Advanced Flower Capital Inc. (AFCG), formerly known as AFC Gamma, Inc., is a prominent institutional lender specializing in the cannabis industry. The company focuses on originating, structuring, underwriting, and managing senior secured loans and other debt securities for established cannabis operators across the United States. This strategic approach provides essential capital to cannabis businesses, facilitating growth and expansion within this rapidly evolving sector.
Recent Developments
• CEO’s Stock Purchase: In a recent demonstration of confidence, CEO Neville Daniel acquired 5,000 shares of AFCG stock at $6.20 per share, totaling $31,000. This purchase increased his total holdings to 182,261 shares, reflecting a strong belief in the company’s future prospects.
• Financial Performance: AFCG reported fourth-quarter 2024 earnings per share (EPS) of $0.29, missing the anticipated $0.3683. Revenue was $7.64 million, below the expected $11.59 million. These results were impacted by defaults on three loans totaling $144 million, representing 36.3% of AFCG’s investment balance. In response, the company reduced its quarterly dividend by 30% to $0.23 per share.
Market Position and Outlook
Despite recent financial challenges, AFCG maintains a strong liquidity position, with current assets exceeding short-term obligations by 3.6 times. The company’s dividend yield stands at an attractive 14.7%. Analysts have adjusted their outlooks due to credit uncertainties, with Jefferies downgrading the stock from Buy to Hold, while Citizens JMP maintains a Market Perform rating. AFCG continues to focus on strategic capital deployment, with a robust pipeline of potential deals aimed at stabilizing and enhancing its loan portfolio.
