Sachem Capital (SACH, Financial) has successfully finalized a private placement involving $100 million in Senior Secured Notes, set to mature on June 11, 2030. The initial transaction included a draw of $50 million upon closing, with an obligation to draw the remaining $50 million by May 15, 2026. The Notes feature an annual fixed interest rate of 9.875%, payable quarterly, alongside a 1% commitment fee on any undrawn portion. Both Sachem Capital and its wholly-owned subsidiary, Sachem Capital Corporation Intermediate, provide full and unconditional guarantees on these payments.
These Notes have received an A rating from the independent agency Egan-Jones Ratings Company, indicating their investment-grade status. The company plans to utilize the funds for several strategic purposes, such as repaying existing debts, initiating new investments, and redeeming 7.75% unsecured notes due in September 2025.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 2 analysts, the average target price for Sachem Capital Corp (SACH, Financial) is $1.88 with a high estimate of $2.50 and a low estimate of $1.25. The average target implies an upside of 58.90% from the current price of $1.18. More detailed estimate data can be found on the Sachem Capital Corp (SACH) Forecast page.
Based on the consensus recommendation from 5 brokerage firms, Sachem Capital Corp's (SACH, Financial) average brokerage recommendation is currently 2.6, indicating "Hold" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for Sachem Capital Corp (SACH, Financial) in one year is $0.29, suggesting a downside of 75.42% from the current price of $1.18. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the Sachem Capital Corp (SACH) Summary page.
SACH Key Business Developments
Release Date: May 01, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Sachem Capital Corp (SACH, Financial) has two signed term sheets with well-respected lenders, indicating potential for future financing transactions.
- The company has successfully diversified its business model and cash flow sources through partnerships with Urbane New Haven and Shem Creek Capital.
- Income from preferred membership in Shem Creek LLC investment earnings increased by approximately 71.7% compared to the first quarter of 2024.
- Total operating expenses decreased by 16.9% compared to the prior year's quarter, reflecting cost management efforts.
- Sachem Capital Corp (SACH) maintains solid liquidity with cash and cash equivalents increasing to $24.4 million from $18.1 million at the start of the year.
Negative Points
- Total revenue for the first quarter decreased by 31.9% compared to the same period in 2024, primarily due to fewer loan originations and elevated levels of non-performing loans.
- The company still holds $153 million of non-performing loans, with a net increase due to certain loans moving from performing to non-performing status.
- Net loss attributable to common shareholders was $0.2 million, compared to $3.6 million of income for the first quarter of 2024.
- Book value per common share decreased from $2.64 at year-end 2024 to $2.57, driven by dividends paid in excess of book net earnings.
- The macro environment presents challenges such as ongoing tariff uncertainty, increased costs from materials, and restrictive bank lending policies.
