AFC Gamma (NASDAQ:AFCG – Get Free Report) announced its quarterly 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 company had revenue of $6.70 million during 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 Down 6.3%
Shares of NASDAQ:AFCG traded down $0.20 during trading on Thursday, hitting $2.99. 69,136 shares of the company’s stock traded hands, compared to its average volume of 196,458. 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 company has a 50-day moving average price of $3.31 and a 200-day moving average price of $2.97. AFC Gamma has a 52 week low of $2.06 and a 52 week high of $3.84. The company has a market cap of $67.78 million, a price-to-earnings ratio of 15.74 and a beta of 1.00.
AFC Gamma Announces Dividend
The firm also recently disclosed a quarterly dividend, which was paid on Thursday, October 15th. Stockholders of record on Wednesday, September 30th were issued a dividend of $0.05 per share. This represents a $0.20 annualized dividend and a dividend yield of 6.7%. The ex-dividend date was Wednesday, September 30th. AFC Gamma’s payout ratio is 105.26%.
Analyst Ratings Changes
Several research firms recently weighed in on AFCG. Weiss Ratings raised shares of AFC Gamma from a “sell (d)” rating to a “sell (d+)” rating in a research note on Thursday, August 20th. Wall Street Zen lowered shares of AFC Gamma from a “buy” rating to a “hold” rating in a report on Saturday, August 15th. One research analyst has rated the stock with a Hold rating and one has given a Sell rating to the company. According to MarketBeat.com, the company currently has an average rating of “Reduce”.
View Our Latest Stock Analysis on AFCG
Insider Transactions at AFC Gamma
In related news, Director Leonard Tannenbaum bought 44,643 shares of the company’s stock in a transaction on Wednesday, September 30th. The shares were purchased at an average cost of $3.63 per share, for a total transaction of $162,054.09. Following the acquisition, the director owned 7,109,614 shares of the company’s stock, valued at approximately $25,807,898.82. This represents a 0.63% increase in their position. The purchase was disclosed in a filing with the SEC, which can be accessed through this link. Over the last three months, insiders purchased 541,353 shares of company stock worth $1,880,745. 30.70% of the stock is currently owned by corporate 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.
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