Advanced Flower Capital Inc. (NASDAQ: AFCG)

Sector: Real Estate Industry: REIT - Mortgage CIK: 0001822523
Market Cap 61.35 Mn
P/B 0.36
P/E -2.72
P/S 2.27
ROIC (Qtr) 5.16
Div Yield % 29.86
Rev 1y % (Qtr) -26.47
Total Debt (Qtr) 111.06 Mn
Debt/Equity (Qtr) 0.66

About

Price action

Investment thesis

Bull case

  • Strong tangible asset base of 288.72M provides 2.60x coverage of total debt 111.06M, indicating robust asset backing and low credit risk.
  • Strong operating cash flow of 14.02M provides 3.43x coverage of SG&A expenses 4.09M, showing efficient operational cost management.
  • Operating cash flow of 14.02M provides strong 4.37x coverage of operating expenses 3.20M, showing operational efficiency.
  • Strong free cash flow of 14.02M provides 3.43x coverage of SG&A expenses 4.09M, indicating efficient cost management.
  • Free cash flow of 14.02M provides solid 4.37x coverage of operating expenses 3.20M, showing operational efficiency.

Bear case

  • Operating cash flow of 14.02M barely covers its investment activities of (33.09M), with a coverage ratio of -0.42, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Operating cash flow of 14.02M provides thin coverage of dividend payments of (23.18M) with a -0.60 ratio, suggesting potential dividend sustainability issues if operational performance deteriorates.
  • Operating cash flow of 14.02M provides minimal -10.92x coverage of tax expenses of (1.28M), suggesting potential tax planning inefficiencies or unsustainable tax positions.
  • Free cash flow of 14.02M represents just -0.37x of debt issuance (38.21M), suggesting concerning reliance on leverage rather than internal cash generation for growth.
  • R&D investment of 0 represents just 0x of SG&A expenses of 4.09M, indicating potential underinvestment in innovation relative to administrative overhead.

Peer comparison

Companies in the REIT - Mortgage
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 NLY Annaly Capital Management Inc 13.98 Bn 10.42 8.17 107.02 Bn
2 AGNC AGNC Investment Corp. 11.44 Bn 16.65 30.74 95.01 Bn
3 STWD Starwood Property Trust, Inc. 6.55 Bn 17.88 3.63 21.43 Bn
4 RITM Rithm Capital Corp. 5.78 Bn 7.43 1.16 34.97 Bn
5 BXMT Blackstone Mortgage Trust, Inc. 3.36 Bn 31.37 6.62 15.46 Bn
6 ARR Armour Residential REIT, Inc. 1.83 Bn 34.78 15.64 16.56 Bn
7 DX Dynex Capital Inc 1.59 Bn 9.04 6.88 11.75 Bn
8 ABR Arbor Realty Trust Inc 1.50 Bn 9.84 2.84 10.40 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 0.54 0.83
EV to Cash from Ops. EV/CFO 11.17 -102.96
EV to Debt EV to Debt 1.41 1.31
EV to EBIT EV/EBIT -6.56 -260.73
EV to EBITDA EV/EBITDA 10.05 -16.37
EV to Free Cash Flow [EV/FCF] EV/FCF 11.17 3.47
EV to Market Cap EV to Market Cap 2.58 9.18
EV to Revenue EV/Rev 5.80 26.77
Price to Book Value [P/B] P/B 0.36 0.68
Price to Earnings [P/E] P/E -2.69 -4.85
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Div Coverage (Qtr) -0.97 -0.55
Dividend Payout Ratio % Div Payout % (Qtr) -81.10 29.47
Dividend per Basic Share Div per Share (Qtr) 0.86 1.15
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 135.65 57.60
Interest Coverage Interest Coverage 0.00 -0.17
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex Growth (1y) % 0.00 37.60
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) -63.07 24.22
Dividend Growth (1y) % Div 1y % (Qtr) -39.44 4.53
EBIAT Growth (1y) % EBIAT 1y % (Qtr) -362.94 17.83
EBITDA Growth (1y) % EBITDA 1y % (Qtr) -55.45 9.86
EBIT Growth (1y) % EBIT 1y % (Qtr) -336.94 20.98
EBT Growth (1y) % EBT 1y % (Qtr) -336.94 11.17
EPS Growth (1y) % EPS 1y % (Qtr) -365.00 59.25
FCF Growth (1y) % FCF 1y % (Qtr) -45.19 59.63
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) -45.36 20.65
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.09 0.04
Cash Payout Ratio Cash Payout (Qtr) 1.65 0.83
Cash Ratio Cash Ratio 0.00 0.00
Current Ratio Current Ratio 0.00 0.00
Debt to Equity Ratio Debt/Equity (Qtr) 0.66 5.05
Interest Cover Ratio Interest Cover Ratio 0.00 -0.17
Times Interest Earned Times Interest Earned 0.00 -0.17
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) -88.30 137.11
EBIT Margin % EBIT Margin % (Qtr) -88.33 142.19
EBT Margin % EBT Margin % (Qtr) -88.33 129.16
Gross Margin % Gross Margin % (Qtr) 84.70 117.97
Net Profit Margin % Net Margin % (Qtr) -83.60 125.89