AFC Gamma (NASDAQ:AFCG) Posts Quarterly Earnings Results, Beats Expectations By $0.04 EPS

AFC Gamma (NASDAQ:AFCG) issued its earnings results on Thursday. The company reported $0.23 EPS for the quarter, beating analysts’ consensus estimates of $0.19 by $0.04, FiscalAI reports. AFC Gamma had a positive return on equity of 1.48% and a negative net margin of 43.21%.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 6.9%

Shares of AFCG traded up $0.20 on Thursday, reaching $3.02. The company’s stock had a trading volume of 103,788 shares, compared to its average volume of 241,063. The company has a current ratio of 1.41, a quick ratio of 1.41 and a debt-to-equity ratio of 0.68. AFC Gamma has a twelve month low of $2.06 and a twelve month high of $5.10. The stock has a market capitalization of $70.94 million, a PE ratio of -4.71 and a beta of 0.91. The firm has a fifty day moving average of $3.01 and a 200-day moving average of $2.84.

AFC Gamma Announces Dividend

The firm also recently announced a quarterly dividend, which was paid on Wednesday, July 15th. Investors of record on Tuesday, June 30th were issued a $0.05 dividend. This represents a $0.20 dividend on an annualized basis and a dividend yield of 6.6%. The ex-dividend date was Tuesday, June 30th. AFC Gamma’s dividend payout ratio is currently -31.25%.

Wall Street Analysts Forecast Growth

Several research analysts have issued reports on AFCG shares. Zacks Research upgraded AFC Gamma from a “strong sell” rating to a “hold” rating in a report on Monday, April 20th. Wall Street Zen downgraded AFC Gamma from a “strong-buy” rating to a “buy” rating in a report on Saturday, August 1st. Finally, Weiss Ratings reaffirmed a “sell (d)” rating on shares of AFC Gamma in a research report on Friday, July 17th. Two investment analysts have rated the stock with a Hold rating and one has issued a Sell rating to the stock. According to data from MarketBeat, the stock currently has a consensus rating of “Reduce” and a consensus target price of $4.50.

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.