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AFC Gamma
(NASDAQ:AFCG)
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Rating:56Neutral
Price Target:
$3.00
▼(-11.50% Downside)
Action:Reiterated
Date:09/30/26
The score is held back primarily by weak cash generation (negative TTM operating and free cash flow) and a choppy multi-year earnings profile despite the recent profitability rebound. Technicals are a key offset, with the stock above major moving averages and positive momentum signals. Valuation is supportive via a high dividend yield, while earnings-call commentary is moderately constructive (NAV improvement, buybacks, liquidity) but tempered by ongoing legacy cannabis non-accrual/default risk and lumpy originations.
Positive Factors
Senior-secured portfolio yield
A wholly senior-secured, first-lien portfolio provides structural priority in borrower capital stacks, while the 13.2% yield supports recurring interest income. This positioning can help protect recoveries and sustain earning power as AFCG continues managing its lending portfolio.
Negative Factors
Negative cash generation
Negative trailing operating and free cash flow indicate that reported profitability has not translated into cash generation recently. Persistent cash burn could increase reliance on borrowings, repayments, or portfolio activity to fund operations and distributions, reducing financial flexibility during weaker lending conditions.
Read all positive and negative factors
Positive Factors
Negative Factors
Senior-secured portfolio yield
A wholly senior-secured, first-lien portfolio provides structural priority in borrower capital stacks, while the 13.2% yield supports recurring interest income. This positioning can help protect recoveries and sustain earning power as AFCG continues managing its lending portfolio.
Read all positive factors
AFC Gamma (AFCG) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$67.41M
Dividend Yield5%
Average Volume (3M)68.24K
Price to Earnings (P/E)15.8
Beta (1Y)1.17
Revenue Growth-7.99%
EPS GrowthN/A
CountryUS
Employees26
SectorFinancial
Sector Strength70
IndustryAsset Management
Share Statistics
EPS (TTM)0.19
Shares Outstanding22,468,756
10 Day Avg. Volume61,962
30 Day Avg. Volume68,238
Financial Highlights & Ratios
PEG Ratio0.01
Price to Book (P/B)0.36
Price to Sales (P/S)2.02
P/FCF Ratio5.64
Enterprise Value/Market Cap2.55
Enterprise Value/Revenue7.08
Enterprise Value/Gross Profit8.52
Enterprise Value/Ebitda13.19
Forecast
1Y Price TargetN/A
Price Target UpsideN/A
Rating ConsensusN/A
Number of Analyst Covering0
EPS Forecast (FY)0.7
Revenue Forecast (FY)$34.04M
AFC Gamma Business Overview & Revenue Model
Company Description
Advanced Flower Capital Inc. originates, structures, underwrites, invests in, and manages senior secured loans and other types of mortgage loans and debt securities for established companies operating in the cannabis industry. It primarily origina...
How the Company Makes Money
AFC Gamma makes money primarily by earning interest income on the loans it originates and holds in its investment portfolio. Its core revenue stream is recurring interest from predominantly senior secured loans (including loans collateralized by r...
AFC Gamma Earnings Call Summary
Earnings Call Date:Aug 13, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Nov 05, 2026
Earnings Call Sentiment Positive
The call conveyed constructive operational progress: NAV increased, share repurchases were accretive, portfolio yield remains attractive (13.2%), liquidity is ample (~$106.5M cash and >$70M deployable), and the company is actively redeploying into non-cannabis lower middle market opportunities (1.3B pipeline). Offsetting these positives are concentrated legacy cannabis non-accruals (including an active default and foreclosure), a quarter-over-quarter dip in reported investment income due to Q1 episodic exit fees, and originations that were lumpy and slower in Q2. Management has made tangible progress on legacy recoveries (Devi and DMA) and improved post-quarter leverage via revolver repayments, which supports a cautiously optimistic outlook.Positive Updates
Net Investment Income and Distribution Coverage
Net investment income of $3.5M, or $0.15 per weighted average share for Q2 2026, providing 3x coverage of the $0.05 quarterly distribution paid on 07/15/2026.
Negative Updates
Legacy Cannabis Non-Accrual Concentration and Defaults
Non-accrual loans remain concentrated in the legacy cannabis book. Justice Grown loan matured 05/01/2026 and is in maturity default; AFC has commenced Article 9 foreclosures and engaged SSG Advisors to market assets. Active litigation limits disclosure and creates uncertainty around ultimate recoveries.
Read all updates
Q2-2026 Updates
Positive
Negative
Net Investment Income and Distribution Coverage
Net investment income of $3.5M, or $0.15 per weighted average share for Q2 2026, providing 3x coverage of the $0.05 quarterly distribution paid on 07/15/2026.
