DCF Studio

    VICI · NYQ · Real Estate

    VICI Properties Inc.

    Also onShortfallConsensus DriftCrosscheck

    Implied value per share

    USD 69.85

    Market price

    USD 23.72

    Implied upside

    +194.5%

    5-year forecast · Perpetuity growth terminal value · Mid-year discounting · Base case

    AdjustedReported capital expenditure averages just 0.10% of revenue, which is too low to be the company's real investment - property trusts and similar structures invest through lines that are not reported as capex. Capex has been set to 1.00% of revenue so the forecast is not handed free growth. Override it if the reported figure is right.
    AdjustedCapital expenditure runs at 1.0% of revenue against depreciation of 0.1%. A perpetuity has to be a steady state, so the terminal year uses maintenance capex at depreciation and then charges the reinvestment terminal growth requires (g/ROIC of NOPAT). The bridge is shown under Terminal Value.

    Value Per Share

    Perpetuity growth
    USD 69.85+194.5%
    Exit multiple
    USD 60.02+153.1%
    Market price
    USD 23.72

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (USD). Outflows negative.

    0bn3bn7bnFY26FY27FY28FY29FY30
    Nominal FCFFDiscounted to todayUSD
    LineFY26FY27FY28FY29FY30CAGR
    RevenueUSD 4.6bnUSD 5.3bnUSD 6.2bnUSD 7.1bnUSD 8.2bn+15.5%
    EBITUSD 3.9bnUSD 4.5bnUSD 5.2bnUSD 6.0bnUSD 7.0bn+15.5%
    NOPATUSD 3.9bnUSD 4.5bnUSD 5.2bnUSD 6.0bnUSD 7.0bn+15.5%
    Add depreciation & amortisationUSD 5.1mUSD 5.9mUSD 6.8mUSD 7.8mUSD 9.0m+15.5%
    Less capital expenditureUSD -46.3mUSD -53.4mUSD -61.7mUSD -71.3mUSD -82.3m+15.5%
    Less increase in working capitalUSD -8.6mUSD -9.9mUSD -11.5mUSD -13.2mUSD -15.3m+15.5%
    Free cashflow to firmUSD 3.9bnUSD 4.5bnUSD 5.1bnUSD 5.9bnUSD 6.9bn+15.5%
    Discount factor0.96420.89630.83320.77450.7200-
    Present valueUSD 3.7bnUSD 4.0bnUSD 4.3bnUSD 4.6bnUSD 4.9bn+7.4%
    Present Value Of The ForecastUSD 21.5bn

    Discount Rate

    Source shown per component. All overridable above.

    Risk-free rate5.00%US 10-year Treasury (^TNX)
    Equity risk premium5.50%Market assumption
    Beta0.787Reported 0.682, pulled toward 1.0 (Blume)
    Cost of equity9.33%Risk-free + beta x equity risk premium
    Cost of debt5.00%Floored at the risk-free rate (implied cost of debt was lower)
    Market capitalisationUSD 26.1bn59.6% of capital
    Total debtUSD 17.7bn40.4% of capital, book value as a proxy
    Tax rate0.3%Effective, capped at statutory
    WACC7.57%E/V x Re + D/V x Rd x (1 - t)

    Terminal Value

    Perpetuity growth is intrinsic. The exit multiple defaults to the company's current EV/EBITDA, so it answers a different question - what the shares are worth if today's rating holds and EBITDA grows as forecast.

    Perpetuity growth at 2.50%

    Value per shareUSD 69.85

    76% of EV

    Forecast FCFF, final year
    USD 6.9bn
    Capex at depreciation, working capital in reinvestment
    USD 7.0bn
    Less reinvestment at g/ROIC (31.0% of NOPAT)
    USD -2.2bn
    Capitalised
    USD 4.8bn
    ROIC (reported)
    8.1%
    Terminal value, undiscounted
    USD 96.9bn
    Terminal value, discounted
    USD 69.8bn
    Enterprise value
    USD 91.3bn
    Less net debt
    USD 17.1bn
    Equity value
    USD 74.2bn

    Exit at 11.8x EBITDA

    Value per shareUSD 60.02

    73% of EV

    Terminal value, undiscounted
    USD 82.4bn
    Terminal value, discounted
    USD 59.3bn
    Enterprise value
    USD 80.9bn
    Less net debt
    USD 17.1bn
    Equity value
    USD 63.8bn

    Spread between methods: 15%.

    Sensitivity

    Value per share (USD) by discount rate and long-run growth.

    Long-run growth
    Discount rate1.50%2.00%2.50%3.00%3.50%
    5.57%109.18115.24123.15134.02149.99
    6.57%84.7087.0889.9893.6098.30
    7.57%68.2769.0169.8570.8071.91
    8.57%57.2057.4757.7357.9958.26
    9.57%49.2149.4449.6649.8950.12

    Outlined: this model. Green text: above today's price of 23.72. Shading: distance from this model's own value.

    Priced In

    What each input would have to be to justify the current price, one at a time.

    InputModelImpliedGap
    Revenue growth, every year15.5%-2.9%-18.4pp
    EBIT margin84.7%39.4%-45.3pp
    Discount rate7.6%15.4%+7.8pp
    Download as Excel

    Live formulas, not pasted numbers - edit a driver and the workbook reprices.

    Yahoo Finance and RBA data. General information, not advice. Methodology.