Please ensure Javascript is enabled for purposes of website accessibility

Innovative Industrial Properties Slips Nearly 3% on Q1 Earnings Miss

By Eric Volkman – May 8, 2020 at 9:00AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The marijuana REIT didn't quite meet analyst estimates.

The stock of Innovative Industrial Properties (IIPR -5.31%) received a smack on the chin from investors on Thursday for its first-quarter fiscal 2020 results.

The company, the only marijuana-focused real estate investment trust (REIT) traded on the stock market, released those quarterly figures after hours on Wednesday. They showed that the company booked $21.1 million in revenue, more than triple the Q1 2019 result.

Innovative's net income also rose more than threefold to hit $11.5 million, or $0.72 per share. Adjusted funds from operations (FFO), considered a more accurate measure of profitability for REITs, ballooned to almost $17.8 million ($1.12 per share) from the year-ago figure of just under $5.3 million.

Marijuana in a corporate grow space.

Image source: Getty Images.

On average, analysts following the stock had modeled $19.3 million on the top line, and $0.77 in per-share net profit. 

The quarter was a relatively busy one for Innovative. It acquired a total of nine properties that collectively encompass 1.1 million square feet of rentable space, in Illinois, Massachusetts, Michigan, Virginia, Ohio, Colorado, and Florida. The company said the aggregate investment (purchase price plus development and/or reimbursement costs) into this real estate was just over $202 million.

Like the wider marijuana industry, Innovative has benefited from many municipalities and states across the U.S. deeming cannabis dispensaries essential businesses, and therefore allowed to operate to some extent through the pandemic. Nevertheless, cannabis companies are feeling the strain of coronavirus-related economic hardship; Innovative said it has provided rent deferrals to three of its tenants.

Investors reacted to these developments with disappointment; in contrast to the gains of the broader stock market, Innovative's shares closed down on Thursday, dropping nearly 2.7%.

Eric Volkman has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Innovative Industrial Properties. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Innovative Industrial Properties Stock Quote
Innovative Industrial Properties
$92.29 (-5.31%) $-5.18

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 10/05/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.