterprise Value/Revenue: -53.24
• Enterprise Value/Gross Profit: -53.24
• Enterprise Value/Ebitda: -20.47
• 1Y Price Target: N/A
• Price Target Upside: N/A
• Rating Consensus: N/A
• Number of Analyst Covering: 0
• EPS Forecast (FY): 0.68
• Revenue Forecast (FY): $24.75M

• Rating: 48 Neutral
• Price Target: $2.50 ▲(6.84% Upside)
• Action: Reiterated Date: 01/29/26
• Date: Action: Reiterated 01/29/26

A low overall score is driven primarily by the sharp deterioration in TTM profitability/revenue and weak price/momentum trends. Strategic positives from the BDC transition and added liquidity help, but are outweighed by ongoing credit issues, dividend uncertainty, and loss-driven valuation signals.

Positive Factors

BDC conversion broadens mandate

Converting from a REIT to a BDC is a structural change that expands permissible investments and regulatory framework. This broadens deal sourcing beyond cannabis real estate, enabling diversified lending and portfolio construction that can reduce sector concentration risk and support steadier earnings over time.

Positive operating and free cash flow

Sustained positive operating and free cash flow provides internal funding for operations and opportunistic originations without immediate reliance on external capital. Strong FCF growth supports working capital needs, loan workouts, and a measured path to deleveraging if earnings recover, improving long-run resilience.

Large origination pipeline and diversification

A $350M pipeline, primarily outside cannabis, signals durable origination capacity and successful diversification. Expanding into non-cannabis direct lending can smooth cyclicality, broaden borrower credit profiles, and increase opportunities for higher utilization and fee income over the medium term if pipeline converts to closed loans.

Negative Factors

Sharp deterioration in profitability and revenue

A major swing to negative TTM revenue and a -$22.6M net loss represent a structural earnings disruption. Persistent revenue decline and negative margins reduce internal capital generation, constrain dividend capacity, and increase the imperative to restore underwriting performance to avoid long-term balance-sheet erosion.

Elevated credit stress and reserve build

Nonaccrual loans and a CECL reserve equal to 18.7% of loan carrying value indicate meaningful credit losses and recovery uncertainty. Elevated loss provisioning can compress net interest margin and capital, limit new originations, and make future earnings dependent on workout outcomes rather than organic loan growth, a persistent constraint.

Reliance on related‑party funding raises governance risk

A material related‑party credit facility improves near-term liquidity but concentrates funding with insiders and invites governance scrutiny. Structural reliance on affiliate financing can limit bargaining leverage, complicate future capital raises, and create perceived conflicts that affect long-term investor confidence and strategic flexibility.

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

Financial performance has weakened materially: TTM results show sharply negative revenue/margins and a sizable net loss, a break from prior-year profitability. Leverage appears moderate, but negative ROE and shrinking equity raise balance-sheet risk if losses persist. Positive and growing operating/free cash flow provides some cushion, though debt coverage remains only moderate.

Income Statement

Profitability and growth have deteriorated sharply in the most recent period. TTM (Trailing-Twelve-Months) revenue is negative and margins turned deeply negative (net income of about -$22.6M), a major break from the prior years’ solid profitability (2021–2024 net margins were consistently positive). Revenue also shifted from modest declines in 2023–2024 to an extreme contraction in TTM (reported revenue growth around -130%), indicating elevated earnings volatility and weak near-term operating momentum.

Balance Sheet

Leverage looks moderate on the latest balance sheet, with TTM (Trailing-Twelve-Months) debt-to-equity around 0.53 and equity (~$169M) still supporting the asset base (~$289M). However, returns on equity have flipped negative in TTM (about -12%), and equity has declined versus prior years, reflecting losses and potential balance-sheet pressure if weak performance persists. Debt levels have also been volatile year-to-year, which adds financial risk for a specialty REIT.

Cash Flow

Cash generation is a relative bright spot: TTM (Trailing-Twelve-Months) operating cash flow and free cash flow were positive at about $14.0M, with strong reported free-cash-flow growth (~33%). That said, cash flow covers only a modest portion of total debt (operating cash flow to total debt ~0.16 in TTM), implying limited deleveraging capacity without an earnings recovery. Overall, cash flow is holding up better than reported net income, but debt coverage remains a key watch item.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	-2.21M	51.90M	51.80M	71.54M	38.08M	11.48M
Gross Profit	-2.21M	41.49M	51.80M	60.36M	35.43M	11.48M
EBITDA	-5.74M	20.65M	0.00	81.95M	38.59M	0.00
Net Income	-22.58M	16.78M	20.95M	35.93M	21.00M	10.35M
Balance Sheet
Total Assets	288.72M	402.06M	466.59M	519.18M	464.85M	93.96M
Cash, Cash Equivalents and Short-Term Investments	45.12M	103.61M	90.38M	140.37M	125.13M	9.62M
Total Debt	111.06M	188.61M	130.01M	157.13M	171.42M	0.00
Total Liabilities	119.38M	200.68M	146.53M	180.12M	191.77M	2.31M
Stockholders Equity	169.34M	201.38M	320.05M	339.06M	273.08M	91.65M
Cash Flow
Free Cash Flow	14.02M	21.56M	21.23M	31.32M	9.54M	1.52M
Operating Cash Flow	14.02M	21.56M	21.23M	31.32M	9.54M	1.52M
Investing Cash Flow	-33.09M	-4.85M	28.52M	-16.34M	-248.46M	-32.43M
Financing Cash Flow	-57.97M	-34.72M	-68.49M	16.15M	338.54M	40.53M

AFC Gamma Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 2.34
• 50DMA: Negative
• 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 Negative. The current price of 2.34 is above the 20-day moving average (MA) of 2.25, below the 50-day MA of 2.55, and below the 200-day MA of 3.64, indicating a neutral trend. The MACD of -0.05 indicates Negative momentum. The RSI at 45.42 is Neutral, neither overbought nor oversold. The STOCH value of 74.06 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative 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	$567.73M	23.21	6.67%	14.23%	-9.27%	333.85%
Sector *	65 Neutral	$2.17B	12.19	3.79%	4.94%	3.15%	1.96%
AFCG	48 Neutral	$51.52M	-2.19	-12.03%	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.

AFC Gamma Shareholders Approve REIT to BDC Conversion

On November 6, 2025, Advanced Flower Capital Inc. announced that its shareholders approved proposals to convert the company from a real estate investment trust (REIT) to a business development company (BDC) regulated under the Investment Company Act of 1940. This strategic shift, marked by the approval of a new investment advisory agreement and reduced asset coverage requirements, is expected to broaden AFC’s investment scope beyond real estate-backed loans, enabling it to pursue a wider range of market opportunities and enhance its ability to generate consistent, risk-adjusted returns. The conversion, pending board approval, is anticipated to be completed in the first quarter of 2026, with AFC continuing to trade under its existing Nasdaq ticker symbol, AFCG.

The most recent analyst rating on (AFCG) stock is a Hold with a $3.50 price target. To see the full list of analyst forecasts on AFC Gamma stock, see the AFCG Stock Forecast page.