Innovative Industrial Properties (IIPR) AI Stock Analysis

• Market Cap: $1.54B
• Dividend Yield: 14.18%
• Average Volume (3M): 282.40K
• Price to Earnings (P/E): 11.9
• Beta (1Y): 1.02
• Revenue Growth: -7.80%
• EPS Growth: -18.78%
• Country: US
• Employees: 21
• Sector: Real Estate
• Sector Strength: 53
• Industry: REIT - Industrial
• EPS (TTM): 0.86
• Shares Outstanding: 28,022,700
• 10 Day Avg. Volume: 348,780
• 30 Day Avg. Volume: 282,404
• PEG Ratio: -2.82
• Price to Book (P/B): 0.97
• Price to Sales (P/S): 6.10
• P/FCF Ratio: 7.28
• Enterprise Value/Market Cap: 1.16
• Enterprise Value/Revenue: 6.20
• Enterprise Value/Gross Profit: 6.90
• Enterprise Value/Ebitda: 7.93
• 1Y Price Target: $67.50
• Price Target Upside: 22.75% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 4

• Rating: 69 Neutral
• Price Target: $61.00 ▲(10.93% Upside)

Innovative Industrial Properties benefits from strong profitability and an attractive valuation, but faces challenges with revenue declines and tenant issues. The strategic diversification into life sciences is a positive step, but risks in the cannabis sector remain a concern.

Positive Factors

Strategic Diversification

The investment in IQHQ diversifies IIPR's portfolio into life sciences, potentially stabilizing revenue streams and reducing reliance on the volatile cannabis sector.

Strong Balance Sheet

A strong balance sheet with low leverage and high liquidity provides IIPR with the flexibility to pursue growth opportunities and withstand industry volatility.

High Profit Margins

IIPR's high profit margins indicate efficient operational management and strong profitability, supporting long-term financial health and shareholder returns.

Negative Factors

Revenue Decline

The decline in revenue due to tenant defaults poses a challenge to sustaining growth, potentially impacting future earnings and cash flow stability.

Tenant Defaults

Tenant defaults and legal issues can lead to revenue loss and increased operational costs, affecting IIPR's financial performance and tenant relations.

Cannabis Market Challenges

The cannabis sector's regulatory and competitive challenges could hinder IIPR's growth prospects, affecting tenant stability and property demand.

Innovative Industrial Properties Business Overview & Revenue Model

Company Description

Innovative Industrial Properties, Inc. is a self-advised Maryland corporation focused on the acquisition, ownership and management of specialized properties leased to experienced, state-licensed operators for their regulated medical-use cannabis facilities. Innovative Industrial Properties, Inc. has elected to be taxed as a real estate investment trust, commencing with the year ended December 31, 2017.

How the Company Makes Money

IIPR generates revenue primarily through long-term leases with its tenants, who are licensed cannabis operators. The company typically structures its leases with favorable terms, including rent escalations and options for tenants to purchase the properties at predetermined prices. This creates a stable and predictable revenue stream. Additionally, IIPR benefits from the increasing demand for cannabis-related real estate as more states legalize cannabis use, leading to higher occupancy rates and potential rent increases. The company's approach also includes strategic acquisitions of properties that align with its investment criteria, which further enhances its revenue potential. Partnerships with reputable cannabis operators contribute to its financial stability and growth, as these tenants are often well-established in their markets and have demonstrated success in their operations.

Innovative Industrial Properties Financial Statement Overview

Summary

Innovative Industrial Properties maintains a strong financial position with impressive profit margins and efficient cash flow generation. The company effectively manages debt levels, supporting stability and growth potential. However, attention to revenue growth is necessary to sustain long-term profitability and shareholder value.

Income Statement

Innovative Industrial Properties demonstrates strong profitability with consistent gross and net profit margins. The TTM gross profit margin is 90.44% and net profit margin is 50.30%, indicating robust cost management and profitability. Despite a slight decline in revenue from the previous year, the company's EBIT and EBITDA margins remain impressive at 52.60% and 79.30%, respectively, reflecting efficient operational performance.

Balance Sheet

The company's balance sheet is solid, with a low debt-to-equity ratio of 0.15, indicating prudent financial leverage. The equity ratio stands at 81.68%, showcasing strong ownership of assets by equity holders. Return on equity is also competitive at 7.98% for the TTM period, reflecting effective use of shareholders' capital. However, modest growth in stockholders' equity warrants attention.

