AFC Gamma (AFCG) AI Stock Analysis

• Market Cap: $77.73M
• Dividend Yield: 25.07%
• Average Volume (3M): 262.19K
• Price to Earnings (P/E): ―
• Beta (1Y): 1.03
• Revenue Growth: -47.74%
• EPS Growth: -156.57%
• Country: US
• Employees: N/A
• Sector: Real Estate
• Sector Strength: 53
• Industry: REIT - Specialty
• EPS (TTM): 0.15
• Shares Outstanding: 22,594,542
• 10 Day Avg. Volume: 215,568
• 30 Day Avg. Volume: 262,193
• 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: 2.51
• Enterprise Value/Revenue: 6.72
• Enterprise Value/Gross Profit: 7.24
• Enterprise Value/Ebitda: -106.37
• 1Y Price Target: $4.50
• Price Target Upside: 30.81% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 1

• Rating: 45 Neutral
• Price Target: $3.50 ▲(1.74% Upside)

AFC Gamma's overall stock score reflects significant financial challenges, including declining revenue and increased leverage, which weigh heavily on its financial performance. The technical analysis indicates bearish momentum, and while the high dividend yield offers potential income, it is overshadowed by the company's negative P/E ratio and financial instability. The strategic initiatives discussed in the earnings call provide some optimism, but the underlying risks remain substantial.

Positive Factors

Business Model Adaptation

The proposed conversion to a BDC can expand AFC Gamma's investment opportunities beyond real estate-backed assets, potentially increasing its market reach and diversification, which is crucial for long-term growth and adaptation in the evolving cannabis industry.

Credit Facility Expansion

The expansion of the credit facility enhances AFC Gamma's lending capacity, supporting its ability to finance more cannabis operators. This strategic move can strengthen its market position and revenue potential over the medium term.

Potential Cannabis Rescheduling

Cannabis rescheduling could increase capital supply for cannabis companies, improving AFC Gamma's loan recoveries and asset valuations. This regulatory change could significantly enhance the company's operational environment and long-term profitability.

Negative Factors

Revenue Challenges

The absence of reported revenue in 2024 highlights significant operational challenges. This lack of revenue generation can impact AFC Gamma's ability to sustain its business model and meet financial obligations, posing a risk to its long-term stability.

Increased Leverage

Increased leverage indicates higher financial risk, which can strain AFC Gamma's cash flow and limit its financial flexibility. This trend may affect the company's ability to invest in growth opportunities and navigate industry challenges effectively.

Underperforming Loans

Persistent issues with underperforming loans reflect credit risk and potential losses. This situation can erode AFC Gamma's profitability and investor confidence, challenging its long-term financial health and ability to maintain a robust loan portfolio.

AFC Gamma Business Overview & Revenue Model

Company Description

AFC Gamma, Inc. (AFCG) is a real estate investment trust (REIT) that focuses on the commercial real estate sector, primarily within the cannabis industry. The company provides financing solutions, including loans and credit facilities, to licensed operators in the cannabis space, facilitating their growth and operational needs. AFC Gamma aims to capitalize on the expanding legal cannabis market by offering tailored financial products that meet the unique challenges and requirements of cannabis businesses.

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	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: 3.44
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• 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 3.44 is below the 20-day moving average (MA) of 3.64, below the 50-day MA of 3.97, and below the 200-day MA of 5.19, indicating a bearish trend. The MACD of -0.19 indicates Positive momentum. The RSI at 36.25 is Neutral, neither overbought nor oversold. The STOCH value of 39.67 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	71 Outperform	$450.48M	8.42	14.30%	13.80%	-2.90%	282.07%
Sector *	65 Neutral	$2.17B	12.19	3.79%	4.94%	3.15%	1.96%
AFCG	45 Neutral	$77.73M	―	-3.56%	25.07%	-47.74%	-156.57%

AFC Gamma Corporate Events

Afc Gamma’s Earnings Call: Strategic Moves Amid Challenges

In the recent earnings call, Afc Gamma, Inc. presented a mixed sentiment, reflecting both strategic advancements and financial hurdles. The company announced significant changes, such as a proposed conversion to a Business Development Company (BDC) and an expanded credit facility, which could potentially drive growth and diversification. However, these positive developments were overshadowed by financial challenges, including a net loss, underperforming loans, and increased credit reserves, highlighting the ongoing difficulties in the cannabis market.

AFC Gamma’s Financial Stability at Risk: Challenges from Market Volatility and Tenant Performance

Afc Gamma, Inc. faces significant business risks due to its reliance on commercial mortgage loans and real estate-related investments, which are heavily dependent on the net income generated by the underlying properties. Factors such as market volatility, tenant performance, and unforeseen expenses can adversely affect the net operating income, increasing the likelihood of loan delinquencies and defaults. This risk is compounded by the company’s focus on smaller, privately owned businesses, which often have limited access to capital and higher funding costs, making them more vulnerable to financial challenges. Consequently, these dynamics could materially impact Afc Gamma’s financial position and operational results.

Advanced Flower Capital Inc. Reports Q2 2025 Results

Advanced Flower Capital Inc. (Nasdaq: AFCG) is a commercial mortgage real estate investment trust specializing in senior secured mortgage loans and other types of loans to cannabis industry operators in states where medical and/or adult-use cannabis is legalized. Based in West Palm Beach, Florida, the company leverages its management team’s expertise in credit and cannabis to manage loans secured by real estate assets and cash flows.