Innovative Industrial Properties (IIPR) AI Stock Analysis

• Market Cap: $1.56B
• Dividend Yield: 13.69%
• Average Volume (3M): 246.26K
• Price to Earnings (P/E): 10.7
• Beta (1Y): 1.20
• Revenue Growth: -1.33%
• EPS Growth: -8.62%
• Country: US
• Employees: 21
• Sector: Real Estate
• Sector Strength: 63
• Industry: REIT - Industrial
• EPS (TTM): 1.03
• Shares Outstanding: 28,011,229
• 10 Day Avg. Volume: 214,369
• 30 Day Avg. Volume: 246,261
• PEG Ratio: -1.87
• Price to Book (P/B): 0.84
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 6.19
• Enterprise Value/Market Cap: 0.94
• Enterprise Value/Revenue: 1.19
• Enterprise Value/Gross Profit: 5.32
• Enterprise Value/Ebitda: 1.49
• 1Y Price Target: $52.00
• Price Target Upside: -8.16% Downside
• Rating Consensus: Hold
• Number of Analyst Covering: 5

• Rating: 75 Outperform
• Price Target: $62.00 ▲( 9.50% Upside)

Innovative Industrial Properties scores well in financial performance due to strong profitability and a solid balance sheet. Valuation is attractive with a low P/E ratio and high dividend yield, offering potential returns. Technical analysis suggests caution with bearish momentum, and the earnings call reveals proactive management amidst revenue challenges. Recent corporate events further enhance financial flexibility and growth prospects. Overall, the stock presents a balanced risk-reward profile with opportunities for growth in the long term.

Positive Factors

Acquisition

IIPR acquired a property in Maryland comprising 23,000 square feet of industrial space for $5.6mm and executed a long-term lease for the entire property.

Dividend

IIPR maintained its quarterly dividend of $1.90 after increasing it by $0.08 in 1Q24.

Negative Factors

Dividend Risk

The current quarterly dividend is at risk due to reduced earnings power and the high payout ratio.

Earnings Impact

PharmaCann, IIPR’s largest tenant, being in default significantly affects the company's earnings power.

Rental Income

Three tenants and one loan borrower were declared in default after failing to pay contractual obligations, which impacts 27% of IIPR's rental income.

Innovative Industrial Properties Business Overview & Revenue Model

Company Description

Innovative Industrial Properties, Inc. is a self-advised Maryland corporation focused on the acquisition, ownership and management of specialized properties leased to experienced, state-licensed operators for their regulated medical-use cannabis facilities. Innovative Industrial Properties, Inc. has elected to be taxed as a real estate investment trust, commencing with the year ended December 31, 2017.

How the Company Makes Money

Innovative Industrial Properties generates revenue primarily through leasing its properties to tenants in the regulated cannabis industry. The company's primary revenue stream is rental income, which comes from long-term, triple-net lease agreements with state-licensed cannabis operators. These leases typically include annual rent escalations, providing consistent and growing income. Additionally, IIPR benefits from property acquisitions and sale-leaseback transactions, where it purchases facilities from cannabis operators and leases them back, thereby providing capital to these operators. The company's focus on the burgeoning cannabis sector and its strategic partnerships with experienced operators are significant factors contributing to its earnings.

Innovative Industrial Properties Financial Statement Overview

Summary

Innovative Industrial Properties demonstrates strong financial performance with robust profitability margins and efficient cash flow generation. The company's low debt-to-equity ratio and competitive return on equity reflect prudent financial management, though attention to revenue growth is necessary for sustained long-term profitability.

Income Statement

Innovative Industrial Properties demonstrates strong profitability with consistent gross and net profit margins. The TTM gross profit margin is 90.44% and net profit margin is 50.30%, indicating robust cost management and profitability. Despite a slight decline in revenue from the previous year, the company's EBIT and EBITDA margins remain impressive at 52.60% and 79.30%, respectively, reflecting efficient operational performance.

Balance Sheet

The company's balance sheet is solid, with a low debt-to-equity ratio of 0.15, indicating prudent financial leverage. The equity ratio stands at 81.68%, showcasing strong ownership of assets by equity holders. Return on equity is also competitive at 7.98% for the TTM period, reflecting effective use of shareholders' capital. However, modest growth in stockholders' equity warrants attention.

