Cannabis market-focused mortgage REIT Advanced Flower Capital misses Q2 estimates, to convert to BDC
Overview
Advanced Flower Capital Q2 GAAP net loss of $13.2 mln, reflecting cannabis market challenges
Distributable Earnings of $3.4 mln missed analyst expectations, per LSEG data
Co plans to convert from mortgage REIT to BDC, expanding investment opportunities
Outlook
Company plans to convert from REIT to BDC, pending shareholder approval
Company aims to expand investment opportunities beyond real estate assets
Company sees potential in lending to ancillary cannabis businesses
Company expects broader investment mandate to diversify exposure
Result Drivers
NON-ACCRUAL CREDITS - Focus on resolving non-accrual credits impacted financial results, per CEO Dan Neville
LACK OF CAPITAL - Continued lack of capital in cannabis market affecting operations, according to CEO
EXPANDED MANDATE - Expansion of investment mandate to include non-cannabis middle market companies
Key Details
Metric | Beat/Miss | Actual | Consensus Estimate |
Q2 Distributable Earnings | Miss | $3.40 mln | $4.89 mln (6 Analysts) |
Q2 Net Income |
| -$13.20 mln |
|
Q2 Dividend |
| $0.15 |
|
Analyst Coverage
The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 4 "strong buy" or "buy", 3 "hold" and no "sell" or "strong sell"
The average consensus recommendation for the specialized reits peer group is "buy"
Wall Street's median 12-month price target for Advanced Flower Capital Inc is $10.00, about 54.4% above its August 13 closing price of $4.56
The stock recently traded at 4 times the next 12-month earnings vs. a P/E of 5 three months ago
Press Release: ID:nGNX1vX9h9
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