After dropping 52%, IIPR is now trading at an 8x P/AFFO, significantly below historical levels.
According to GuruFocus, using IIPR has a Fair Value of $178 implying a 61.92% margin of safety based on EPS w/out NRI, by FCF, a 76% margin of safety, and by adjusted divi 57%
The PharmaCann lease defaults accounts for 16.5% of IIPR's annual base rent, its largest tenant. This is not the first time IIPR has dealt with tenant defaults. IIPR has a better chance of recovering the lost revenue in a shorter time than in the 2022 defaults due to the locations and high demand in those areas.
On a technical note, the SP is trading near historical supply/demand zones which may provide support for a bottom. the RSI dipped to a historical low of 11.3. Historically, when the RSI dips to 20 and then starts trending positive, an average of 65% gain followed before beginning an intermediate trend or breaking the primary trend.
The sell-off is exaggerated given the overall fundamental condition of the company and the % of revenue affected. The timing of the news contributed to the steep sell-off with tax-loss harvesting.
Although a speculative industry due to unknown future legislation, IIPR remains the premier cannabis REIT. I believe the company will increase positive FCF once again and quickly recover revenue as it has in the past while continuing to diversify its ABR streams.
According to GuruFocus, using IIPR has a Fair Value of $178 implying a 61.92% margin of safety based on EPS w/out NRI, by FCF, a 76% margin of safety, and by adjusted divi 57%
The PharmaCann lease defaults accounts for 16.5% of IIPR's annual base rent, its largest tenant. This is not the first time IIPR has dealt with tenant defaults. IIPR has a better chance of recovering the lost revenue in a shorter time than in the 2022 defaults due to the locations and high demand in those areas.
On a technical note, the SP is trading near historical supply/demand zones which may provide support for a bottom. the RSI dipped to a historical low of 11.3. Historically, when the RSI dips to 20 and then starts trending positive, an average of 65% gain followed before beginning an intermediate trend or breaking the primary trend.
The sell-off is exaggerated given the overall fundamental condition of the company and the % of revenue affected. The timing of the news contributed to the steep sell-off with tax-loss harvesting.
Although a speculative industry due to unknown future legislation, IIPR remains the premier cannabis REIT. I believe the company will increase positive FCF once again and quickly recover revenue as it has in the past while continuing to diversify its ABR streams.
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Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.