Why Innovative Industrial Properties Stock Crumbled Today

Date:

Innovative Industrial Properties (NYSE: IIPR) released its latest set of quarterly-earnings figures after market hours Wednesday, and investors reacted accordingly on Thursday. Unfortunately, that reaction was negative, with the market pushing the stock’s value down by nearly 11%. The bellwether S&P 500 index, by contrast, landed in positive territory with a 0.7% gain on Thursday.

Innovative, a highly specialized real estate investment trust (REIT) that focuses on properties used by the cannabis industry, unveiled its third-quarter numbers. These showed that the company earned $76.5 million in revenue for the period, which was down by nearly 2% from the $77.8 million in the same quarter of 2023. It also missed the consensus-analyst forecast of $77.4 million.

Start Your Mornings Smarter! Wake up with Breakfast news in your inbox every market day. Sign Up For Free »

Net income also slipped, declining to $39.7 million ($1.37 per share) from the year-ago profit of $41.3 million. Those prognosticators tracking Innovative stock were expecting $1.45 per share. Meanwhile adjusted funds from operations (AFFO), the most-critical profitability metric for REITs, also headed south. It was $64.3 million against the $64.8 million of 2023’s Q3.

In the earnings release, Innovative attributed its revenue decline chiefly to a $3 million drop in rent and property-management fees.

Another factor in the Innovative sell-off was timing. The results were posted very shortly after election day, in which several marijuana-legalization initiatives were defeated by voters — most notably in the very populous state of Florida.

For many, cannabis just doesn’t look like a good investment now, but I think this presents a good buying opportunity in Innovative stock. The company is one of the very few marijuana REITs available anywhere, and despite the electoral setbacks, at some point, this country is bound to effectively legalize the drug. I’d seriously consider snapping up some Innovative on the price dip.

Ever feel like you missed the boat in buying the most successful stocks? Then you’ll want to hear this.

On rare occasions, our expert team of analysts issues a “Double Down” stock recommendation for companies that they think are about to pop. If you’re worried you’ve already missed your chance to invest, now is the best time to buy before it’s too late. And the numbers speak for themselves:

Share post:

Popular

More like this
Related

What’s next for Daniel Jones after classy split with Giants? NFL executives weigh in

As Daniel Jones stepped up to the podium Thursday,...

Slot drops 27y/o in three key changes – Predicted Liverpool XI v Southampton

Liverpool will look to maintain their lead at the...

The man who ended Nadal’s career helps the Netherlands take a Davis Cup lead against Germany

MALAGA, Spain (AP) — The last man to face...

Nvidia Falls On Rare Downgrade, Missed ‘Bullish Whispers’

Nvidia (NVDA) beat earnings targets and its outlook was...