Cash Flow

Cash flow health is robust, with a significant operating cash flow to net income ratio of 1.57, suggesting effective conversion of income into cash. The free cash flow has grown positively, with a TTM free cash flow of $241 million, indicating ample liquidity to support operations and growth initiatives. Consistent positive free cash flow contrasts with earlier years, showing a strong turnaround.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	287.88M	308.52M	309.51M	276.36M	204.55M	116.90M
Gross Profit	258.74M	280.05M	284.61M	265.84M	200.11M	111.94M
EBITDA	225.33M	248.72M	248.88M	230.92M	177.15M	97.76M
Net Income	137.34M	161.66M	165.59M	154.39M	113.99M	65.73M
Balance Sheet
Total Assets	2.31B	2.38B	2.39B	2.41B	2.08B	1.77B
Cash, Cash Equivalents and Short-Term Investments	99.67M	146.25M	140.25M	87.12M	81.10M	126.01M
Total Debt	289.86M	297.87M	300.88M	301.50M	326.09M	137.75M
Total Liabilities	424.65M	441.99M	438.12M	452.94M	472.90M	243.11M
Stockholders Equity	1.88B	1.94B	1.95B	1.96B	1.61B	1.52B
Cash Flow
Free Cash Flow	225.37M	258.45M	255.54M	-139.75M	-185.79M	-419.01M
Operating Cash Flow	225.37M	258.45M	255.54M	234.13M	188.75M	110.81M
Investing Cash Flow	-20.07M	-56.00M	-6.79M	-396.20M	-384.09M	-1.03B
Financing Cash Flow	-226.46M	-197.90M	-195.63M	164.22M	155.76M	924.99M

Innovative Industrial Properties Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 54.99
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For IIPR, the sentiment is Neutral. The current price of 54.99 is above the 20-day moving average (MA) of 54.32, above the 50-day MA of 52.35, and below the 200-day MA of 56.75, indicating a neutral trend. The MACD of 0.11 indicates Positive momentum. The RSI at 50.11 is Neutral, neither overbought nor oversold. The STOCH value of -7.35 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for IIPR.

Innovative Industrial Properties Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
PLYM	78 Outperform	$999.53M	7.70	24.04%	4.30%	-3.63%	436.37%
FR	74 Outperform	$7.03B	25.20	10.25%	3.31%	9.66%	-4.60%
STAG	73 Outperform	$6.66B	27.64	6.80%	4.22%	8.56%	22.20%
IIPR	69 Neutral	$1.54B	11.89	7.04%	14.18%	-7.80%	-18.78%
LXP	69 Neutral	$2.67B	32.63	4.24%	6.03%	6.64%	210.89%
ILPT	54 Neutral	$390.72M	-4.18	-17.71%	1.37%	0.36%	11.92%
Sector *	65 Neutral	$2.17B	12.19	3.79%	4.94%	3.15%	1.96%

Innovative Industrial Properties Corporate Events

Innovative Industrial Properties Invests $270M in IQHQ

On August 6, 2025, Innovative Industrial Properties announced a strategic investment of up to $270 million in IQHQ, a life science real estate platform. This investment, comprising a revolving credit facility and preferred stock purchase, is expected to enhance earnings for IIP shareholders and diversify its portfolio beyond cannabis. The transaction positions IIP to capitalize on the life science industry’s growth, with potential benefits from warrants and real estate acquisitions from IQHQ.

Innovative Industrial Properties Reports Q2 2025 Financial Results

On August 6, 2025, Innovative Industrial Properties reported its second quarter 2025 results, highlighting a decrease in total revenues to $62.9 million, primarily due to tenant defaults and property sales. The company repurchased $20 million of common stock and maintained strong liquidity exceeding $190 million. Despite challenges, IIP continues to focus on improving long-term financial performance by replacing underperforming tenants with more stable operators and actively managing its property portfolio.

Innovative Industrial Properties Holds Annual Stockholders’ Meeting

On June 11, 2025, Innovative Industrial Properties, Inc. held its annual stockholders’ meeting where key decisions were made, including the election of five directors and the ratification of BDO USA, P.C. as the independent accounting firm for 2025. The meeting also included an advisory vote on executive compensation, reflecting the company’s ongoing governance and operational strategies.