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NewLake Capital Partners (NLCP)
OTHER OTC:NLCP
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NewLake Capital Partners
(OTC:NLCP)
Rating:80Outperform
Price Target:
$16.50
▲(18.62%Upside)
NewLake Capital Partners (NLCP) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$285.70M
Dividend Yield12.37%
Average Volume (3M)24.07K
Price to Earnings (P/E)11.4
Beta (1Y)0.56
Revenue Growth4.61%
EPS Growth1.49%
CountryUS
Employees8
SectorReal Estate
Sector Strength52
IndustryREIT - Specialty
Share Statistics
EPS (TTM)0.31
Shares Outstanding20,539,486
10 Day Avg. Volume34,372
30 Day Avg. Volume24,075
Financial Highlights & Ratios
PEG Ratio-2.14
Price to Book (P/B)0.75
Price to Sales (P/S)0.00
P/FCF Ratio8.79
Enterprise Value/Market Cap1.05
Enterprise Value/Revenue1.50
Enterprise Value/Gross Profit7.66
Enterprise Value/Ebitda1.87
Forecast
1Y Price Target
$15.50Price Target Upside11.43% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering2
NewLake Capital Partners Business Overview & Revenue Model
Company DescriptionNewLake Capital Partners is a leading provider of real estate capital to state-licensed cannabis operators. Founded in 2019, it is a triple-net lease REIT that acquires industrial and retail properties through sale-leaseback transactions, third-party purchases and build-to-suit projects. Its tenants are some of the leading operators in the U.S. state-licensed cannabis industry and it is a trusted partner for their real estate needs.
How the Company Makes MoneyNewLake Capital Partners generates revenue primarily through leasing its property portfolio to cannabis operators. The company engages in sale-leaseback transactions and direct purchases of properties, which are then leased out under long-term, triple-net lease agreements. These agreements require tenants to cover property-related expenses such as taxes, insurance, and maintenance, ensuring a stable and predictable income stream for NewLake. Additionally, the company's earnings are supported by the appreciation in property values and strategic property acquisitions that enhance its portfolio. Partnerships with cannabis operators and a focus on key markets where cannabis is legalized further strengthen its revenue model.
NewLake Capital Partners Earnings Call Summary
Earnings Call Date:May 07, 2025
(Q1-2025)
| % Change Since: -0.64%|
Next Earnings Date:Aug 06, 2025
Earnings Call Sentiment Neutral
The earnings call reflects a mixed outlook with stable rent collections, strategic acquisitions, and a strong balance sheet, countered by ongoing challenges in the cannabis industry, issues with specific tenants, and a slight decline in AFFO. The company maintains a cautious but strategic approach to navigate the current landscape.Q1-2025 Updates
Positive Updates
Stable Rent Collections and Property Acquisitions
Rent collections remain stable and two new property acquisitions were completed, aligning with the disciplined investment strategy.
AFFO Payout Ratio within Target Range
The first quarter AFFO payout ratio was 84%, consistent with the target range of 80% to 90%, supporting the dividend.
Revenue Growth and Strong Balance Sheet
Total revenue increased by 4.8% year-over-year to $13.2 million, with a solid balance sheet featuring $432 million in gross real estate assets and only $8 million in debt.
Strategic Tenant Developments
Calypso secured a strategic investment, enhancing its value, especially as Pennsylvania nears adult use market approval.
Negative Updates
Challenges in the Cannabis Industry
Continued headwinds in the cannabis industry with distressed headlines, small-scale M&A, and tougher financing conditions.
Issues with REV Clinics
REV Clinics remains in receivership, paying 50% of contractual rent, with challenges anticipated in re-leasing the property.
Decline in EBITDAR Coverage
Average EBITDAR coverage declined slightly for both cultivation and dispensaries, with concerns about price compression across the industry.
AFFO Decline
AFFO decreased by 2.2% compared to the previous year, driven by higher professional fees and timing of tenant billbacks.
