Innovative Industrial Properties (IIPR) AI Stock Analysis

• Market Cap: $1.58B
• Dividend Yield: 14.24%
• Average Volume (3M): 430.48K
• Price to Earnings (P/E): 10.1
• Beta (1Y): 1.20
• Revenue Growth: -0.32%
• EPS Growth: -4.24%
• Country: US
• Employees: 22
• Sector: Real Estate
• Sector Strength: 80
• Industry: REIT - Industrial
• EPS (TTM): 1.03
• Shares Outstanding: 28,331,833
• 10 Day Avg. Volume: 241,990
• 30 Day Avg. Volume: 430,477
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): 0.00
• Price to Cash Flow (P/CF): 0.00
• P/FCF Ratio: 0.00
• Enterprise Value/Market Cap: 1.31
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: 7.41
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $68.83
• Price Target Upside: 23.66% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 7

Innovative Industrial Properties demonstrates strong financial performance and attractive valuation metrics, supported by high dividend yields and a strategic focus on growth. However, technical indicators show weakness, and there are notable risks related to tenant stability and regulatory uncertainties within the cannabis industry. The company’s strong liquidity and strategic initiatives provide a foundation for cautious optimism.

Positive Factors

Dividend Stability

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

Property 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.

Negative Factors

Dividend Risk

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

Earnings Pressure

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

Tenant Defaults

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 makes money primarily through leasing its properties to state-licensed medical-use cannabis operators. The company's revenue model is based on a triple-net lease structure, where tenants are responsible for property costs, taxes, insurance, and maintenance, ensuring steady income with minimal operational expenses for IIPR. The company strategically acquires properties from cannabis operators and leases them back, providing capital to the operators while securing long-term rental agreements. Additionally, IIPR may engage in property improvements, which are financed through increased rental agreements. This business model supports stable cash flow and growth as the cannabis industry expands. IIPR's success is closely tied to the regulatory environment for cannabis, its ability to identify and purchase valuable real estate, and the creditworthiness and operational success of its tenants.

Innovative Industrial Properties Financial Statement Overview

Summary

Innovative Industrial Properties showcases strong financial health, with consistent revenue growth, robust profitability, a solid balance sheet, and effective cash flow management. Despite a slight revenue dip, the overall financial position remains sound.

Income Statement

Innovative Industrial Properties has shown consistent revenue growth over the years, with a significant leap from 2020 to 2021. The gross profit margin remains robust, indicating efficient cost management. The net profit margin is high, reflecting strong profitability, although there was a slight decrease in revenue from 2023 to 2024. EBIT and EBITDA margins are also healthy, supporting operational efficiency and profitability.

Balance Sheet

The company maintains a strong balance sheet with no debt in 2024, reflecting a conservative financial strategy and high financial stability. The equity ratio is substantial, indicating a strong equity base relative to total assets. Return on equity is impressive, showcasing the company's ability to generate profits from its equity base.

Cash Flow

Operating cash flow has been consistently strong, supporting the company's ability to maintain operations and fund growth. Free cash flow has shown improvement since 2022, but fluctuations in investing and financing cash flows suggest strategic investments and capital management. The operating cash flow to net income ratio is favorable, indicating effective cash conversion.

Breakdown
Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
308.52M	309.51M	276.36M	204.55M	116.90M
	Gross Profit
280.05M	284.61M	265.84M	200.11M	111.94M
	EBIT
168.34M	174.59M	169.62M	135.37M	69.74M
	EBITDA
248.72M	248.88M	230.92M	177.15M	97.76M
	Net Income Common Stockholders
159.86M	165.59M	154.39M	113.99M	65.73M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
146.25M	140.25M	87.12M	81.10M	126.01M
	Total Assets
2.38B	2.39B	2.41B	2.08B	1.77B
	Total Debt
297.87M	300.88M	301.50M	326.09M	137.75M
	Net Debt
151.62M	160.63M	214.37M	245.00M	11.74M
	Total Liabilities
441.99M	438.12M	452.94M	472.90M	243.11M
	Stockholders Equity
1.94B	1.95B	1.96B	1.61B	1.52B
Cash Flow		Free Cash Flow
258.45M	255.54M	-139.75M	-185.79M	-419.01M
	Operating Cash Flow
258.45M	255.54M	234.13M	188.75M	110.81M
	Investing Cash Flow
-56.00M	-6.79M	-396.20M	-384.09M	-1.03B
	Financing Cash Flow
-197.90M	-195.63M	164.22M	155.76M	924.99M

Innovative Industrial Properties Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 55.66
• 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 Neutral. The current price of 55.66 is above the 20-day moving average (MA) of 52.63, below the 50-day MA of 58.67, and below the 200-day MA of 89.51, indicating a neutral trend. The MACD of -0.78 indicates Negative momentum. The RSI at 52.44 is Neutral, neither overbought nor oversold. The STOCH value of 52.17 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for IIPR.

Innovative Industrial Properties Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
PLYM	76 Outperform	$701.62M	5.03	26.05%	6.22%	-3.48%	615.20%
STAG	73 Outperform	$6.33B	25.43	7.15%	4.43%	8.81%	33.30%
IIPR	72 Outperform	$1.58B	10.11	7.82%	14.24%	-0.32%	-4.24%
REXR	69 Neutral	$8.12B	27.87	3.35%	4.99%	18.02%	12.12%
LXP	64 Neutral	$2.36B	41.19	2.98%	6.65%	5.68%	358.78%
Sector *	60 Neutral	$2.81B	11.39	0.21%	8508.43%	6.31%	-14.32%
ILPT	52 Neutral	$190.49M	―	-15.86%	1.37%	0.55%	12.36%

Innovative Industrial Properties Corporate Events

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.

Spark’s Take on IIPR Stock

According to Spark, TipRanks’ AI Analyst, IIPR is a Outperform.

Innovative Industrial Properties demonstrates strong financial performance and attractive valuation metrics, supported by high dividend yields and a strategic focus on growth. However, technical indicators show weakness, and there are notable risks related to tenant stability and regulatory uncertainties within the cannabis industry. The company’s strong liquidity and strategic initiatives provide a foundation for cautious optimism.

To see Spark’s full report on IIPR stock, click here.

Innovative Industrial Properties Reports Strong 2024 Financials

On February 19, 2025, Innovative Industrial Properties announced its financial results for the fourth quarter and full-year 2024, with revenues totaling $308.5 million and an increase in its common stock dividends. The company has strengthened its financial position by enhancing its credit facility and expanding its property portfolio to 109 properties across 19 states, reflecting a strategic focus on growth in the cannabis real estate sector.

Innovative Industrial Properties Announces Board Member Retirements

David Stecher and Mary Curran, members of the Board of Directors for Innovative Industrial Properties, announced they will retire and not seek re-election at the company’s 2025 annual shareholders meeting. Their decisions are not due to any disagreements with the company, and CEO Paul Smithers expressed gratitude for their contributions.