Innovative Industrial Properties (IIPR) AI Stock Analysis

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Innovative Industrial Properties

(NYSE:IIPR)

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Neutral 69 (OpenAI - 5.2)

Rating:69Neutral

Price Target:

$56.00

▲(10.21% Upside)

Innovative Industrial Properties scores a 69, driven by strong profitability and a solid balance sheet. The stock's valuation is attractive with a low P/E ratio and high dividend yield. However, challenges in revenue growth, cash flow, and tenant issues pose risks. The technical indicators suggest bullish momentum, but investors should be cautious of potential overbought conditions.

Positive Factors

Strong Balance Sheet

A strong balance sheet with low leverage and high coverage ratios ensures financial stability and flexibility for future growth and investments.

Strategic Diversification

Investing in life sciences diversifies revenue streams and reduces dependency on the cannabis sector, enhancing long-term resilience and growth potential.

Financial Flexibility

Securing a new credit facility enhances liquidity and financial flexibility, enabling the company to pursue strategic opportunities and manage risks effectively.

Negative Factors

Tenant Defaults

High tenant default rates can impact revenue stability and cash flow, posing risks to financial performance and necessitating active management of tenant relationships.

Revenue Decline

A declining revenue growth trend may signal market saturation or operational challenges, requiring strategic adjustments to sustain growth and profitability.

Legal and Receivership Challenges

Legal disputes and receivership issues can divert resources and focus, potentially impacting operational efficiency and financial outcomes.

Innovative Industrial Properties (IIPR) vs. SPDR S&P 500 ETF (SPY)

Market Cap

$1.42B

Dividend Yield13.07%

Average Volume (3M)459.86K

Price to Earnings (P/E)12.0

Beta (1Y)0.80

Revenue Growth-11.22%

EPS Growth-24.64%

CountryUS

Employees21

SectorReal Estate

Sector Strength53

IndustryREIT - Industrial

Share Statistics

EPS (TTM)0.97

Shares Outstanding28,022,976

10 Day Avg. Volume330,922

30 Day Avg. Volume459,862

Financial Highlights & Ratios

PEG Ratio-2.82

Price to Book (P/B)0.97

Price to Sales (P/S)6.10

P/FCF Ratio7.28

Enterprise Value/Market Cap1.31

Enterprise Value/Revenue6.73

Enterprise Value/Gross Profit7.55

Enterprise Value/Ebitda8.57

Forecast

1Y Price Target

$57.25

Price Target Upside12.67% Upside

Rating ConsensusHold

Number of Analyst Covering5

EPS Forecast (FY)4.31

Revenue Forecast (FY)$268.99M

Innovative Industrial Properties Business Overview & Revenue Model

Company DescriptionInnovative 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 MoneyIIPR generates revenue primarily through long-term leases with cannabis operators, which are structured as sale-leaseback agreements. In these arrangements, IIPR purchases properties from cannabis companies and leases them back, allowing these operators to free up capital for operational purposes. The company typically earns rental income, which is a significant portion of its revenue. Additionally, IIPR may benefit from property appreciation and potential growth in the cannabis sector. The company's strategy also involves expanding its portfolio through new acquisitions and partnerships with cannabis operators, further enhancing its revenue streams.

Innovative Industrial Properties Key Performance Indicators (KPIs)

Any

Rentable Space

Rentable Space
Measures the total square footage available for leasing, indicating potential revenue growth and capacity to expand tenant relationships.

Chart InsightsInnovative Industrial Properties' rentable space has shown a steady increase, recently reaching 8.97 million square feet. Despite this growth, the company faces challenges with tenant defaults impacting revenue. The strategic investment in IQHQ marks a significant diversification move beyond cannabis, expected to enhance AFFO with a 14% yield. This could offset some risks associated with the cannabis sector's uncertainties and regulatory hurdles. The company's strong financial position and successful re-leasing efforts further support its resilience and potential for long-term growth.

Data provided by:

The Fly

Innovative Industrial Properties Earnings Call Summary

Earnings Call Date:Nov 03, 2025

(Q3-2025)

% Change Since: |

Next Earnings Date:Feb 25, 2026

Earnings Call Sentiment Neutral

The earnings call highlighted strategic investments and financial strength, particularly with the investment in IQHQ and new credit facilities. However, the company continues to face challenges with tenant defaults and legal proceedings, as well as uncertainties in both the cannabis and life science markets.

