AFC Gamma Inc. (AFCG) closed the last trading session at $10.19, gaining 13% over the past four weeks, but there could be plenty of upside left in the stock if short-term price targets set by Wall Street analysts are any guide. The mean price target of $14.80 indicates a 45.2% upside potential.The mean estimate comprises five short-term price targets with a standard deviation of $3.56. While the lowest estimate of $9 indicates a 11.7% decline from the current price level, the most optimistic analyst expects ...

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Shares of AFC Gamma Inc. (AFCG) have gained 9.5% over the past four weeks to close the last trading session at $9.57, but there could still be a solid upside left in the stock if short-term price targets of Wall Street analysts are any indication. Going by the price targets, the mean estimate of $15 indicates a potential upside of 56.7%.The average comprises five short-term price targets ranging from a low of $10 to a high of $18, with a standard deviation of $3.16. While the lowest estimate indicates an in ...

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Financial Data and Key Metrics Changes - For Q2 2024, the company generated distributable earnings of $0.56 per basic weighted average share, with a GAAP net income of $16.4 million or $0.80 per share [9][21] - The company declared a dividend of $0.48 per share for the fifth consecutive quarter and a special dividend of $0.15 per share in connection with the spin-off [9][24] - As of June 30, 2024, total assets were $458 million, with cash and cash equivalents of $170.3 million [22] Business Line Data and Key Metrics Changes - The company successfully exited its largest credit facility, an $84 million loan, generating a 19.9% internal rate of return (IRR) [11] - A $24 million loan to Private Company C was prepaid, resulting in a 25.5% IRR [12] - The current portfolio has a weighted average yield to maturity of 19% [12] Market Data and Key Metrics Changes - The cannabis pipeline stands at $346 million, with three deals totaling $57.3 million closed year-to-date [15] - The launch of adult-use sales in Ohio is expected to drive growth in the cannabis market, with potential expansions in Florida and Pennsylvania [17] Company Strategy and Development Direction - The company has transitioned to a pure-play cannabis lender following the spin-off of its commercial real estate portfolio, allowing for a focused approach in the cannabis sector [7] - The management aims to reduce exposure to underperforming credits, reinvigorate origination efforts, and enhance underwriting processes [10][30] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the cannabis industry's growth due to ongoing legalization efforts and increasing demand for capital [17][19] - The company is confident in its ability to deliver strong financial performance and generate value for shareholders, focusing on moving up the quality curve while targeting mid to high teens IRRs [19] Other Important Information - The CECL reserve was $25.2 million, approximately 9.1% of loans at carrying value, which decreased from $31.4 million in the previous quarter [23] - The company ended the quarter with $335.4 million of principal outstanding across 14 loans [22] Q&A Session Summary Question: Can you provide background on accomplishments since joining the company? - Management highlighted progress in managing underperforming credits, origination efforts, and active underwriting practices [28][30] Question: Are there changes in the supply side of capital? - Management noted that refinancing is primarily among existing players, with limited involvement from regional banks [32][33] Question: Can you provide pro forma numbers regarding the new dividend? - Management indicated that the Board will continue to declare dividends on a normal cadence, with a pro forma book value of approximately $5.56 per share post-spin-off [35]

