Breaking Down Power REIT (PW) Financial Health: Key Insights for Investors

You're looking at Power REIT (PW) right now and seeing a classic distressed asset play: a company with real operational challenges but also a sudden, significant financial recovery you can't ignore. The latest numbers from Q2 2025 show a dramatic shift, with net income hitting $157,706-a huge jump from the massive loss in the prior year, primarily because impairment expenses dropped from over $17 million to just $13,600. But here's the quick math: that positive net income is still overshadowed by an accumulated deficit of over $50.78 million as of June 30, 2025, and revenue for the quarter actually declined to $506,783 due to ongoing issues with cannabis-related tenant collections. Core Funds From Operations (Core FFO) did land at a positive $407,148, which is a good operational sign, but with a Debt/Equity ratio of 3.22 and the stock trading around the $0.71 mark in November 2025, we need to map the risk against this nascent opportunity. This isn't a simple buy or sell.

Revenue Analysis

You need to look past the top-line number for Power REIT (PW) because the recent figures show a sharp contraction, not growth. The company's revenue is primarily derived from its diversified real estate portfolio, which includes railroad infrastructure, land leased to utility-scale solar power projects, and Controlled Environment Agriculture (CEA) properties. The core issue is the severe decline in rental income from its CEA assets, particularly those tied to cannabis-related tenants.

For the third quarter of 2025, Power REIT reported total revenue of only $513,110, a massive year-over-year decline of approximately 64.04% compared to the $1,426,112 reported in Q3 2024. This isn't just a slight dip; it's a structural challenge driven by non-performing tenants and strategic asset disposition. To be fair, the second quarter of 2025 saw a smaller decline, with revenue decreasing to $506,783 from $519,349 in Q2 2024, a drop of about 2.42%. The full 2024 fiscal year revenue was $3.05 million, which had shown an annual growth rate of 37.23%, but that was largely due to recognizing security deposits as income from defaulted leases, which isn't sustainable operating revenue. It's a tough environment right now.

The revenue streams break down into three main segments, showing a reliance on traditional rental structures and financing leases. Here's the quick math for Q2 2025, which gives you a clear picture of where the money is coming from:

• Rental Income: $236,139 (approx. 46.59% of total revenue). This segment is under pressure from ongoing challenges in rental collection.
• Lease Income from Direct Financing Lease: $228,750 (approx. 45.14% of total revenue). This likely stems from the solar and railroad assets.
• Other Income: $41,894 (approx. 8.27% of total revenue).

The significant change in the revenue profile is a direct result of the company's strategic shift to address its troubled greenhouse portfolio. Power REIT has been actively selling non-core and underperforming assets, including two cannabis-related greenhouse properties in Ordway, Colorado, during 2025. Plus, the settlement of the Greenhouse Loan by providing deeds-in-lieu of foreclosure for properties in Michigan and Nebraska has removed those properties-and their associated rental income-from the balance sheet, which is a major factor in the Q3 2025 revenue drop. This is a painful but necessary Mission Statement, Vision, & Core Values of Power REIT (PW). move to stabilize the balance sheet, even if it crushes near-term revenue. The focus is defintely on maximizing value from the remaining, more stable assets like the railroad infrastructure and solar land leases.

Profitability Metrics

You need a clear picture of Power REIT's (PW) ability to turn revenue into profit, especially given the volatility in the specialized real estate sector. The short answer is that while the company's core leasing operations show very high gross profitability, its bottom line (net profit) is still trying to climb out of a deep hole, reflecting significant past non-operating costs.

For the most recent quarter, Q3 2025, the company showed a positive net income, but the trailing twelve months (TTM) data, which smooths out quarterly noise, still paints a challenging picture. Here's the quick math on the key margins, using the TTM ending September 30, 2025, for a broader view, plus the latest quarterly data for momentum:

Gross Profit vs. Net Profit: The Core Disconnect

The gross profit margin is where Power REIT (PW) shines, with the Q3 2025 margin at around 80.4%. This high number tells you the company's core business-leasing specialized real estate-is inherently lucrative. In real estate investment trusts (REITs), gross profit is essentially rental revenue minus property operating expenses, and an 80%+ margin suggests excellent cost management at the property level. Still, the TTM Gross Margin of 31.4% shows that over the past year, significant property-level costs or revenue issues have eroded that efficiency.

• High Q3 Gross Margin shows strong core leasing economics.
• TTM Gross Margin is a more realistic, but lower, 31.4%.
• Net Margin is the real problem, still negative at -225.7% TTM.

The massive gap between the gross and net margins is where the risk lies. The TTM net profit margin of -225.7% is a clear signal of substantial non-operating expenses, like high interest costs or, more critically, impairment charges (writing down the value of assets). The good news is that Q3 2025 net income was a positive $0.06M, a stark recovery from the -$19.3 million net loss in Q2 2024. That recovery was driven by a drastic drop in total expenses, falling to $1,254,099 in Q2 2025 from over $19 million a year prior, mostly due to lower impairment expenses.