Q3-2025 Updates

Positive Updates

Investment in IQHQ

Completed initial $105 million investment into IQHQ, a life science real estate platform, expected to provide significant earnings accretion and diversify the portfolio beyond cannabis.

New Secured Revolving Credit Facility

Closed a new $100 million secured revolving credit facility to support the investment into IQHQ, reflecting confidence in the company's platform and balance sheet.

Significant Legal Victory

U.S. Court of Appeals for the Third Circuit affirmed the dismissal of a federal securities class action against IIP, allowing the company to focus on strategy execution.

Revenue Increase

Total revenues for the third quarter were $64.7 million, a 3% increase compared to the prior quarter.

Strong Balance Sheet

Maintained a low leverage capital structure with a low debt to gross assets ratio of 13% and a robust debt service coverage ratio exceeding 11x.

Negative Updates

Receivership and Litigation Issues

Ongoing receivership proceedings for 4Front Ventures and Gold Flora, with significant efforts to regain control of properties from PharmaCann in multiple states.

Tenant Health and Defaults

Approximately 20% of ABR is not rent-paying, including recent defaults accounting for less than 1% of revenue.

Federal Cannabis Reform Uncertainty

Despite political momentum, there is uncertainty around the timing and impact of federal cannabis reform and rescheduling.

Life Science Sector Challenges

Despite optimism, the life science sector, particularly IQHQ, still faces potential challenges requiring strategic capital allocation.

Company Guidance

During the Q3 2025 earnings call for Innovative Industrial Properties, Inc., the company provided significant guidance on its strategic investments and financial performance. The company completed a $105 million initial investment into IQHQ, involving a $100 million revolving credit facility and $5 million in preferred stock, with an additional $165 million commitment expected by Q2 2027. This investment is anticipated to enhance diversification and deliver accretive returns. The company also secured a new $100 million secured revolving credit facility, reflecting strong lender confidence. The cannabis portfolio faced challenges, with receivership proceedings ongoing for 4Front Ventures and Gold Flora, and legal disputes with PharmaCann, although positive legal outcomes were noted. In terms of financial performance, the company reported Q3 revenues of $64.7 million, a 3% increase from the prior quarter, with adjusted funds from operations at $48.3 million or $1.71 per share. The balance sheet was described as robust, with $2.7 billion in gross assets and a debt service coverage ratio exceeding 11x. Additionally, the company issued preferred stock and plans to refinance bonds maturing next year, maintaining a focus on strategic growth and conservative financial management.

Innovative Industrial Properties Financial Statement Overview

Summary

Innovative Industrial Properties demonstrates strong profitability and a solid balance sheet with low leverage. However, declining revenue growth and free cash flow pose potential risks. The company should focus on reversing the revenue decline and improving cash flow generation to sustain its financial health.

Income Statement

Positive

Innovative Industrial Properties shows strong profitability with a high gross profit margin of 89.2% TTM and a net profit margin of 45.4% TTM. However, the revenue growth rate has declined by 4.1% TTM, indicating potential challenges in revenue expansion. The EBIT and EBITDA margins remain robust at 38.9% and 76.4% TTM, respectively, reflecting efficient operational management.

Balance Sheet

Positive

The company maintains a low debt-to-equity ratio of 0.18 TTM, suggesting conservative leverage. Return on equity is moderate at 6.6% TTM, indicating reasonable profitability relative to shareholder equity. The equity ratio is strong, demonstrating a solid capital structure with a significant portion of assets financed by equity.

