Chicago Atlantic Real Estate Finance (NASDAQ:REFI) Posts Earnings Results, Misses Estimates By $0.02 EPS

Key Points

• Chicago Atlantic Real Estate Finance reported quarterly EPS of $0.46, missing analyst expectations by $0.02, while revenue came in at $13.12 million versus the $13.69 million consensus.
• On the conference call, management pointed to the DOJ’s Schedule III cannabis rescheduling process as a potential positive for borrowers and said the company has a $482 million pipeline of opportunities.
• The company maintained its $0.47 quarterly dividend and cited steady portfolio income, but credit reserves increased materially, with CECL reserves rising to $8.7 million as some loans were downgraded.

Chicago Atlantic Real Estate Finance (NASDAQ:REFI - Get Free Report) announced its quarterly earnings results on Thursday. The company reported $0.46 EPS for the quarter, missing analysts' consensus estimates of $0.48 by ($0.02), FiscalAI reports. The business had revenue of $13.12 million during the quarter, compared to the consensus estimate of $13.69 million. Chicago Atlantic Real Estate Finance had a net margin of 55.54% and a return on equity of 11.92%.

Here are the key takeaways from Chicago Atlantic Real Estate Finance's conference call:

• Management highlighted a major regulatory development — the DOJ's April rescheduling of certain medical cannabis to Schedule III and an administrative hearing June 29–July 15 — and says this could improve operator cash flows (via 280E relief) and boost valuations; the company also reports a $482 million pipeline (about $133 million real-estate backed).
• Chicago Atlantic reported steady portfolio income (Q1 weighted average yield to maturity of 15.8%), distributable earnings per share of ~$0.47 and a maintained quarterly dividend of $0.47, with book value per share of $14.39 and roughly <$strong>$54 million of net liquidity available.
• Credit reserves rose materially — CECL reserves increased by roughly $3.8 million to $8.7 million (about 2.1% of loans) driven by specific downgrades (notably loan #36) despite non-accruals falling to 4.8% after loan #9 returned to accrual.
• The portfolio mix (35% fixed / 65% floating) and structural protections — nearly all prime‑based loans are at their floors and floating loans lack interest rate caps — means limited downside to further rate declines and a competitive funding profile versus peers.

Chicago Atlantic Real Estate Finance Trading Up 2.9%

Shares of REFI traded up $0.34 during trading hours on Friday, reaching $11.96. 304,561 shares of the company traded hands, compared to its average volume of 150,003. The firm has a market cap of $253.67 million, a price-to-earnings ratio of 8.31 and a beta of 0.25. Chicago Atlantic Real Estate Finance has a 12-month low of $10.74 and a 12-month high of $15.20. The stock's fifty day moving average price is $11.94 and its 200 day moving average price is $12.35.

Chicago Atlantic Real Estate Finance Announces Dividend

The firm also recently announced a quarterly dividend, which was paid on Wednesday, April 15th. Stockholders of record on Tuesday, March 31st were given a dividend of $0.47 per share. This represents a $1.88 annualized dividend and a dividend yield of 15.7%. The ex-dividend date was Tuesday, March 31st. Chicago Atlantic Real Estate Finance's dividend payout ratio (DPR) is 111.90%.

Analyst Upgrades and Downgrades

A number of brokerages have issued reports on REFI. Zacks Research upgraded Chicago Atlantic Real Estate Finance from a "hold" rating to a "strong-buy" rating in a research report on Thursday, March 19th. Oppenheimer cut Chicago Atlantic Real Estate Finance from an "outperform" rating to a "market perform" rating in a report on Monday, March 16th. One investment analyst has rated the stock with a Strong Buy rating and two have assigned a Hold rating to the company's stock. According to data from MarketBeat.com, Chicago Atlantic Real Estate Finance presently has an average rating of "Moderate Buy" and an average price target of $14.00.

Institutional Investors Weigh In On Chicago Atlantic Real Estate Finance

A number of institutional investors and hedge funds have recently added to or reduced their stakes in the stock. Jane Street Group LLC purchased a new position in shares of Chicago Atlantic Real Estate Finance during the first quarter worth approximately $186,000. Mercer Global Advisors Inc. ADV purchased a new stake in shares of Chicago Atlantic Real Estate Finance in the fourth quarter valued at approximately $183,000. Deutsche Bank AG boosted its holdings in shares of Chicago Atlantic Real Estate Finance by 35.5% in the fourth quarter. Deutsche Bank AG now owns 12,954 shares of the company's stock valued at $159,000 after purchasing an additional 3,397 shares during the period. Virtus Investment Advisers LLC bought a new position in Chicago Atlantic Real Estate Finance in the fourth quarter worth approximately $154,000. Finally, Odyssean LLC bought a new position in Chicago Atlantic Real Estate Finance in the fourth quarter worth approximately $147,000. Institutional investors own 25.48% of the company's stock.

Chicago Atlantic Real Estate Finance Company Profile

Chicago Atlantic Real Estate Finance, Inc NASDAQ: REFI is a publicly listed real estate finance company that specializes in originating and acquiring commercial real estate debt. Pursuant to its election to be treated as a real estate investment trust (REIT), REFI’s investment strategy focuses on floating-rate senior mortgage loans secured by income-producing properties across the United States. The company targets stabilized, performing assets in sectors such as multifamily, office, retail and industrial, aiming to generate attractive risk-adjusted returns through current income.

Established in 2015 and headquartered in Chicago, Illinois, REFI completed its initial public offering in 2019.

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