Operational Efficiency and Industry Comparison

When you look at operational efficiency, the Q3 2025 operating margin of approximately 15.7% is a massive improvement, but it's still subject to the same volatility that has plagued the company. The broader REIT industry generally reports stable same-store Net Operating Income (NOI) growth-a measure similar to operating profit-which was up 2.7% year-over-year in Q2 2025. Power REIT (PW)'s performance is far from that stability. The trend in profitability has been a roller coaster: Gross Margin peaked at 99.7% in 2021 before hitting a low of -9.7% in 2023. The recent positive net income quarters suggest the company is working through its legacy issues, but the TTM loss means the past is still driving the overall financial health. The industry average Return on Equity (ROE) is around 32.6%, while Power REIT (PW)'s ROE is significantly negative, underscoring the distance the company must travel to reach peer-level profitability. You can read more about the full financial picture in Breaking Down Power REIT (PW) Financial Health: Key Insights for Investors.

What this estimate hides is the sustainability of the recent positive quarters; one-time gains or the absence of a large impairment charge can skew a single quarter's results.

Debt vs. Equity Structure

You're looking at Power REIT (PW)'s balance sheet, and the first thing that jumps out is the aggressive use of debt. The company is currently financing its operations much more heavily with borrowed money than with shareholder capital, a high-wire act that demands close scrutiny right now.

The core of this picture is the Debt-to-Equity (D/E) ratio, which sits at a high 3.22 as of the third quarter of 2025. Honestly, that's a significant red flag in the Real Estate Investment Trust (REIT) sector. To put that in perspective, the broader REIT industry generally maintains a much more conservative leverage profile, with a debt-to-market assets ratio averaging around 32.9% as of November 2025. Power REIT's number signals a heavy reliance on debt to fund its asset base, which amplifies both potential returns and, more importantly, risk.

Current Debt Load and Composition

The total debt load for Power REIT (PW) is approximately $20.05 million as of September 30, 2025. The vast majority of this is long-term, which is typical for a REIT, but the short-term component is where near-term liquidity pressure can build. Here's the quick math on the breakdown:

• Long-Term Debt: Approximately $19.3 million.
• Current Portion of Long-Term Debt (Short-Term): Approximately $0.75 million.

This structure shows that while the bulk of the debt isn't due immediately, the overall leverage is high relative to the company's equity, which was approximately $6.22 million in Q3 2025. This is why you must understand the Mission Statement, Vision, & Core Values of Power REIT (PW).

Refinancing Risks and Capital Strategy

The company's financing strategy has been a mix of managing existing debt issues and seeking new capital. A critical point of stress is the defaulted Greenhouse Loan, which the company has been in discussions with its lender about. To improve liquidity and manage this, Power REIT (PW) has been actively selling non-core and underperforming assets, such as the sale of a vacant greenhouse property for $200,000 in January 2025, with the net proceeds used to pay down that loan.

In terms of future funding, Power REIT (PW) filed for a mixed shelf offering of up to $50 million in January 2025. This allows them to issue a combination of debt and equity over time to finance growth or manage existing obligations. This flexibility is good, but any significant equity issuance would dilute common shareholders, so that's a trade-off to watch defintely.

Here's a snapshot of the key financial position metrics for your decision-making:

The high Current Ratio of 7.45 is a positive counterpoint, suggesting strong short-term liquidity, but it doesn't erase the long-term risk posed by the high D/E ratio and the ongoing negotiations around the defaulted loan. The company is trying to rebalance, but the overall capital structure remains aggressive.

Liquidity and Solvency

You need to know if Power REIT (PW) can cover its near-term bills, and the 2025 numbers show a significant, if volatile, improvement in its immediate liquidity position. The high current and quick ratios suggest the company has plenty of liquid assets relative to its current obligations, but this surge follows a period of major asset restructuring, so we need to look closer at the source of that cash.

Honestly, the headline liquidity ratios are exceptionally strong. The most recent data shows Power REIT's Current Ratio at a robust 7.45, which means the company has $7.45 in current assets for every $1.00 in current liabilities. This is a massive leap from the 2024 fiscal year's ratio of 1.95, indicating a dramatic de-risking of their short-term balance sheet.

The Quick Ratio (Acid-Test Ratio), which excludes less liquid current assets like inventory, is also very high, sitting at 4.72. This is a clear indicator of a strong ability to meet immediate obligations using only cash, marketable securities, and receivables. The company is defintely not facing an immediate liquidity crunch.