Cash Flow

Cash flow health is robust, with a significant operating cash flow to net income ratio of 1.57, suggesting effective conversion of income into cash. The free cash flow has grown positively, with a TTM free cash flow of $241 million, indicating ample liquidity to support operations and growth initiatives. Consistent positive free cash flow contrasts with earlier years, showing a strong turnaround.

Breakdown
TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
304.79M	308.52M	309.51M	276.36M	204.55M	116.90M
	Gross Profit
275.64M	280.05M	284.61M	265.84M	200.11M	111.94M
	EBIT
160.28M	168.34M	174.59M	169.62M	135.37M	69.74M
	EBITDA
241.72M	248.72M	248.88M	230.92M	177.15M	97.76M
	Net Income Common Stockholders
153.31M	161.66M	165.59M	154.39M	113.99M	65.73M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
153.50M	146.25M	140.25M	87.12M	81.10M	126.01M
	Total Assets
2.40B	2.38B	2.39B	2.41B	2.08B	1.77B
	Total Debt
296.80M	297.87M	300.88M	301.50M	326.09M	137.75M
	Net Debt
143.29M	151.62M	160.63M	214.37M	245.00M	11.74M
	Total Liabilities
444.09M	441.99M	438.12M	452.94M	472.90M	243.11M
	Stockholders Equity
1.96B	1.94B	1.95B	1.96B	1.61B	1.52B
Cash Flow		Free Cash Flow
241.12M	258.45M	255.54M	-139.75M	-185.79M	-419.01M
	Operating Cash Flow
241.12M	258.45M	255.54M	234.13M	188.75M	110.81M
	Investing Cash Flow
-58.76M	-56.00M	-6.79M	-396.20M	-384.09M	-1.03B
	Financing Cash Flow
-207.86M	-197.90M	-195.63M	164.22M	155.76M	924.99M

Innovative Industrial Properties Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 56.62
• 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 IIPR, the sentiment is Negative. The current price of 56.62 is above the 20-day moving average (MA) of 55.13, above the 50-day MA of 55.70, and below the 200-day MA of 86.43, indicating a neutral trend. The MACD of 0.20 indicates Negative momentum. The RSI at 50.45 is Neutral, neither overbought nor oversold. The STOCH value of 32.23 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for IIPR.

Innovative Industrial Properties Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
PLYM	83 Outperform	$733.39M	5.23	26.05%	6.03%	-3.48%	615.20%
STAG	78 Outperform	$6.49B	25.73	7.15%	4.35%	8.81%	33.30%
IIPR	75 Outperform	$1.56B	10.68	7.78%	13.69%	-1.33%	-8.62%
REXR	69 Neutral	$8.21B	28.17	3.35%	4.85%	18.02%	12.12%
LXP	68 Neutral	$2.43B	42.05	2.98%	6.44%	5.68%	358.78%
Sector *	60 Neutral	$2.76B	10.59	0.51%	8507.90%	5.51%	-19.44%
ILPT	57 Neutral	$203.72M	―	-15.86%	1.30%	0.55%	12.36%

Innovative Industrial Properties Corporate Events

Innovative Industrial Properties Expands Equity Distribution Agreements

On May 13, 2025, Innovative Industrial Properties, Inc. and its operating partnership expanded their equity distribution agreements by including Stifel, Nicolaus & Company, Incorporated and A.G.P. / Alliance Global Partners as additional sales agents and forward sellers. This expansion allows the company to offer and sell shares of its common and preferred stock, with approximately $479.8 million remaining available for sale, potentially enhancing its financial flexibility and market positioning.

The most recent analyst rating on (IIPR) stock is a Sell with a $70.00 price target. To see the full list of analyst forecasts on Innovative Industrial Properties stock, see the IIPR Stock Forecast page.

Innovative Industrial Properties Reports Q1 2025 Results

Innovative Industrial Properties, Inc. reported its first quarter 2025 results, highlighting total revenues of $71.7 million and net income of $30.3 million. The company faced challenges with tenant defaults, impacting revenue, but continued to expand its portfolio with new leases and property acquisitions, reflecting ongoing efforts to strengthen its position in the regulated cannabis industry.