REFI
Chicago Atlantic Real Estate Finance, Inc.
$9.42
Real Estate Investment Trust
85%
P/FFO × Default REIT Multiple
Strong
·
Conviction
Undervalued
Trading 74.8% below fair value
You pay
$9.42
Bear
$30.75
Fair
$37.34
Bull
$43.93
Bear
$30.75
+226.4%
$1.69 FFO × 18x
Fair
$37.34
+296.4%
$1.69 FFO × 22x
Bull
$43.93
+366.3%
$1.69 FFO × 26x
Adjust Assumptions
22.1x
$
Key Value Driver
FFO/share ($1.69) × default P/FFO multiple
Implied Market Multiple
5.6x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (7 analysts)
$16.00
Divergence from AlphaVal
133%
Summary
At $1.69 FFO/share with a 22x default REIT multiple, the base-case value is $37.34 per share. Dividend yield: 20.0%. DDM cross-check: $41.12.
Warnings
Standard profit figures are misleading for real estate companies — large non-cash accounting charges make profits look artificially low. Dividend yield and funds from operations are better measures.
Dividend yield of 20.0% is unusually high — make sure the company generates enough cash to keep paying it.
Wall Street's average price target is $16.00 (from 7 analysts). Our estimate is 133% above the consensus -- consider that gap carefully.
Key Risks
- P/E and EV/EBITDA are structurally wrong for REITs — use P/FFO and NAV
- Interest rate sensitivity: REIT multiples compress when rates rise
- FFO approximation (NI + D&A) may include gains on property sales — verify