Read all positive updates
Company Guidance
Management guided that they remain focused on redeploying capital into the lower middle market where they see attractive, disciplined opportunities, noting a $1.3 billion pipeline and ~$102 million of YTD new commitments while cautioning originations will be lumpy; they said they have ample capacity to act with over $70 million of deployable liquidity, $106.5 million of cash and cash equivalents, and the ability to co‑invest or syndicate larger transactions. Key Q2 metrics cited include NAV of $8.25 (+$0.35 q/q) with net assets of $187.3 million and total assets of $399.7 million, principal outstanding of $364.5 million across 17 loans, portfolio fair value $290 million, 100% senior‑secured first‑lien positioning and a weighted‑average yield (ex‑nonaccruals) of 13.2%; operating results were $8.7 million of total investment income and $3.5 million of net investment income ($0.15/share), providing 3x coverage of the $0.05/share distribution. Balance‑sheet and capital‑management metrics highlighted: $207 million of debt outstanding ( $110M secured revolver, $20M unsecured revolver, $77M senior notes) at a 6.3% weighted average rate, debt/equity 1.1x, net debt/equity 0.53x, asset coverage 190% (vs 150% requirement), Q2 buybacks of ~$2.8M (839k shares at $3.29; $0.17 NAV accretion) with $2.2M remaining under the $5M program. Management reiterated focus on cash‑flowing borrowers with $5M–$50M EBITDA, continued resolution of legacy cannabis non‑accruals (Devi sale for $12.5M with $2M deposit and ~80% participation; $58M principal repaid to date; DMA asset sales closed; Justice Grown in foreclosure), and a stated intermediate leverage target around 1.0x.AFC Gamma Financial Statement Overview
Summary
Income Statement
46
Neutral
Balance Sheet
58
Neutral
Cash Flow
28
Negative
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 24.30M | 31.32M | 51.90M | 51.80M | 81.95M | 34.36M |
| Gross Profit | 20.18M | 28.39M | 41.49M | 51.80M | 60.36M | 30.27M |
| EBITDA | 13.04M | -14.53M | 21.67M | 0.00 | 44.69M | 22.30M |
| Net Income | 5.21M | -20.67M | 16.78M | 20.95M | 35.93M | 21.00M |
Balance Sheet | ||||||
| Total Assets | 399.72M | 275.59M | 402.06M | 466.59M | 519.18M | 464.85M |
| Cash, Cash Equivalents and Short-Term Investments | 106.51M | 38.61M | 103.61M | 90.38M | 140.37M | 109.25M |
| Total Debt | 206.58M | 97.32M | 188.61M | 130.01M | 157.13M | 171.42M |
| Total Liabilities | 212.45M | 100.03M | 200.68M | 146.53M | 180.12M | 191.77M |
| Stockholders Equity | 187.27M | 175.57M | 201.38M | 320.05M | 339.06M | 273.08M |
Cash Flow | ||||||
| Free Cash Flow | 12.46M | 11.24M | 21.56M | 21.23M | 31.32M | 9.54M |
| Operating Cash Flow | 12.46M | 11.24M | 21.56M | 21.23M | 31.32M | 9.54M |
| Investing Cash Flow | -5.50M | 34.90M | -4.85M | 28.52M | -16.34M | -248.46M |
| Financing Cash Flow | 96.14M | -111.14M | -34.72M | -68.49M | 16.15M | 338.54M |
AFC Gamma Technical Analysis
Negative
3.39
Price Trends
3.34
Negative
3.15
Negative
2.88
Positive
Market Momentum
-0.10
Positive
39.65
Neutral
27.40
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AFCG, the sentiment is Negative. The current price of 3.39 is above the 20-day moving average (MA) of 3.23, above the 50-day MA of 3.34, and above the 200-day MA of 2.88, indicating a neutral trend. The MACD of -0.10 indicates Positive momentum. The RSI at 39.65 is Neutral, neither overbought nor oversold. The STOCH value of 27.40 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for AFCG.
AFC Gamma Risk Analysis
AFC Gamma disclosed 92 risk factors in its most recent earnings report. AFC Gamma reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
AFC Gamma Peers Comparison
UnderperformOutperform
Sector (68)
AFCG
AFC Gamma
3.04
-0.22
-6.66%
PW
Power REIT
6.84
-0.19
-2.69%
FPI
Farmland
10.00
0.23
2.35%
AFC Gamma Corporate Events
Business Operations and StrategyPrivate Placements and FinancingRegulatory Filings and Compliance
AFC Gamma Expands Revolving Credit Facility Commitments
Positive
Sep 29, 2026
On September 25, 2026, Advanced Flower Capital Inc. entered into a tenth amendment to its Loan and Security Agreement originally dated April 29, 2022, adjusting key terms of its credit facility with existing lenders. The amendment modifies conditi...
Business Operations and StrategyStock Buyback
AFC Gamma Continues Share Repurchases to Optimize Capital
Positive
Sep 15, 2026
Advanced Flower Capital Inc. has been executing a previously authorized common stock repurchase program of up to $5.0 million, allowing the company to buy back shares in the open market subject to regulatory and internal compliance constraints. Th...
Business Operations and StrategyStock Buyback
AFC Gamma Highlights Ongoing Share Repurchase Program Activity
Positive
Aug 26, 2026
Advanced Flower Capital Inc. has implemented a board‑authorized common stock repurchase program of up to $5 million, allowing the company to buy back shares on the open market subject to regulatory and internal compliance constraints. The re...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.