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NewLake Capital Partners (NLCP)
OTHER OTC:NLCP
US Market

NewLake Capital Partners (NLCP) AI Stock Analysis

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NewLake Capital Partners

(OTC:NLCP)

75Outperform
NewLake Capital Partners demonstrates strong financial performance with a solid growth trajectory and a high dividend yield, which are major strengths. However, technical indicators suggest potential downward pressure on the stock, and earnings call insights reveal challenges in tenant payments and regulatory uncertainties in the cannabis sector, tempering the overall outlook.

NewLake Capital Partners (NLCP) vs. S&P 500 (SPY)

NewLake Capital Partners Business Overview & Revenue Model

Company DescriptionNewLake Capital Partners (NLCP) is a real estate investment trust (REIT) that focuses on acquiring and leasing industrial and retail properties primarily to state-licensed cannabis operators. The company operates within the burgeoning cannabis sector, providing vital real estate capital to businesses in the medical and adult-use cannabis industries. By offering a tailored leaseback model, NLCP enables cannabis companies to access the capital they need to grow their operations while retaining the flexibility of property use.
How the Company Makes MoneyNewLake Capital Partners makes money by acquiring properties and leasing them to cannabis operators under long-term, triple-net lease agreements. These agreements require tenants to cover property expenses such as taxes, insurance, and maintenance, providing NLCP with a stable and predictable cash flow. The company's revenue is primarily derived from rental income, which is typically subject to annual escalations, ensuring growth over time. Additionally, NLCP may benefit from property value appreciation and strategic partnerships within the cannabis sector, further enhancing their earnings potential.

NewLake Capital Partners Financial Statement Overview

Summary
NewLake Capital Partners shows strong financial health with robust revenue growth, high profitability margins, and an impressive balance sheet devoid of debt. The company exhibits solid cash flow generation, although past fluctuations indicate some investment volatility. Overall, the financials paint a picture of a stable and growth-oriented outlook with minimal financial risk.
Income Statement
85
Very Positive
NewLake Capital Partners shows strong growth in revenue and profitability. The gross profit margin is exceptionally high, indicating efficient cost management. Net profit margin and EBIT margins are robust, suggesting strong operational performance. The revenue growth rate has been positive year-over-year, showcasing a healthy upward trajectory in sales.
Balance Sheet
90
Very Positive
The company maintains a healthy balance sheet with zero total debt, resulting in a strong equity ratio. The debt-to-equity ratio is exceptionally low, indicating minimal leverage risk. Return on equity is impressive, reflecting effective use of shareholders' funds. The high stockholders' equity compared to total assets suggests financial stability.
Cash Flow
80
Positive
Operating cash flow is strong and consistently covers net income, indicating solid cash generation from core operations. Free cash flow has shown significant growth over the years, reflecting efficient capital management. However, fluctuations in free cash flow in earlier years highlight potential investment volatility.
Breakdown
Dec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income StatementTotal Revenue
50.13M47.30M44.79M28.20M11.66M
Gross Profit
49.89M46.65M44.73M28.06M-3.96M
EBIT
26.79M24.66M22.52M11.49M436.00K
EBITDA
41.86M38.92M35.34M19.59M-7.83M
Net Income Common Stockholders
26.11M24.59M21.98M11.23M-10.67M
Balance SheetCash, Cash Equivalents and Short-Term Investments
20.21M25.84M45.19M127.10M19.62M
Total Assets
431.54M433.29M454.25M460.88M144.18M
Total Debt
7.60M2.19M2.99M3.76M598.00K
Net Debt
-12.61M-23.66M-42.21M-123.34M-19.02M
Total Liabilities
27.56M21.34M23.31M21.55M3.15M
Stockholders Equity
396.76M404.58M423.55M427.56M134.76M
Cash FlowFree Cash Flow
43.35M40.08M-8.24M11.53M7.35M
Operating Cash Flow
43.35M40.08M37.01M26.70M7.35M
Investing Cash Flow
-19.14M-12.84M-86.45M-39.91M-65.05M
Financing Cash Flow
-29.84M-46.60M-32.46M120.69M10.42M

NewLake Capital Partners Technical Analysis

Technical Analysis Sentiment
Negative
Last Price15.15
Price Trends
50DMA
15.88
Negative
100DMA
16.88
Negative
200DMA
17.90
Negative
Market Momentum
MACD
-0.26
Negative
RSI
40.61
Neutral
STOCH
60.73
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For NLCP, the sentiment is Negative. The current price of 15.15 is below the 20-day moving average (MA) of 15.39, below the 50-day MA of 15.88, and below the 200-day MA of 17.90, indicating a bearish trend. The MACD of -0.26 indicates Negative momentum. The RSI at 40.61 is Neutral, neither overbought nor oversold. The STOCH value of 60.73 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for NLCP.