Here's the quick math on their liquidity positions:

• Current Ratio: 7.45 (Strong ability to cover all current liabilities)
• Quick Ratio: 4.72 (Exceptional ability to cover immediate liabilities)

The trend in working capital (Current Assets minus Current Liabilities) is best understood through these ratio movements. The jump from a Current Ratio of 1.95 to 7.45 in the most recent period suggests a substantial increase in current assets or a significant reduction in current liabilities, likely due to asset sales or debt restructuring following the Greenhouse Loan settlement mentioned in their Q3 2025 reports. What this estimate hides is the sustainability of this liquidity without consistent operating cash flow growth.

Looking at the cash flow statements, we see a critical turnaround in the near-term. For the third quarter of 2025, Power REIT reported a positive Net Cash from Operating Activities of $476,400, a significant improvement from previous quarters. This is the core engine of liquidity, and seeing it turn positive is a huge step. Still, the full fiscal year 2024 showed a negative Cash Flow from Operating Activities of -$1.39 million, so the trend needs to hold.

A look at the full 2024 cash flow picture highlights the strategic shift:

The potential liquidity strength is clear: the company has a large cushion of liquid assets. However, the risk remains in the long-term sustainability of the positive operating cash flow, which is the only true source of organic liquidity. The recent positive operating cash flow is a strong signal, but investors must monitor its consistency, especially as the company executes its Mission Statement, Vision, & Core Values of Power REIT (PW).

Valuation Analysis

You're looking for a clear-eyed assessment of Power REIT (PW), and the data from the 2025 fiscal year paints a challenging picture. The direct takeaway is that while the stock trades at a significant discount on a price-to-book basis, the fundamental valuation metrics, like Price-to-Earnings, are effectively meaningless due to negative earnings, suggesting the stock is a high-risk deep-value play, not a traditional value investment.

As a seasoned analyst, I focus on what the valuation ratios (multiples) tell us about market sentiment versus underlying assets.

• Price-to-Book (P/B): The P/B ratio is currently around 0.35 as of November 2025. This means the market values the company at only 35 cents for every dollar of its net asset value (book value). That's a massive discount.
• Price-to-Earnings (P/E): The P/E ratio is not available (n/a) because Power REIT has negative earnings (a loss), which is a major red flag. You can't put a multiple on a loss.
• Enterprise Value-to-EBITDA (EV/EBITDA): This metric, which strips out financing and accounting noise, is also negative at approximately -36.69 as of November 19, 2025, due to negative trailing twelve-month (TTM) EBITDA. A negative EV/EBITDA is defintely a sign of operational distress.

Here's the quick math: The low P/B ratio suggests the market has lost faith in management's ability to generate a return on those assets, or that the book value is overstated relative to liquidation value. The negative P/E and EV/EBITDA confirm the company is struggling with core profitability.

Stock Price and Dividend Health

The stock price trends over the last 12 months show brutal performance. The stock has plummeted by 43.55% over the last year, and the year-to-date return is even worse, sitting at -53.31% as of mid-November 2025. The 52-week trading range is between a low of $0.594 and a high of $2.59. That's a volatile ride, and the current price of around $0.65 is near the bottom of that range.

For a Real Estate Investment Trust (REIT), dividends are crucial, but Power REIT is not currently paying one. The TTM dividend payout is $0.00, and the dividend yield is 0.00% as of October 2025. The company suspended its dividend, which is a clear signal that cash flow is being prioritized for operations or debt, not shareholder distributions. What this estimate hides is the high debt-to-equity ratio of 3.22, which further complicates any near-term dividend reinstatement.

Analyst Consensus and Near-Term Action

The overall consensus from technical and quantitative models is unequivocally bearish. As of mid-November 2025, the general stock forecast sentiment is bearish, with 18 technical indicators signaling bearish signals versus only 8 signaling bullish signals. Some analysis even points to a 'Strong Sell' rating. Still, a few models project an average price target of $15.86 for 2025, which is a massive outlier and likely based on a highly optimistic scenario that ignores the current financial reality.

The reality is the stock holds a negative evaluation, and the technical trend is a downtrend. The market is telling you to be cautious.

If you want to dive deeper into the operational risks and opportunities, you can read the full analysis at Breaking Down Power REIT (PW) Financial Health: Key Insights for Investors. Your concrete next step is to look at the balance sheet-specifically the liquidity and debt covenants-before considering any position.

Risk Factors

You need to see the risks clearly, especially when a company is in a turnaround phase. Power REIT (PW) has shown some recovery in 2025, but its financial structure still carries significant risk, primarily stemming from its exposure to the volatile Controlled Environment Agriculture (CEA) sector, particularly cannabis-related tenants. The core issue is cash flow and liquidity.

The biggest red flag is the substantial accumulated deficit, which stood at a staggering $50,780,862 as of June 30, 2025. This huge deficit, coupled with the fact that current liabilities have exceeded current assets, has previously raised substantial doubt about the company's ability to continue as a going concern, according to filings earlier in the year.