Company Performance - AFC Gamma Inc. reported quarterly earnings of $0.56 per share, exceeding the Zacks Consensus Estimate of $0.50 per share, and up from $0.49 per share a year ago, representing an earnings surprise of 12% [1] - The company posted revenues of $19.96 million for the quarter ended June 2024, surpassing the Zacks Consensus Estimate by 21.10%, compared to year-ago revenues of $17.68 million [1] - Over the last four quarters, AFC Gamma has surpassed consensus EPS estimates two times and topped consensus revenue estimates once [1] Stock Performance - AFC Gamma shares have declined approximately 27.9% since the beginning of the year, while the S&P 500 has gained 9.9% [2] - The current consensus EPS estimate for the upcoming quarter is $0.50 on revenues of $16.12 million, and for the current fiscal year, it is $1.99 on revenues of $65.05 million [4] Industry Outlook - The REIT and Equity Trust industry, to which AFC Gamma belongs, is currently ranked in the top 20% of over 250 Zacks industries, indicating a favorable outlook [5] - The performance of AFC Gamma's stock may be influenced by the overall industry outlook, as the top 50% of Zacks-ranked industries outperform the bottom 50% by more than 2 to 1 [5] Future Earnings Expectations - The estimate revisions trend for AFC Gamma is mixed, leading to a Zacks Rank 3 (Hold) for the stock, suggesting it is expected to perform in line with the market in the near future [4] - Ellington Credit, another company in the same industry, is expected to report quarterly earnings of $0.24 per share, reflecting a year-over-year change of +41.2%, with revenues anticipated to be $6.35 million, up 492% from the year-ago quarter [5][6]

Financial Performance - Second quarter 2024 GAAP net income was $16.4 million, or $0.80 per basic weighted average common share, with Distributable Earnings of $11.4 million, or $0.56 per share[1][2] - Distributable Earnings for the second quarter were $11.4 million, compared to $9.9 million in the same period last year, reflecting a year-over-year increase[16] - The company reported a decrease in the provision for current expected credit losses of $6.19 million for the quarter[16] Dividends - The company paid a dividend of $0.48 per common share for the second quarter, distributing a total of $9.9 million in dividends[3] - AFC Gamma's management believes that Distributable Earnings is a useful indicator for assessing overall business performance and dividend sustainability[11] Business Strategy - AFC Gamma is now a pure-play cannabis lender following the spin-off of its commercial real estate portfolio on July 9, 2024, aiming to meet or exceed a $100 million origination goal for the year[2] - The active portfolio management has shown positive momentum, with reduced reserves and increased book value, indicating effective strategic initiatives[2] Investor Relations - The company emphasizes the importance of monitoring its Investor Relations webpage for material information and updates[5] Forward-Looking Statements - Forward-looking statements indicate that future growth and strategies are subject to uncertainties and may differ from projections[17]

