Cannabis market-focused mortgage REIT Advanced Flower Capital misses Q2 estimates, to convert to BDC

Advanced Flower Capital

14/08/2025 12:47

Overview

Advanced Flower Capital Q2 GAAP net loss of $13.2 mln, reflecting cannabis market challenges

Distributable Earnings of $3.4 mln missed analyst expectations, per LSEG data

Co plans to convert from mortgage REIT to BDC, expanding investment opportunities

Outlook

Company plans to convert from REIT to BDC, pending shareholder approval

Company aims to expand investment opportunities beyond real estate assets

Company sees potential in lending to ancillary cannabis businesses

Company expects broader investment mandate to diversify exposure

Result Drivers

NON-ACCRUAL CREDITS - Focus on resolving non-accrual credits impacted financial results, per CEO Dan Neville

LACK OF CAPITAL - Continued lack of capital in cannabis market affecting operations, according to CEO

EXPANDED MANDATE - Expansion of investment mandate to include non-cannabis middle market companies

Key Details

Metric
Beat/Miss
Actual
Consensus Estimate
Q2 Distributable Earnings
Miss
$3.40 mln
$4.89 mln (6 Analysts)
Q2 Net Income
-$13.20 mln
Q2 Dividend
$0.15


Analyst Coverage

The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 4 "strong buy" or "buy", 3 "hold" and no "sell" or "strong sell"

The average consensus recommendation for the specialized reits peer group is "buy"

Wall Street's median 12-month price target for Advanced Flower Capital Inc is $10.00, about 54.4% above its August 13 closing price of $4.56

The stock recently traded at 4 times the next 12-month earnings vs. a P/E of 5 three months ago

Press Release: ID:nGNX1vX9h9

(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)