Will IIPR Still Be an Investor Favorite Post Q3 Earnings?


Nov. 20 2020, Updated 5:30 p.m. ET

Innovative Industrial Properties (IIPR) is set to report its fiscal 2019 third-quarter results after markets close tomorrow. IIPR stock, up 67.2% year-to-date, has been investor favorite.

Despite IIPR not being directly part of the cannabis sector, the company has gained a lot of attention from cannabis investors as a specialized REIT. It provides real estate solutions to medical cannabis players.

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Analysts’ expectations for IIPR’s Q3 results

In fiscal 2019’s third quarter, analysts expect Innovative Industrial’s sales to grow YoY (year-over-year) to $11.0 billion from $3.9 billion. They expect its EPS to grow 128.5% YoY to $0.48.

Analysts foresee revenue of around $13.8 billion for the company in the fourth quarter. In the full year, they expect its revenue and EPS to be around $40.3 billion and $1.73, respectively. Additionally, as the company is a REIT, we should use its FFO (funds from operations) and AFFO (adjusted FFO) to assess its operating performance. In the third quarter, analysts expect its FFO and AFFO to be around $0.72 and $0.69, respectively.

Peers’ earnings releases in November

Many prominent cannabis players are set to release their earnings results this month. Canopy Growth (CGC) (WEED) plans to report its fiscal 2020 second-quarter results on November 14. Analysts expect Canopy’s revenue to rise 384.3% YoY to 113 million Canadian dollars in the second quarter. In the full year, the company expects to hit 1 billion Canadian dollars in revenue. To know more, read Canopy Growth: Is $1 Billion in Sales Still Possible?

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Aurora Cannabis (ACB) is slated to report its fiscal 2020 first-quarter earnings results on November 11. Analysts expect Aurora’s revenue to rise 230% YoY to 98.0 million Canadian dollars. Meanwhile, Cronos (CRON) plans to report its fiscal 2019 third-quarter earnings results on November 12. Analysts expect the company’s revenue to rise 275.6% YoY to 13.9 million Canadian dollars. ScottsMiracle-Gro (SMG) and Kushco Holdings (KSHB) also plan to release their earnings results this month.

IIPR’s strategies to improve growth

As a specialized REIT, IIPR focuses on acquiring properties it uses to produce and cultivate medical cannabis. As of October 30, IIPR owned 38 properties covering 2.8 million rentable square feet in total. Since its second quarter, the company has acquired many other properties. The booming medical cannabis industry is driving growth for the company.

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Price coverage and stock performance for IIPR

This year, IIPR has become a cannabis investor favorite and enjoyed tremendous gains. In July, its stock tumbled when the company issued around 1.3 million common shares to the public. However, its second-quarter results helped its stock recover.

IIPR’s stock lost 17.7% in October, but closed 0.46% higher yesterday. Meanwhile, ACB, CGC, and Cronos returned 0.56%, 2.2%, and -1.7%, respectively, yesterday.

Of the three analysts covering Innovative Industrial Properties, two suggest “strong buy” and one suggests “hold.” Their $140.50 average target price implies an 85% upside for the stock.

How is the cannabis sector looking?

The cannabis sector has seen some bad days in the last two months. Various headwinds hit the sector, including HEXO’s disappointing news and vaping concerns. Many cannabis companies plan to expand into the vape business after Cannabis 2.0 legalization.

Marijuana legalization is still a question in many states. However, more states are exploring it. To learn more, potential investors could read Cannabis Investment: How to Buy ACB, CGC, and Others. Investing in a marijuana REITs such as IIPR is also an option.

Stay tuned to know more about IIPR’s third-quarter performance. Visit our Word on the Street page for analysts’ outlook. You could also check out 420 Investor Daily for cannabis news.


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