AFC Gamma (NASDAQ:AFCG) Issues Earnings Results

AFC Gamma (NASDAQ:AFCG) posted its quarterly earnings results on Thursday. The company reported $0.23 EPS for the quarter, beating the consensus estimate of $0.19 by $0.04, FiscalAI reports. AFC Gamma had a net margin of 15.64% and a return on equity of 2.89%. The business had revenue of $6.77 million during the quarter, compared to analyst estimates of $8.59 million.

Here are the key takeaways from AFC Gamma’s conference call:

• Net asset value increased to $8.25 per share, up $0.35 sequentially, driven by $0.15 of net investment income, $0.17 of accretion from share repurchases, and approximately $0.08 of unrealized appreciation. Net investment income covered the $0.05 quarterly distribution by three times.
• AFC reported a $1.3 billion lower-middle-market pipeline and more than $70 million of available liquidity, supporting continued investment despite management’s expectation that originations will remain lumpy. The company also committed $7 million to a behavioral-health credit facility after quarter-end.
• The company repurchased approximately $2.8 million of stock during the quarter at an average price of $3.29 per share, leaving $2.2 million under its authorized $5 million program. Management said the buybacks were $0.17 accretive to NAV per share.
• Legacy cannabis credit issues remain a key risk: the Justice Grown loan is in maturity default and AFC has begun Article 9 foreclosure proceedings, while other non-accrual cannabis investments continue through liquidation or repayment processes.
• AFC’s portfolio totaled $290 million across 17 companies, consisting entirely of senior secured first-lien investments with a 13.2% weighted-average yield excluding non-accrual loans. Leverage was 1.1 times debt-to-equity, while management said it remains cautious on new cannabis lending because borrowers still face limited access to equity capital.

AFC Gamma Stock Up 5.0%

AFC Gamma stock traded up $0.15 during midday trading on Friday, reaching $3.16. The company’s stock had a trading volume of 156,435 shares, compared to its average volume of 77,169. The company has a debt-to-equity ratio of 0.68, a current ratio of 1.41 and a quick ratio of 1.41. The stock has a market capitalization of $74.35 million, a P/E ratio of 16.63 and a beta of 0.91. The stock’s 50-day simple moving average is $2.99 and its 200-day simple moving average is $2.84. AFC Gamma has a 52-week low of $2.06 and a 52-week high of $5.10.

AFC Gamma Announces Dividend

The firm also recently declared a quarterly dividend, which was paid on Wednesday, July 15th. Shareholders of record on Tuesday, June 30th were paid a $0.05 dividend. The ex-dividend date was Tuesday, June 30th. This represents a $0.20 dividend on an annualized basis and a yield of 6.3%. AFC Gamma’s dividend payout ratio (DPR) is -31.25%.

Wall Street Analysts Forecast Growth

A number of brokerages recently commented on AFCG. Weiss Ratings reissued a “sell (d)” rating on shares of AFC Gamma in a research note on Friday, July 17th. Zacks Research raised shares of AFC Gamma from a “strong sell” rating to a “hold” rating in a research report on Monday, April 20th. Finally, Wall Street Zen lowered shares of AFC Gamma from a “buy” rating to a “hold” rating in a research note on Saturday. One research analyst has rated the stock with a Hold rating and one has given a Sell rating to the stock. According to MarketBeat, the stock has an average rating of “Reduce”.

About AFC Gamma

AFC Gamma, Inc is a specialty finance real estate investment trust that focuses on providing structured financing solutions to companies operating and developing digital infrastructure and life science real estate assets. As a REIT, AFC Gamma seeks to generate attractive risk-adjusted returns through a diversified portfolio of loans, preferred equity and other financing structures that are secured by tangible property collateral or contractual revenue streams.

The company’s primary business activities include originating, acquiring and managing secured loans and equity investments that support wireless and broadband network deployment, data center expansion, and life sciences facility development.