VICI Properties Inc (VICI, Financial) experienced a daily loss of -0.58%, and a 3-month loss of -5.37%. The company's Earnings Per Share (EPS) stands at 2.39. Despite these figures, the question that begs for an answer is: Is the stock modestly undervalued? This article provides a valuation analysis of VICI Properties (VICI), encouraging readers to delve into the subsequent analysis to gain a deeper understanding of the company's intrinsic value.
Company Introduction
VICI Properties Inc is a real estate investment trust based in the US. It acts as an owner, acquirer, and developer of real estate assets across gaming, hospitality, entertainment, and leisure destinations. The company's operating segments are real property business and golf course business. With a stock price of $29 and a GF Value of $39.96, VICI Properties Inc (VICI, Financial) appears to be modestly undervalued. This discrepancy paves the way for a more profound exploration of the company's value.
Understanding GF Value
The GF Value represents the current intrinsic value of a stock derived from our exclusive method. The GF Value Line on our summary page provides an overview of the fair value at which the stock should ideally be traded. It is calculated based on historical multiples, GuruFocus adjustment factor based on the company's past returns and growth, and future estimates of the business performance.
At its current price of $29 per share and the market cap of $30 billion, VICI Properties stock gives every indication of being modestly undervalued. Because VICI Properties is relatively undervalued, the long-term return of its stock is likely to be higher than its business growth.
Financial Strength of VICI Properties
Investing in companies with poor financial strength carries a higher risk of permanent loss. Looking at the cash-to-debt ratio and interest coverage is a great way to understand the financial strength of a company. VICI Properties has a cash-to-debt ratio of 0.03, which is worse than 69.75% of 724 companies in the REITs industry. The overall financial strength of VICI Properties is 5 out of 10, which indicates that the financial strength of VICI Properties is fair.
Profitability and Growth of VICI Properties
Investing in profitable companies, especially those with consistent profitability over the long term, is less risky. VICI Properties has been profitable 8 over the past 10 years. Its operating margin is 91.42%, which ranks better than 96.78% of 683 companies in the REITs industry. Overall, the profitability of VICI Properties is ranked 8 out of 10, which indicates strong profitability.
Growth is probably the most important factor in the valuation of a company. The faster a company is growing, the more likely it is to be creating value for shareholders, especially if the growth is profitable. The 3-year average annual revenue growth rate of VICI Properties is 13.2%, which ranks better than 88.13% of 632 companies in the REITs industry. The 3-year average EBITDA growth rate is 1.3%, which ranks worse than 50.75% of 534 companies in the REITs industry.
ROIC vs WACC
Return on invested capital (ROIC) measures how well a company generates cash flow relative to the capital it has invested in its business. The weighted average cost of capital (WACC) is the rate that a company is expected to pay on average to all its security holders to finance its assets. For the past 12 months, VICI Properties's return on invested capital is 8.03, and its cost of capital is 7.84.
Conclusion
In conclusion, the stock of VICI Properties gives every indication of being modestly undervalued. The company's financial condition is fair and its profitability is strong. Its growth ranks worse than 50.75% of 534 companies in the REITs industry. To learn more about VICI Properties stock, you can check out its 30-Year Financials here.
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This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
