AFC Gamma (NASDAQ:AFCG) Announces Quarterly Earnings Results

AFC Gamma (NASDAQ:AFCG) posted its quarterly earnings data on Thursday. The company reported $0.28 earnings per share (EPS) for the quarter, topping the consensus estimate of $0.16 by $0.12, FiscalAI reports. The company had revenue of $6.70 million for the quarter, compared to the consensus estimate 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 Performance

AFC Gamma stock traded down $0.20 during mid-day trading on Thursday, reaching $2.99. The company’s stock had a trading volume of 69,139 shares, compared to its average volume of 49,783. The company has a current ratio of 1.34, a quick ratio of 1.34 and a debt-to-equity ratio of 0.69. AFC Gamma has a twelve month low of $2.06 and a twelve month high of $3.84. The business has a 50 day moving average price of $3.30 and a 200-day moving average price of $2.97. The firm has a market cap of $67.78 million, a price-to-earnings ratio of 15.74 and a beta of 1.00.

AFC Gamma Dividend Announcement

The firm also recently disclosed a quarterly dividend, which was paid on Thursday, October 15th. Shareholders of record on Wednesday, September 30th were issued a $0.05 dividend. This represents a $0.20 dividend on an annualized basis and a yield of 6.7%. The ex-dividend date of this dividend was Wednesday, September 30th. AFC Gamma’s payout ratio is currently 105.26%.

Wall Street Analysts Forecast Growth

Several brokerages have recently commented on AFCG. Weiss Ratings raised shares of AFC Gamma from a “sell (d)” rating to a “sell (d+)” rating in a research report on Thursday, August 20th. Wall Street Zen lowered 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 given a Sell rating to the stock. According to data from MarketBeat.com, the company has a consensus rating of “Reduce”.

Insider Buying and Selling

In related news, Director Leonard Tannenbaum acquired 65,752 shares of AFC Gamma stock in a transaction that occurred on Friday, August 28th. The stock was acquired at an average price of $3.53 per share, for a total transaction of $232,104.56. Following the transaction, the director directly owned 6,780,803 shares of the company’s stock, valued at $23,936,234.59. This trade represents a 0.98% increase in their position. The transaction was disclosed in a filing with the Securities & Exchange Commission, which is accessible through this link. Insiders purchased 541,353 shares of company stock valued at $1,880,745 in the last three months. Insiders own 30.70% of the company’s stock.

AFC Gamma Company Profile

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.