Innovative Industrial Properties (IIPR) AI Stock Analysis

• Market Cap: $1.48B
• Dividend Yield: 14.39%
• Average Volume (3M): 301.80K
• Price to Earnings (P/E): 11.4
• Beta (1Y): 1.06
• Revenue Growth: -7.80%
• EPS Growth: -18.78%
• Country: US
• Employees: 21
• Sector: Real Estate
• Sector Strength: 53
• Industry: REIT - Industrial
• EPS (TTM): 0.86
• Shares Outstanding: 28,022,700
• 10 Day Avg. Volume: 237,470
• 30 Day Avg. Volume: 301,795
• PEG Ratio: -2.82
• Price to Book (P/B): 0.97
• Price to Sales (P/S): 6.10
• P/FCF Ratio: 7.28
• Enterprise Value/Market Cap: 1.21
• Enterprise Value/Revenue: 6.20
• Enterprise Value/Gross Profit: 6.90
• Enterprise Value/Ebitda: 7.93
• 1Y Price Target: $67.50
• Price Target Upside: 23.54% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 3

• Rating: 66 Neutral
• Price Target: $58.00 ▲(6.15% Upside)

Innovative Industrial Properties' strong valuation and profitability are offset by revenue declines and challenges in the cannabis sector. The strategic investment in IQHQ provides diversification and potential growth, but tenant defaults and sector-specific risks remain concerns.

Positive Factors

Strategic Diversification

The $270 million investment in IQHQ marks IIPR's first expansion outside the cannabis industry, providing diversification and potential growth in the life sciences sector, which could enhance long-term financial stability and reduce reliance on the cannabis market.

Strong Balance Sheet

IIPR's low leverage and robust liquidity provide financial flexibility, enabling the company to pursue growth opportunities and withstand potential market volatility, which supports its long-term operational resilience.

High Profit Margins

IIPR's strong profit margins indicate efficient operational management and the ability to generate substantial profits from its revenue, which is crucial for sustaining long-term growth and shareholder value.

Negative Factors

Revenue Decline

The decline in revenue, driven by tenant defaults, suggests potential challenges in maintaining growth momentum, which could impact the company's ability to sustain its financial performance over the long term.

Tenant Defaults

Tenant defaults pose significant risks to IIPR's revenue stability and cash flow, potentially leading to increased legal costs and impacting the company's ability to maintain its current financial health.

Cannabis Market Challenges

Ongoing challenges in the cannabis market, including regulatory issues and competition from the illicit market, could hinder IIPR's growth prospects and affect its ability to attract and retain tenants, impacting long-term business sustainability.

Innovative Industrial Properties Business Overview & Revenue Model

Company Description

Innovative Industrial Properties, Inc. (IIPR) is a real estate investment trust (REIT) that specializes in the acquisition, ownership, and management of specialized industrial properties leased to experienced operators in the regulated cannabis industry. The company focuses on properties that are designed for the cultivation, processing, and distribution of cannabis products, providing a unique investment opportunity in a rapidly growing sector. IIPR's portfolio includes properties across various states in the U.S., enabling it to capitalize on the increasing legalization and acceptance of cannabis.

How the Company Makes Money

IIPR generates revenue primarily through long-term leases with its tenants, who are licensed cannabis operators. The company typically structures its leases with favorable terms, including rent escalations and options for tenants to purchase the properties at predetermined prices. This creates a stable and predictable revenue stream. Additionally, IIPR benefits from the increasing demand for cannabis-related real estate as more states legalize cannabis use, leading to higher occupancy rates and potential rent increases. The company's approach also includes strategic acquisitions of properties that align with its investment criteria, which further enhances its revenue potential. Partnerships with reputable cannabis operators contribute to its financial stability and growth, as these tenants are often well-established in their markets and have demonstrated success in their operations.

Innovative Industrial Properties Financial Statement Overview

Summary

Innovative Industrial Properties maintains a strong financial position with impressive profit margins and efficient cash flow generation. The company effectively manages debt levels, supporting stability and growth potential. However, attention to revenue growth is necessary to sustain long-term profitability and shareholder value.

