AFC Gamma (NASDAQ:AFCG) Issues Quarterly Earnings Results, Beats Estimates By $0.12 EPS

AFC Gamma (NASDAQ:AFCG) posted its quarterly earnings results on Thursday. The company reported $0.28 earnings per share for the quarter, beating the consensus estimate of $0.16 by $0.12, FiscalAI reports. AFC Gamma had a net margin of 15.64% and a return on equity of 2.85%. The company had revenue of $8.57 million during the quarter, compared to analyst estimates of $8.30 million.

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

• AFC generated $0.16 per share in net investment income, and NAV rose to $8.55, up about 15% year to date. Repurchases below NAV added approximately $0.06 per share to NAV during the quarter.
• The company is shifting toward lower middle-market lending: five non-cannabis investments totaling about $93 million were performing in line with underwriting. AFC cited a roughly $1.1 billion pipeline and expects to commit to a $43 million healthcare-services facility, though management cautioned that deployments will be selective and uneven.
• Legacy credit issues remain unresolved: Justice Grown is in maturity default, with collateral auctions scheduled for November, while recovery efforts continue for Devi. AFC did not provide estimates for Justice Grown proceeds, citing active legal proceedings.
• AFC repurchased $19 million of its 2027 notes at a discount, generating an approximately $600,000 gain and reducing upcoming debt obligations. Quarter-end gross debt-to-equity was 1.03 times, down from 1.1 times in the prior quarter.
• Management described a mixed lending backdrop, citing elevated defaults and borrowing costs but also less competition for smaller deals. It said it is prioritizing underwriting discipline and lender protections over loan volume.

AFC Gamma Trading Up 4.2%

AFCG stock traded up $0.12 during trading on Friday, hitting $3.12. 110,224 shares of the company traded hands, compared to its average volume of 195,954. The firm has a market capitalization of $70.62 million, a PE ratio of 16.39 and a beta of 1.00. AFC Gamma has a 1 year low of $2.06 and a 1 year high of $3.84. The company has a debt-to-equity ratio of 0.69, a quick ratio of 1.34 and a current ratio of 1.34. The company has a 50-day moving average of $3.30 and a 200-day moving average of $2.97.

AFC Gamma Dividend Announcement

The business also recently announced a quarterly dividend, which was paid on Thursday, October 15th. Investors of record on Wednesday, September 30th were issued a dividend of $0.05 per share. The ex-dividend date was Wednesday, September 30th. This represents a $0.20 annualized dividend and a yield of 6.4%. AFC Gamma’s dividend payout ratio is currently 105.26%.

Analyst Upgrades and Downgrades

A number of equities research analysts recently commented on AFCG shares. Weiss Ratings raised shares of AFC Gamma from a “sell (d)” rating to a “sell (d+)” rating in a report on Thursday, August 20th. Wall Street Zen lowered shares of AFC Gamma from a “buy” rating to a “hold” rating in a research report on Saturday, August 15th. One analyst has rated the stock with a Hold rating and one has given a Sell rating to the company. According to data from MarketBeat.com, AFC Gamma has an average rating of “Reduce”.

Insider Transactions at AFC Gamma

In other news, Director Leonard Tannenbaum purchased 44,643 shares of the business’s stock in a transaction on Wednesday, September 30th. The shares were acquired at an average price of $3.63 per share, with a total value of $162,054.09. Following the acquisition, the director directly owned 7,109,614 shares in the company, valued at approximately $25,807,898.82. The trade was a 0.63% increase in their ownership of the stock. The transaction was disclosed in a document filed with the SEC, which is available at the SEC website. Over the last 90 days, insiders have acquired 541,353 shares of company stock valued at $1,880,745. 30.70% of the stock is owned by company insiders.

About AFC Gamma

AFC Gamma, Inc is a specialty finance company focused primarily on providing institutional debt financing to businesses operating in the regulated cannabis industry. The company has historically targeted established cannabis operators and other participants in the industry that may have limited access to traditional bank financing.

Its financing activities have included senior secured loans, mortgage-backed loans and other structured debt arrangements. Borrowers may use these funds to support the acquisition, development or expansion of cannabis cultivation, processing, manufacturing and retail facilities, as well as related working-capital and corporate needs.

AFC Gamma was founded in 2019 and became a publicly traded company in 2021.