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

AFC Gamma (NASDAQ:AFCG) released its earnings results on Thursday. The company reported $0.28 EPS for the quarter, beating analysts’ consensus estimates of $0.16 by $0.12, FiscalAI reports. The firm had revenue of $8.57 million for the quarter, compared to analysts’ expectations of $8.30 million. AFC Gamma had a return on equity of 2.85% and a net margin of 15.64%.

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 Stock Up 6.0%

Shares of AFCG opened at $3.17 on Friday. The company has a current ratio of 1.34, a quick ratio of 1.34 and a debt-to-equity ratio of 0.69. The stock’s 50 day moving average is $3.30 and its two-hundred day moving average is $2.97. The firm has a market cap of $71.86 million, a P/E ratio of 3.05 and a beta of 1.00. AFC Gamma has a 12 month low of $2.06 and a 12 month high of $3.84.

AFC Gamma Announces Dividend

The company also recently disclosed a quarterly dividend, which was paid on Thursday, October 15th. Investors of record on Wednesday, September 30th were paid a dividend of $0.05 per share. This represents a $0.20 annualized dividend and a dividend yield of 6.3%. The ex-dividend date was Wednesday, September 30th. AFC Gamma’s payout ratio is 105.26%.

Insiders Place Their Bets

In other news, Director Leonard Tannenbaum purchased 44,643 shares of the firm’s stock in a transaction dated 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 purchase, the director directly owned 7,109,614 shares of the company’s stock, valued at $25,807,898.82. The trade was a 0.63% increase in their ownership of the stock. The purchase was disclosed in a legal filing with the SEC, which is available through this link. In the last ninety days, insiders have acquired 541,353 shares of company stock worth $1,880,745. 30.70% of the stock is owned by corporate insiders.

Analysts Set New Price Targets

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

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.