AFC Gamma (AFCG) AI Stock Analysis

• Market Cap: $83.60M
• Dividend Yield: 31.65%
• Average Volume (3M): 184.51K
• Price to Earnings (P/E): 4.8
• Beta (1Y): 1.03
• Revenue Growth: -47.74%
• EPS Growth: -156.57%
• Country: US
• Employees: N/A
• Sector: Real Estate
• Sector Strength: 46
• Industry: REIT - Specialty
• EPS (TTM): 0.15
• Shares Outstanding: 22,594,542
• 10 Day Avg. Volume: 250,974
• 30 Day Avg. Volume: 184,512
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 2.33
• Enterprise Value/Revenue: 6.72
• Enterprise Value/Gross Profit: 7.24
• Enterprise Value/Ebitda: -106.37
• 1Y Price Target: $4.50
• Price Target Upside: 20.64% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 1

• Rating: 40 Underperform
• Price Target: $4.00 ▲(7.24% Upside)

AFC Gamma's overall stock score is primarily impacted by its financial performance and technical analysis. The company faces significant revenue and leverage challenges, reflected in a low financial performance score. Technical indicators suggest bearish momentum, further weighing on the score. While the high dividend yield offers some appeal, it is overshadowed by financial instability. Strategic initiatives from the earnings call provide potential future opportunities but are currently insufficient to offset existing challenges.

Positive Factors

Market Opportunities

Management's experience in the industry is positive for winning incremental market opportunity as cannabis operators' capital requirements persist.

Market Position

Operating as a pure-play cannabis lender is seen as a positive in a market where fewer lenders are present.

Pipeline Strength

Management noted that its active pipeline remains strong, highlighting potential deals and opportunities.

Negative Factors

Dividend Cuts

AFCG decreased its dividend by 30%, affecting investor returns negatively.

Earnings Decline

Distributable EPS declined to $0.29, which was below estimates and consensus, driven by lower net interest income.

Loan Performance

Approximately 39% of AFCG's loans are on non-accrual status, creating uncertainty in credit recovery.

AFC Gamma Business Overview & Revenue Model

Company Description

AFC Gamma, Inc. (AFCG) is a real estate investment trust (REIT) focusing on the cannabis industry. The company is engaged in providing loans and other forms of capital to cannabis operators across various sectors, including cultivation, processing, and retail. AFC Gamma aims to support businesses within the cannabis industry by offering tailored financial solutions, thereby facilitating their growth and expansion.

How the Company Makes Money

AFC Gamma makes money primarily through the interest and fees generated from the loans it provides to cannabis businesses. As a REIT, AFC Gamma is required to distribute at least 90% of its taxable income to shareholders in the form of dividends, which are funded by the income generated from its lending activities. The company strategically partners with cannabis operators to offer secured loans, often collateralized by real estate or other valuable assets, thus ensuring a steady revenue stream. Additionally, AFC Gamma may also earn income from equity investments or warrants in the companies it finances, further diversifying its revenue base.

AFC Gamma Financial Statement Overview

Summary

AFC Gamma faces significant revenue challenges, with no revenue reported in 2024. Despite maintaining profitability in previous years, the balance sheet shows a reduction in equity and increased leverage. Cash flow generation remains positive but has decreased over the observed period. The company needs to address its revenue generation and leverage to improve its financial position.

Income Statement

AFC Gamma has experienced declining revenue, with a significant drop from $71.54M in 2022 to $66.11M in 2023 and no revenue reported for 2024. Net profit margin improved to 25.39% in 2023 but remains unassessed for 2024 due to no revenue. EBIT and EBITDA margins were stable in prior years but unmeasurable for 2024. This indicates some profitability but significant top-line challenges.

Balance Sheet

The company's balance sheet shows a reduction in stockholders' equity from $339.06M in 2022 to $201.38M in 2024, indicating a downward trend. The debt-to-equity ratio increased from 0.46 in 2022 to 0.44 in 2024, suggesting increased leverage. The equity ratio declined, reflecting a decrease in the proportion of equity financed by total assets.

Cash Flow

Operating cash flow has decreased from $31.32M in 2022 to $18.29M in 2024, and free cash flow followed a similar trend. Free cash flow to net income ratio indicates adequate cash generation relative to reported profits in 2023. This suggests some operational cash flow challenges despite maintaining positive free cash flow.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	29.03M	51.90M	66.11M	71.54M	38.08M	5.60M
Gross Profit	26.92M	41.49M	52.04M	60.36M	35.43M	5.23M
EBITDA	-1.83M	20.65M	26.98M	43.77M	22.16M	0.00
Net Income	-8.70M	16.78M	20.95M	35.93M	21.00M	4.31M
Balance Sheet
Total Assets	290.59M	402.06M	466.59M	519.18M	464.85M	93.96M
Cash, Cash Equivalents and Short-Term Investments	3.41M	103.61M	121.63M	140.37M	125.13M	9.62M
Total Debt	99.31M	188.61M	130.01M	157.13M	171.42M	48.63M
Total Liabilities	105.86M	200.68M	146.53M	180.12M	191.77M	1.54M
Stockholders Equity	184.73M	201.38M	320.05M	339.06M	273.08M	91.65M
Cash Flow
Free Cash Flow	10.55M	21.56M	21.23M	31.32M	9.54M	1.52M
Operating Cash Flow	10.55M	21.56M	21.23M	31.32M	9.54M	1.52M
Investing Cash Flow	-67.47M	-4.85M	28.52M	-16.34M	-248.46M	-32.43M
Financing Cash Flow	-109.96M	-34.72M	-68.49M	16.15M	338.54M	40.53M

AFC Gamma Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 3.73
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

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 3.73 is below the 20-day moving average (MA) of 4.35, below the 50-day MA of 4.51, and below the 200-day MA of 6.32, indicating a bearish trend. The MACD of -0.21 indicates Positive momentum. The RSI at 32.15 is Neutral, neither overbought nor oversold. The STOCH value of 8.62 is Positive, 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	70 Outperform	$478.74M	8.87	14.30%	12.80%	-2.90%	282.07%
Sector *	65 Neutral	$2.04B	16.92	4.00%	5.06%	1.74%	-1.63%
AFCG	40 Underperform	$83.60M	4.85	-3.56%	31.65%	-47.74%	-156.57%

AFC Gamma Corporate Events

AFC Gamma Expands Credit Facility to $50 Million

On June 9, 2025, Advanced Flower Capital Inc. announced an expansion of its senior secured revolving credit facility to $50 million, with an additional $20 million commitment from its existing FDIC-insured banking partner. This expansion aims to fund commitments to existing borrowers, originate and participate in commercial loans to cannabis operators, and support general corporate purposes. The facility can be further expanded to $100 million, subject to lender participation. This move underscores the strength of AFC’s platform and strategy, as highlighted by CFO Brandon Hetzel, and is expected to enhance the company’s lending capabilities and strengthen its partnership with the banking partner.