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Newlake Capital Partners, Inc. (NLCP)
:NLCP
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NewLake Capital Partners
(OTC:NLCP)
Rating:79Outperform
Price Target:
$16.00
▲(15.11% Upside)
NewLake Capital Partners (NLCP) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$289.59M
Dividend Yield12.45%
Average Volume (3M)42.78K
Price to Earnings (P/E)11.3
Beta (1Y)0.53
Revenue Growth3.30%
EPS Growth-1.30%
CountryUS
Employees8
SectorReal Estate
Sector Strength53
IndustryREIT - Specialty
Share Statistics
EPS (TTM)0.35
Shares Outstanding20,552,631
10 Day Avg. Volume64,585
30 Day Avg. Volume42,781
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)N/A
P/FCF RatioN/A
Enterprise Value/Market Cap1.02
Enterprise Value/Revenue5.83
Enterprise Value/Gross Profit6.96
Enterprise Value/Ebitda7.16
Forecast
1Y Price Target
$16.25Price Target Upside16.91% 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:Aug 06, 2025
(Q2-2025)
| % Change Since: 0.36%|
Next Earnings Date:Nov 06, 2025
Earnings Call Sentiment Neutral
The earnings call reflects a stable financial performance with modest revenue growth and a strong balance sheet. However, challenges such as tenant defaults and re-leasing difficulties pose risks. The cautious outlook due to subdued demand for cultivation projects and industry-specific risks balance the positive aspects.Q2-2025 Updates
Positive Updates
Stable Dividend Payout Ratio
The second quarter dividend of $0.43 per share reflected an AFFO payout ratio of 79%, providing a cushion below the targeted range of 80% to 90%.
Revenue Growth
Total revenue for the second quarter of 2025 was $12.9 million, a 3.8% increase year-over-year, driven by full quarters of rental income from recent acquisitions and improvements.
Strong Balance Sheet
The balance sheet remains solid with $432.2 million in gross real estate assets and a very conservative debt profile with a 1.6% debt to total gross assets.
Negative Updates
Emerging Tenant Default
Ayr Wellness, representing approximately 5.9% of annualized base rent, has entered into a restructuring agreement and has not paid August rent.
Re-leasing Challenges
Revolutionary Clinics vacated a property in Massachusetts, and re-leasing is expected to take time due to market difficulties.
Reduced Demand for Cultivation Projects
There is a subdued level of demand for cultivation projects in the second half of 2025 compared to prior years, impacting future growth potential.
Company Guidance
During the NewLake Capital Partners second quarter 2025 conference call, the company provided guidance focusing on several key metrics. The second quarter dividend was declared at $0.43 per share, representing an adjusted funds from operations (AFFO) payout ratio of 79%, slightly below the targeted range of 80% to 90%. Total revenue for the quarter was reported at $12.9 million, marking a 3.8% increase year-over-year. The company highlighted its low leverage with a debt to total gross assets ratio of 1.6% and no debt maturing until May 2027. The portfolio's weighted average lease term is approximately 13 years, and the company has paid over $6 in dividends since going public in 2021. Additionally, the company discussed an emerging default involving a tenant, Ayr Wellness, which represents about 5.9% of the annualized base rent, and noted a proactive approach in managing this situation. With $104.3 million available in liquidity, NewLake Capital Partners emphasized its strong balance sheet, flexibility in managing potential challenges, and commitment to maximizing long-term shareholder value.NewLake Capital Partners Financial Statement Overview
Summary
NewLake Capital Partners exhibits a healthy financial standing with strong income statement performance, minimal leverage, and positive cash flow dynamics. The company maintains profitable growth with efficient operations and robust cash management, positioning it well within the REIT - Specialty industry.Income Statement