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	287.88M	308.52M	309.51M	276.36M	204.55M	116.90M
Gross Profit	258.74M	280.05M	284.61M	265.84M	200.11M	111.94M
EBITDA	225.33M	248.72M	248.88M	230.92M	177.15M	97.76M
Net Income	137.34M	161.66M	165.59M	154.39M	113.99M	65.73M
Balance Sheet
Total Assets	2.31B	2.38B	2.39B	2.41B	2.08B	1.77B
Cash, Cash Equivalents and Short-Term Investments	99.67M	146.25M	140.25M	87.12M	81.10M	126.01M
Total Debt	289.86M	297.87M	300.88M	301.50M	326.09M	137.75M
Total Liabilities	424.65M	441.99M	438.12M	452.94M	472.90M	243.11M
Stockholders Equity	1.88B	1.94B	1.95B	1.96B	1.61B	1.52B
Cash Flow
Free Cash Flow	225.37M	258.45M	255.54M	-139.75M	-185.79M	-419.01M
Operating Cash Flow	225.37M	258.45M	255.54M	234.13M	188.75M	110.81M
Investing Cash Flow	-20.07M	-56.00M	-6.79M	-396.20M	-384.09M	-1.03B
Financing Cash Flow	-226.46M	-197.90M	-195.63M	164.22M	155.76M	924.99M

Innovative Industrial Properties Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 54.64
• 50DMA: Negative
• 100DMA: Positive
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

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 54.64 is above the 20-day moving average (MA) of 54.03, above the 50-day MA of 53.83, and below the 200-day MA of 55.10, indicating a bearish trend. The MACD of -0.19 indicates Positive momentum. The RSI at 47.18 is Neutral, neither overbought nor oversold. The STOCH value of 19.20 is Positive, 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	―	$994.12M	7.65	25.64%	4.38%	-3.63%	436.37%
LXP	―	$2.82B	34.51	4.15%	5.67%	6.64%	210.89%
STAG	―	$7.36B	30.57	6.89%	3.86%	8.56%	22.20%
FR	―	$7.66B	31.38	8.97%	3.01%	9.66%	-23.17%
IIPR	―	$1.48B	11.42	7.04%	14.39%	-7.80%	-18.78%
Sector *	―	$2.17B	12.19	3.79%	4.94%	3.15%	1.96%
ILPT	―	$400.01M	-4.28	-16.16%	1.99%	0.36%	11.92%

Innovative Industrial Properties Corporate Events

Innovative Industrial Properties Secures $100M Credit Facility

On October 3, 2025, Innovative Industrial Properties, Inc. announced the closing of a new $100 million secured revolving credit facility with East West Bank, aimed at supporting strategic growth in the life science industry. The facility, which includes a $35 million accordion feature, enhances the company’s financial flexibility and positions it to capitalize on the long-term strength of the life science sector, reflecting a significant commitment of capital from its banking partner.

The most recent analyst rating on (IIPR) stock is a Buy with a $61.00 price target. To see the full list of analyst forecasts on Innovative Industrial Properties stock, see the IIPR Stock Forecast page.

Innovative Industrial Properties Invests in Life Sciences

Innovative Industrial Properties, Inc. announced the completion of its initial investment into IQHQ, Inc., a life science real estate platform, on September 30, 2025. The investment, totaling $105 million, includes a $100 million revolving credit facility and $5 million in preferred stock. This marks the company’s first investment outside the cannabis industry, providing diversification to its portfolio. Additionally, the company secured a commitment for a $100 million revolving credit facility, expected to close in the fourth quarter of 2025, enhancing its financial flexibility.

The most recent analyst rating on (IIPR) stock is a Hold with a $61.00 price target. To see the full list of analyst forecasts on Innovative Industrial Properties stock, see the IIPR Stock Forecast page.

Innovative Industrial Properties Invests $270M in IQHQ

On August 6, 2025, Innovative Industrial Properties announced a strategic investment of up to $270 million in IQHQ, a life science real estate platform. This investment, comprising a revolving credit facility and preferred stock purchase, is expected to enhance earnings for IIP shareholders and diversify its portfolio beyond cannabis. The transaction positions IIP to capitalize on the life science industry’s growth, with potential benefits from warrants and real estate acquisitions from IQHQ.

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 Q2 2025 Earnings

Innovative Industrial Properties, Inc. is a real estate investment trust (REIT) that specializes in the acquisition, ownership, and management of industrial properties leased to operators in the regulated cannabis industry across the United States.

Innovative Industrial Properties’ Earnings Call: Growth Amid Challenges

Innovative Industrial Properties Balances Growth and Challenges in Latest Earnings Call

Innovative Industrial Properties Reports Q2 2025 Financial Results

On August 6, 2025, Innovative Industrial Properties reported its second quarter 2025 results, highlighting a decrease in total revenues to $62.9 million, primarily due to tenant defaults and property sales. The company repurchased $20 million of common stock and maintained strong liquidity exceeding $190 million. Despite challenges, IIP continues to focus on improving long-term financial performance by replacing underperforming tenants with more stable operators and actively managing its property portfolio.

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.