What to Expect from IIPR’s Earnings for Q3

IIPR’s earnings results for the third quarter of 2019 are scheduled to come out on November 6. The quarter ended in September 2019. Headquartered in California, Innovative Industrial Properties (IIPR) is a REIT or real estate investment trust that focuses on providing capital to the medical marijuana industry.

IIPR has fared better than the majority of marijuana companies on the NYSE. The company’s share price up 66.42% in year-to-date. Meanwhile, peers Aurora Cannabis (ACB), Canopy Growth (CGC), Cronos Group, and Aphria (APHA) are down 27.82%, 26.65%, 20.89%, and 8.79%, respectively.

IIPR’s stock price is down 45.86% from its 52-week high of $139.53 on July 11, 2019. Still, the stock is up 90.93% from its 52-week low of $39.56.

Will IIPR’s earnings results on Thursday push the stock up? Or will the Q3 results lead the company to give up its year-to-date share price gains?

Analysts’ estimates for IIPR’s earnings

Analysts expect Innovative Industrial Properties to report revenue of $10.70 in the third quarter, implying a year-over-year rise of 172.58%. They also expect the company to report $13.12 million in revenues in the fourth quarter, implying a year-over-year rise of 174.38%. Analysts have estimated IIPR’s fiscal 2019 revenues to be $39.25 million, a year-over-year rise of 165.45%.

Wall Street also expects Innovative Industrial Properties to report non-GAAP earnings per share of $0.48 in the third quarter. This implies a year-over-year improvement of 126.19%. They also expect the company to report non-GAAP EPS of $0.58 in the fourth quarter, a year-over-year improvement of 139.58%. Wall Street has estimated IIPR’s earnings per share for fiscal 2019, on a non-GAAP basis, at $1.73, a year-over-year rise of 130.67%.

In the second quarter, IIPR reported revenues of $8.62 million, a year-over-year rise of 160.02%. These revenues came in ahead of the consensus estimate by $0.25 million. IIPR’s earnings per share of $0.3 for Q2 marked a year-over-year rise of 76.47%. The performance also exceeded the consensus by $0.01.

IIPR is focusing on adding new properties across states

At the end of October 30, 2019, IIPR owned 38 properties with aggregate 2.8 million rentable square feet. The company has licensed all these properties to medical cannabis operators. Of this, 903,000 square feet are either under development or redevelopment.

As of August 8, IIPR owned 26 properties with greater than 2.0 million rentable square feet. The company has managed to significantly increase the number of properties and aggregate rentable square feet in the third quarter.

On August 12, IIPR announced the acquisition of a property in Pennsylvania. The company also announced a long-term lease and development agreement with PharmaCann LLC. In accordance with the agreement, the latter will construct an industrial facility and greenhouse facility on the property.  Then, on September 12, the company announced the acquisition of a four-property portfolio comprising of 79,000 square feet of industrial space in California. Concurrently, IIPR also entered into long-term leases for this property with Vertical, a subsidiary of Medical Investor Holdings LLC.

On October 9, IIPR completed the acquisition of a property comprising around 156,000 square feet of industrial space in Michigan. The company also entered into a long-term lease with LivWell Michigan for this property.

On October 22, IIPR completed the acquisition of two Illinois properties. The company also entered into a long-term lease agreement with Cresco labs for these properties.

And then, on October 30, IIPR announced the completion of a sale-leaseback transaction with Grassroots for an Illinois property. This property is an industrial space spread across 70,000 square feet.

Capital invested and yield to impact IIPR earnings

IIPR has invested $403.3 million for acquiring properties as of October 30, 2019. The company has also reserved an additional $139.7 million as reimbursements to specific sellers and tenants. The company’s average yield as of October 30 was 13.8%. This is a decline as compared to the company’s blended yield of 14.6% as of August 8. In the first seven months of 2019, IIPR acquired 15 properties across six states for an investment of $167 million.

Rival cannabis companies’ earnings in the first week of November

GW Pharmaceuticals (GWPH) will release its third-quarter earnings results on November 5. Analysts expect the company to report revenues of $85.32 million in the third quarter and $296.76 million in fiscal 2019. They have also projected the company’s non-GAAP EPS to be -$0.85 in the third quarter and -$0.40 in fiscal 2019.

CV Sciences (CVSI) is slated to release its third-quarter earnings results on November 5 as well. Wall Street is expecting the company to report revenues of $18.16 million in the third quarter and $70.73 million in fiscal 2019. They’re also expecting non-GAAP EPS at $0.007 in the third quarter and -$0.50 in fiscal 2019.

Meanwhile, ScottsMiracle-Gro (SMG) will release its fourth-quarter earnings results on November 6. Analysts expect the company to report revenues of $451.55 million in the fourth quarter and $3.11 billion in fiscal 2019. They also anticipate non-GAAP EPS of -$0.86 in the fourth quarter but $4.51 in fiscal 2019.

Finally, Kushco Holdings (KSHB) will release its fourth-quarter earnings results on November 7. Analysts expect the company to report revenues of $45.79 million in the fourth quarter and $147.78 million in fiscal 2019. They also expect the company’s non-GAAP EPS to be -$0.12 and -$0.45 in fiscal 2019.