Here's the quick math: while the company achieved a Q2 2025 net income of $157,706, a massive improvement from the $19,308,376 net loss in Q2 2024, the total revenue for Q2 2025 was only $506,783, a decrease from the prior year. This revenue decline is a direct result of the operational risk tied to non-performing tenants.

Operational and Financial Risks

The company's operational stability is directly threatened by its tenant base. Ongoing challenges in rental collection from cannabis-related tenants have been the primary driver of revenue decline. For instance, Q3 2025 revenue was only $1.51 million, a notable drop from $2.48 million in the prior-year period. Many greenhouse tenants have defaulted on lease payments.

This operational risk translates directly into financial strain. The company has not declared common or preferred dividends since Q4 2022, a necessary step for liquidity conservation. Furthermore, the Debt-to-Equity ratio is high at 3.22, and the Return on Equity (ROE) is deeply negative at -50.43%, as of the latest data, showing that debt is a major part of the capital structure and profitability is severely lacking.

• Tenant default risk erodes rental income.
• High debt load restricts financial flexibility.
• Dividend suspension signals liquidity stress.

External Risks and Mitigation

External risks center on the regulatory and market environment for the CEA sector. While federal legalization of cannabis remains uncertain, state-level regulatory changes and market oversupply continue to pressure tenants, increasing the risk of default. Power REIT (PW) is also in discussions with its lender regarding a defaulted Greenhouse Loan, which is a major financial risk, though the loan is non-recourse to the Trust itself.

Management has clear mitigation strategies, focusing on asset disposition and portfolio restructuring. They are actively seeking to sell non-core and underperforming assets to boost liquidity. They are also working to improve property operating results, re-lease vacant properties, and explore strategic alternatives, including potential mergers or acquisitions.

To get a full picture of the company's long-term direction, you should review their stated goals in the Mission Statement, Vision, & Core Values of Power REIT (PW).

The shift in impairment charges is a positive sign, suggesting improved asset valuations or a clearing of the books: Q2 2025 saw only $13,600 in impairment expense, a massive drop from $17,449,424 in Q2 2024. Still, the path is risky; they are defintely in a high-stakes restructuring.

Growth Opportunities

You're looking for a clear map of where Power REIT (PW) is headed, and the story is one of a focused, yet small, niche player doubling down on specialized real estate. The direct takeaway is that growth is tied to the expansion of their Controlled Environment Agriculture (CEA) portfolio, primarily cannabis cultivation, and their Renewable Energy assets.

The company has made a strategic shift, and its primary growth driver is the triple-net leasing of properties to operators in the CEA industry. This specialization allows them to command potentially higher yields, but it also concentrates risk. They are defintely actively seeking to expand this real estate portfolio.

Future Revenue and Earnings Estimates

For a company of this size, there is no reliable consensus analyst forecast for full-year 2025 revenue or earnings per share (EPS). This lack of coverage is a risk factor you need to factor into your valuation models. Here's the quick math on the most recent financial performance:

For the first nine months of the 2025 fiscal year (Q1 through Q3), Power REIT reported total revenue of approximately $1.51 million (Q1: $485.79K; Q2: $506.78K; Q3: $513.11K). This is a significant change from the $27.51 million in total revenues reported for the full 2024 fiscal year, reflecting a major shift in the underlying business or reporting structure. What this estimate hides is the volatility inherent in their focused market segments.

Earnings per share (EPS) for the third quarter of 2025 was a positive $0.02, improving from a loss of -$0.47 in the first quarter of 2025. The trend is toward profitability on a quarterly basis, but the scale remains small. The company's Adjusted Funds From Operations (AFFO) was approximately $14.8 million in 2024, which is a better measure of a REIT's cash flow.

Strategic Initiatives and Competitive Edge

Power REIT's strategy centers on being a specialized real-estate investment trust (REIT) focused on sustainable real estate, which gives them a distinct, if narrow, market position. They call this a Triple Bottom Line Investment-a commitment to Profit, Planet, and People.

Their competitive advantages are not about size, but specialization:

• Diversified Niche Focus: They are one of the few REITs diversified across three distinct, high-growth infrastructure asset classes: Controlled Environment Agriculture, Solar Farm Land, and Transportation.
• Strategic Land Holdings: The company strategically acquires land parcels crucial for its CEA and renewable energy operations, which provides control over essential assets for future development and expansion.
• Targeted Acquisitions: A concrete example of their expansion is the early 2025 acquisition of a 3-acre property in York County, Maine, for $1 million, which supports their core real estate strategy.

This focus is their strength, but still, a downturn in the regulated cannabis market or a shift in solar policy could hit them hard. You can read more about the financial details in Breaking Down Power REIT (PW) Financial Health: Key Insights for Investors.

Next Step: Review the Q4 2025 earnings release when it drops to see if the quarterly revenue trend continues to inch up.