Financial Performance - Net income allocable to common shareholders for the three months ended June 30, 2024, was approximately $16.4 million, or $0.80 per share, compared to $12.1 million, or $0.59 per share for the same period in 2023[186]. - Interest income increased by approximately $2.3 million, or 12.9%, for the three months ended June 30, 2024, compared to the same period in 2023[187]. - Distributable earnings for the three months ended June 30, 2024, were approximately $11.4 million, or $0.56 per share, compared to $9.9 million, or $0.49 per share for the same period in 2023[183]. - Cash dividends declared per share for the six months ended June 30, 2024 totaled $1.11, with an aggregate amount paid of approximately $22.9 million[173]. Spin-Off and Strategic Focus - The company completed a Spin-Off on July 9, 2024, transferring its CRE portfolio to SUNS and distributing shares to shareholders[154]. - Following the Spin-Off, the company plans to focus on first and second lien loans to cannabis operators, removing previous investment guidelines related to non-cannabis commercial real estate[156]. - The Spin-Off of Sunrise Realty Trust, Inc. occurred on July 9, 2024, with shareholders receiving one share of SUNS common stock for every three shares held[176]. Loan Portfolio and Financing - The total loan portfolio balance as of June 30, 2024, was approximately $335.4 million, with an average yield to maturity (YTM) of 19%[204]. - As of June 30, 2024, the portfolio included twelve loans held at carrying value with an outstanding principal of approximately $283.7 million, down from $314.4 million as of December 31, 2023[212]. - The aggregate originated commitment for loans held at carrying value was approximately $311.1 million as of June 30, 2024, compared to $333.1 million as of December 31, 2023[212]. - The company sold its loan with Private Company B at par plus accrued interest, with an outstanding principal of approximately $19.3 million, and received an exit fee of approximately $1.0 million[165]. - The company received an approximately $8.1 million prepayment from Private Company L's sale of certain collateral assets during the second quarter[159]. Credit and Interest Rate Risk - Interest rate risk is a significant concern, as rising rates could increase borrowing costs while yields on fixed-rate assets remain static, potentially reducing net interest margin[257]. - The company is subject to credit risk on commercial real estate loans and will manage this risk through deep credit fundamental analysis and non-recourse financing[263]. - Changes in market yields could significantly affect the fair value of loans, with a decrease of 50 basis points resulting in an unrealized gain (loss) of approximately $0.2 million[258]. - The company actively manages risk exposure related to interest rates, credit, and prepayment risks through a combination of portfolio monitoring and risk management tools[249]. Capital Structure and Liquidity - The company expects to raise additional equity and/or debt funds to increase liquidity in the near future due to the evolving cannabis industry and increased demand for capital[227]. - The company had $35.0 million of borrowings outstanding under its Revolving Credit Facility as of June 30, 2024, with an additional $25.0 million available for borrowing[228]. - The company incurred a one-time commitment fee expense of approximately $0.5 million upon entering into the Revolving Credit Agreement, amortized over the life of the facility[229]. - As of June 30, 2024, the company had approximately $170.3 million in unrestricted cash, an increase from $121.6 million as of December 31, 2023[223]. Management and Operational Expenses - Management fees increased by approximately $0.3 million, or 17.2%, for the six months ended June 30, 2024, driven by lower outside fees earned[192]. - General and administrative expenses decreased by approximately $(1.0) million, or (31.7)%, for the six months ended June 30, 2024, primarily due to the absence of severance expenses incurred in the prior year[194]. - Professional fees increased by approximately $1.1 million, or 134.5%, for the six months ended June 30, 2024, due to spin-off costs incurred during the period[197]. Compliance and Regulatory Matters - The company has qualified as a REIT and intends to maintain this status while continuing to satisfy asset, income, and distribution tests[150]. - The company is required to distribute at least 90% of its REIT taxable income to shareholders, with potential tax implications for undistributed income[246]. - As of June 30, 2024, the company was in compliance with all covenants contained in its Revolving Credit Agreement[230].

Group 1 - AFC Gamma Inc. (AFCG) shares increased by 5.4% to $9.51 in the last trading session, following a significant volume of shares traded, contrasting with a 28.1% loss over the past four weeks [1] - The stock's rally was driven by positive sentiment regarding the recent spin-off of its commercial real estate portfolio into an independent company, Sunrise Realty Trust, Inc. (SUNS), allowing both companies to focus on their respective markets [1] - The spin-off is expected to enhance investor confidence by enabling each company to concentrate on its specialized portfolio and adjust business strategies accordingly [1] Group 2 - AFC Gamma is projected to report quarterly earnings of $0.50 per share, reflecting a year-over-year increase of 2%, while revenues are anticipated to decline by 6.8% to $16.48 million [2] - The consensus EPS estimate for AFC Gamma has remained stable over the past 30 days, indicating that stock price movements may not sustain without changes in earnings estimate revisions [2] - The stock currently holds a Zacks Rank of 3 (Hold), indicating a neutral outlook within the REIT and Equity Trust industry [3] Group 3 - AGNC Investment, another company in the same industry, saw a 1.4% increase in its stock price, closing at $10.51, with a month-to-date return of 6.6% [3] - AGNC's consensus EPS estimate has also remained unchanged at $0.53, representing a year-over-year decrease of 20.9%, and it holds a Zacks Rank of 3 (Hold) [3]

WEST PALM BEACH, Fla., July 15, 2024 (GLOBE NEWSWIRE) -- AFC Gamma, Inc. (Nasdaq: AFCG) ("Advanced Flower Capital" or "AFC") today announced that it plans to report earnings for the quarter ended June 30, 2024 on Wednesday, August 7, 2024. Advanced Flower Capital will host a conference call at 10:00 am Eastern Time on Wednesday, August 7, 2024 to discuss its quarterly financial results. All interested parties are welcome to participate. The call will be available through a live audio webcast at the Investor ...