NewLake Capital Partners Risk Analysis

NewLake Capital Partners disclosed 45 risk factors in its most recent earnings report. NewLake Capital Partners 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

NewLake Capital Partners Peers Comparison

Overall Rating
UnderperformOutperform
Sector (61)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
75
Outperform
$325.13M12.166.52%11.22%5.98%9.23%
70
Outperform
$1.81B11.548.20%11.80%-0.32%-4.24%
61
Neutral
$4.70B17.65-3.00%11.43%5.99%-19.07%
49
Neutral
$1.05B-12.12%6.27%67.62%
48
Neutral
$137.61M7.796.37%26.60%-19.21%-21.10%
43
Neutral
$66.00M-33.74%-16.39%-9.08%
* Real Estate Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
NLCP
NewLake Capital Partners
15.15
-2.79
-15.55%
IIPR
Innovative Industrial Properties
54.09
-38.07
-41.31%
GRWG
GrowGeneration
1.08
-1.82
-62.76%
TSE:TRUL
Trulieve Cannabis
5.47
-11.48
-67.73%
AFCG
AFC Gamma
5.57
-1.46
-20.77%

NewLake Capital Partners Earnings Call Summary

Earnings Call Date: Mar 5, 2025 | % Change Since: -5.90% | Next Earnings Date: May 8, 2025
Earnings Call Sentiment Neutral
The earnings call highlighted NewLake's financial growth and strong liquidity position, but also addressed significant challenges such as tenant payment issues and delays in federal cannabis reform. The company remains cautious about the industry's future due to these ongoing uncertainties.
Highlights
AFFO Per Share Growth
NewLake achieved a growth in AFFO per share of 10% year-over-year for 2024, demonstrating sustained growth since their founding in 2019.
Increased Dividends
Annual dividends were increased to $1.70 per share, an 8% rise over 2023, reflecting NewLake's commitment to delivering value to shareholders.
Strong Liquidity Position
NewLake reported a strong liquidity position with $103 million available, including $20.2 million in cash and $82.4 million in untapped credit facility capacity.
Revenue Growth
Total revenue for 2024 reached $50.1 million, representing a 6% increase from $47.3 million in 2023.
New Board Member
Dina Rollman, with over a decade of experience in the cannabis industry, was added to the Board of Directors, enhancing leadership in legal and regulatory affairs.
Lowlights
Tenant Rent Payment Issues
Revolutionary Clinics and Calypso are the only two tenants facing issues with paying contractual rent, impacting the financial stability of the lease portfolio.
Challenges in Massachusetts and Pennsylvania
Revolutionary Clinics entered receivership, and Calypso is facing challenges, leading to reliance on deposits for rent payments and uncertainty in retenanting.
Revenue Decline in Q4
Fourth quarter revenue decreased by 3.9% year-over-year due to noncash revenue recorded for Revolutionary Clinics warrants and their subsequent impairment.
Federal Reform Delays
Delays in DEA rescheduling and federal cannabis reforms continue to create uncertainty and headwinds for the industry.
Company Guidance
During NewLake Capital Partners' Fourth Quarter and Full Year 2024 Earnings Conference Call, the company provided guidance based on several key metrics and assumptions. The management anticipates continued headwinds in the cannabis industry for 2025 while awaiting developments such as the DEA's rescheduling decision and potential federal reforms. Despite these challenges, NewLake reported a 10% year-over-year growth in AFFO per share and increased their annual dividends by 8% to $1.70 per share in 2024. The company maintains a strong liquidity position with $103 million available, including $20.2 million in cash and $82.4 million in untapped credit facility capacity. NewLake's portfolio includes $445 million committed across 32 properties with 1.7 million square feet, maintaining an EBITDA coverage of 3.5x for cultivation and 9.0x for dispensaries. The company plans to continue its disciplined investment strategy with a focus on high-quality tenants and prudent risk management, supported by one of the lowest leverage levels in the REIT industry.

NewLake Capital Partners Corporate Events

Stock BuybackDividendsBusiness Operations and StrategyFinancial Disclosures
NewLake Capital Partners Reports Strong 2024 Financial Results
Positive
Mar 5, 2025

NewLake Capital Partners reported its financial results for the fourth quarter and full year of 2024, showing a 6.0% increase in full-year revenue to $50.1 million despite challenges in the cannabis industry. The company declared a first quarter 2025 dividend of $0.43 per share, reflecting an 8.3% increase in annual dividends, and highlighted its strong financial metrics and strategic investments, including a stock repurchase program and a $50 million At The Market Program.

Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

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.