Cash Flow

Neutral

Operating cash flow is healthy, but free cash flow has decreased by 8.6% TTM, which could impact future investments. The operating cash flow to net income ratio is not available, but free cash flow to net income is stable at 1.0, indicating that the company is generating sufficient cash relative to its net income.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	276.04M	308.52M	309.51M	276.36M	204.55M	116.90M
Gross Profit	246.24M	280.05M	284.61M	265.84M	200.11M	111.94M
EBITDA	216.78M	248.72M	248.88M	232.64M	172.15M	100.24M
Net Income	126.43M	161.66M	165.59M	154.39M	113.99M	65.73M
Balance Sheet
Total Assets	2.34B	2.38B	2.39B	2.41B	2.08B	1.77B
Cash, Cash Equivalents and Short-Term Investments	36.67M	146.25M	140.25M	87.12M	81.10M	126.01M
Total Debt	340.23M	297.87M	300.88M	301.50M	326.09M	137.75M
Total Liabilities	474.57M	441.99M	438.12M	452.94M	472.90M	243.11M
Stockholders Equity	1.86B	1.94B	1.95B	1.96B	1.61B	1.52B
Cash Flow
Free Cash Flow	188.91M	258.45M	255.54M	-139.75M	188.75M	-419.01M
Operating Cash Flow	206.35M	258.45M	255.54M	234.13M	188.75M	110.81M
Investing Cash Flow	-136.14M	-56.00M	-6.79M	-396.20M	-384.09M	-1.03B
Financing Cash Flow	-180.66M	-197.90M	-195.63M	164.22M	155.76M	924.99M

Innovative Industrial Properties Technical Analysis

Technical Analysis Sentiment

Neutral

Last Price50.81

Price Trends

50DMA

50.69

Positive

100DMA

52.23

Negative

200DMA

51.72

Negative

Market Momentum

MACD

-0.33

Negative

RSI

50.26

Neutral

STOCH

64.17

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 50.81 is below the 20-day moving average (MA) of 50.84, above the 50-day MA of 50.69, and below the 200-day MA of 51.72, indicating a neutral trend. The MACD of -0.33 indicates Negative momentum. The RSI at 50.26 is Neutral, neither overbought nor oversold. The STOCH value of 64.17 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for IIPR.

Innovative Industrial Properties Risk Analysis

Innovative Industrial Properties disclosed 84 risk factors in its most recent earnings report. Innovative Industrial Properties reported the most risks in the "Finance & Corporate" category.

Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Latest Risks Added 0 New Risks

Innovative Industrial Properties Peers Comparison

Overall Rating

UnderperformOutperform

Sector (65)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
STAG	75 Outperform	$7.04B	29.12	7.17%	4.02%	9.62%	31.08%
FR	74 Outperform	$8.07B	33.08	8.97%	2.98%	9.66%	-23.17%
LXP	74 Outperform	$2.97B	26.50	5.62%	5.33%	6.98%	465.32%
IIPR	69 Neutral	$1.42B	11.97	6.49%	13.07%	-11.22%	-24.64%
Sector *	65 Neutral	$2.17B	12.19	3.79%	4.94%	3.15%	1.96%
PLYM	64 Neutral	$989.11M	10.99	20.14%	4.39%	-4.99%	10123.98%
ILPT	50 Neutral	$399.96M	-4.49	-16.39%	2.20%	1.08%	14.30%

* Real Estate Sector Average

Performance Comparison

IIPR

Innovative Industrial Properties

50.81

-12.44

-19.67%

STAG

Stag Industrial

37.44

3.83

11.40%

First Industrial Realty

59.31

7.48

14.43%

LXP

LXP Industrial Trust

50.38

10.11

25.11%

PLYM

Plymouth Industrial Reit

21.87

5.34

32.30%

ILPT

Industrial Logistics Properties

6.03

2.39

65.66%

Innovative Industrial Properties Corporate Events

Business Operations and StrategyFinancial DisclosuresLegal ProceedingsPrivate Placements and Financing

Innovative Industrial Properties Invests $270M in IQHQ

Neutral

Nov 4, 2025

On November 3, 2025, Innovative Industrial Properties announced its third-quarter results, highlighting a $270 million investment in IQHQ, a life science real estate platform, marking its first venture outside the cannabis industry. This strategic move aims to diversify and enhance shareholder value. The company also secured a new $100 million credit facility, strengthening its financial flexibility. Despite a 15% revenue decline due to tenant defaults, IIP maintains a strong balance sheet with a 13% debt to total gross assets ratio and continues to pursue legal actions against defaulting tenants to recover losses.

The most recent analyst rating on (IIPR) stock is a Hold with a $58.00 price target. To see the full list of analyst forecasts on Innovative Industrial Properties stock, see the IIPR Stock Forecast page.

Glossary

BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.Date of analysis: Dec 13, 2025