AFC Gamma (AFCG) AI Stock Analysis

• Market Cap: $57.39M
• Dividend Yield: 30.82%
• Average Volume (3M): 451.98K
• Price to Earnings (P/E): ―
• Beta (1Y): 1.18
• 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: 789,435
• 30 Day Avg. Volume: 451,975
• 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: 2.62
• Enterprise Value/Revenue: -68.28
• Enterprise Value/Gross Profit: -68.28
• Enterprise Value/Ebitda: -26.25
• 1Y Price Target: $9.00
• Price Target Upside: 254.33% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 2
• EPS Forecast (FY): 0.68
• Revenue Forecast (FY): $23.98M

• Rating: 47 Neutral
• Price Target: $2.50 ▼(-1.57% Downside)

The score is held down primarily by deteriorating financial performance (losses and negative returns) and bearish technicals (below key moving averages with negative MACD). Offsetting factors include positive cash flow and constructive strategic developments from the REIT-to-BDC transition and pipeline progress, though dividend sustainability and credit quality issues remain key risks.

Positive Factors

BDC Conversion Broadens Mandate

The completed REIT-to-BDC conversion formally broadens the investable universe beyond real-estate-backed cannabis loans, lifting REIT ownership limits and installing BDC governance and service agreements. This structural change enables lasting diversification and new direct-lending opportunities.

Strong Shareholder Support

Overwhelming shareholder approval (94%+) provides durable governance legitimacy for the strategic shift, reducing execution risk from pushback. That alignment helps management implement the BDC strategy, fee framework and operational changes needed to pursue a broader lending agenda over multiple quarters.

Positive Cash Generation

Consistent positive operating and free cash flow (~$14M TTM) offers internal liquidity to fund originations, cover expenses and support restructuring under the BDC model. This cash resilience cushions GAAP losses and provides a base for gradual portfolio growth without immediate reliance on expensive external capital.

Negative Factors

Severe Profitability Deterioration

A deep TTM net loss and extreme revenue contraction signal materially impaired earnings power and elevated volatility. Continued negative margins erode equity and ROE, limiting retained capital to support lending, increasing dilution or financing needs, and threatening long-term dividend and growth sustainability.

Elevated Credit Reserves and Non-Performing Loans

A large CECL reserve equal to 18.7% of loans and recent nonaccruals indicate significant credit stress in the portfolio. High provisions and legal uncertainties around recoveries consume capital and limit repeatable earnings, raising the probability of further write-downs and constrained lending capacity.

Limited Debt Coverage and Moderate Leverage

Moderate leverage combined with weak operating-cashflow coverage (~0.16) limits the company's ability to deleverage or absorb shocks. With constrained debt coverage, sustained losses or higher credit costs could force reliance on external financing, pressuring liquidity and strategic flexibility over coming quarters.

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

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	-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	89.06M	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: 2.54
• 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 2.54 is below the 20-day moving average (MA) of 2.81, below the 50-day MA of 2.92, and below the 200-day MA of 4.00, indicating a bearish trend. The MACD of -0.12 indicates Positive momentum. The RSI at 39.78 is Neutral, neither overbought nor oversold. The STOCH value of 18.64 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	67 Neutral	$461.14M	8.94	14.30%	14.23%	-9.27%	333.85%
Sector *	65 Neutral	$2.17B	12.19	3.79%	4.94%	3.15%	1.96%
AFCG	47 Neutral	$57.39M	-2.44	-12.03%	30.82%	-47.13%	-361.12%

AFC Gamma Corporate Events

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.