NewLake Capital Partners shows a strong income statement with consistent revenue growth. The TTM revenue of $50.73M is a 1.2% increase from the previous year. The net profit margin stands robustly at 50.34% for TTM, reflecting a healthy profitability level. The EBIT and EBITDA margins are also strong at 51.87% and 81.47% respectively, indicating efficient operations and cash generation capabilities.85
Very Positive
Balance Sheet
The balance sheet is stable with a low debt-to-equity ratio of 0.02, indicating minimal leverage risk. The equity ratio is high at 92.21%, underscoring a strong equity base relative to total assets. Return on equity (ROE) is sound at 6.48%, reflecting the company's ability to generate profits from its equity investments. The balance sheet portrays financial stability with a strong equity position, though growth in assets is modest.78
Positive
Cash Flow
Cash flow analysis reveals a solid operating cash flow to net income ratio of 1.07, indicating sufficient cash generation from operations. The free cash flow is positive and has grown by 8.44% from the previous year, demonstrating effective cash management. The free cash flow to net income ratio of 1.07 suggests strong cash flow relative to net earnings, supporting liquidity and potential for reinvestment.82
Very Positive
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 50.73M | 50.13M | 47.30M | 44.79M | 28.20M | 11.66M |
| Gross Profit | 42.54M | 49.89M | 46.65M | 44.73M | 28.06M | -3.96M |
| EBITDA | 41.34M | 42.03M | 38.92M | 35.34M | 19.59M | -7.83M |
| Net Income | 25.54M | 26.11M | 24.59M | 21.98M | 11.23M | -10.67M |
Balance Sheet | ||||||
| Total Assets | 427.54M | 431.54M | 433.29M | 454.25M | 460.88M | 144.18M |
| Cash, Cash Equivalents and Short-Term Investments | 19.94M | 20.21M | 25.84M | 45.19M | 127.10M | 19.62M |
| Total Debt | 7.60M | 7.60M | 2.19M | 2.99M | 3.76M | 598.00K |
| Total Liabilities | 26.45M | 27.56M | 21.34M | 23.31M | 21.55M | 3.15M |
| Stockholders Equity | 394.24M | 396.76M | 404.58M | 423.55M | 427.56M | 134.76M |
Cash Flow | ||||||
| Free Cash Flow | 43.47M | 43.35M | 40.08M | -8.24M | 11.53M | 7.35M |
| Operating Cash Flow | 43.47M | 43.35M | 40.08M | 37.01M | 26.70M | 7.35M |
| Investing Cash Flow | -11.53M | -19.14M | -12.84M | -86.45M | -39.91M | -65.05M |
| Financing Cash Flow | -33.55M | -29.84M | -46.60M | -32.46M | 120.69M | 10.42M |
NewLake Capital Partners Technical Analysis
Negative
13.90
Price Trends
14.08
Negative
13.97
Negative
14.93
Negative
Market Momentum
<0.01
Positive
46.81
Neutral
23.05
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 13.9 is below the 20-day moving average (MA) of 14.06, below the 50-day MA of 14.08, and below the 200-day MA of 14.93, indicating a bearish trend. The MACD of <0.01 indicates Positive momentum. The RSI at 46.81 is Neutral, neither overbought nor oversold. The STOCH value of 23.05 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 (63)
Financial Indicators
Performance Comparison
NLCP
NewLake Capital Partners
13.90
-4.56
-24.70%
PW
Power REIT
1.51
-0.08
-5.03%
AFCG
AFC Gamma
4.11
-4.73
-53.51%
NewLake Capital Partners Corporate Events
DividendsFinancial Disclosures
NewLake Capital Partners Reports Q2 2025 Financial Results
Positive
Aug 6, 2025
NewLake Capital Partners reported its financial results for the second quarter of 2025, showing a revenue increase of 3.8% year-over-year to $12.9 million and net income attributable to common stockholders of $7.3 million. The company maintained a stable business model with a 79% AFFO payout ratio, despite challenges in the cannabis industry, and declared a dividend of $0.43 per common share for the quarter.
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.