Company Guidance
During the New Lake Capital Partners First Quarter 2025 Earnings Conference Call, the company provided guidance on several key metrics. Rent collections remained stable, aligning with previous expectations, and the AFFO payout ratio was 84%, within their target range of 80% to 90%. The company reported total revenue of $13.2 million for the quarter, a 4.8% increase from the previous year, with net income attributable to common shareholders totaling $6.3 million or $0.31 per share. Adjusted funds from operations were $10.7 million or $0.51 per share, reflecting a modest decline of 2.2% compared to the same period in 2024. The company declared a cash dividend of $0.43 per share, with an 84% payout ratio. New Lake maintains a strong balance sheet with $432 million in gross real estate assets and only $8 million in debt, resulting in a debt to EBITDA ratio of less than 0.2 times. The company has $102 million in liquidity, including $19.9 million in cash and $82.4 million in untapped credit facility capacity.NewLake Capital Partners Financial Statement Overview
Summary
NewLake Capital Partners exhibits strong financial health across income, balance sheet, and cash flow metrics. The company demonstrates robust revenue growth and profitability, coupled with a solid, debt-free balance sheet. Cash flow performance is impressive, despite some historical fluctuations. Overall, the financials suggest a stable and growth-oriented outlook, with minimal financial risk.Income Statement
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.85
Very Positive
Balance Sheet
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.90
Very Positive
Cash Flow
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.80
Positive
| Breakdown | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 50.13M | 47.30M | 44.79M | 28.20M | 11.66M |
| Gross Profit | 49.89M | 46.65M | 44.73M | 28.06M | -3.96M |
| EBITDA | 42.03M | 38.92M | 35.34M | 19.59M | -7.83M |
| Net Income | 26.11M | 24.59M | 21.98M | 11.23M | -10.67M |
Balance Sheet | |||||
| Total Assets | 431.54M | 433.29M | 454.25M | 460.88M | 144.18M |
| Cash, Cash Equivalents and Short-Term Investments | 20.21M | 25.84M | 45.19M | 127.10M | 19.62M |
| Total Debt | 7.60M | 2.19M | 2.99M | 3.76M | 598.00K |
| Total Liabilities | 27.56M | 21.34M | 23.31M | 21.55M | 3.15M |
| Stockholders Equity | 396.76M | 404.58M | 423.55M | 427.56M | 134.76M |
Cash Flow | |||||
| Free Cash Flow | 43.35M | 40.08M | -8.24M | 11.53M | 7.35M |
| Operating Cash Flow | 43.35M | 40.08M | 37.01M | 26.70M | 7.35M |
| Investing Cash Flow | -19.14M | -12.84M | -86.45M | -39.91M | -65.05M |
| Financing Cash Flow | -29.84M | -46.60M | -32.46M | 120.69M | 10.42M |
NewLake Capital Partners Technical Analysis
Negative
13.91
Price Trends
14.13
Negative
14.20
Negative
15.67
Negative
Market Momentum
<0.01
Positive
41.47
Neutral
13.39
Positive
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 13.91 is below the 20-day moving average (MA) of 14.25, below the 50-day MA of 14.13, and below the 200-day MA of 15.67, indicating a bearish trend. The MACD of <0.01 indicates Positive momentum. The RSI at 41.47 is Neutral, neither overbought nor oversold. The STOCH value of 13.39 is Positive, 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 (59)
Financial Indicators
Performance Comparison
NLCP
NewLake Capital Partners
13.91
-2.36
-14.51%
PW
Power REIT
1.14
0.25
28.09%
AFCG
AFC Gamma
4.70
-2.50
-34.72%
NewLake Capital Partners Corporate Events
Business Operations and StrategyFinancial Disclosures
NewLake Capital Partners Reports Q1 2025 Financial Results
Positive
May 7, 2025
NewLake Capital Partners reported its financial results for the first quarter of 2025, highlighting a revenue increase of 4.8% year-over-year to $13.2 million and a net income of $6.3 million. The company maintained a strong liquidity position with $102.3 million available and a low debt ratio, despite challenges from tenant defaults. The results reflect the company’s resilience and strategic risk management in a volatile industry.
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.