VICI Properties Inc. (VICI) is a New York-based real estate investment trust (REIT) with a market capitalization of $35.4 billion. The company specializes in owning and operating premier gaming, hospitality, and entertainment properties. Its impressive portfolio features iconic destinations like Caesars Palace and the Venetian Resort, all managed under long-term triple-net lease agreements.
Companies valued at $10 billion or more are generally considered "large-cap" stocks, and VICI properties perfectly fit that description, with its market cap exceeding this mark, underscoring its size, influence, and dominance within the real estate sector. Diversified revenue sources, including sales-type leases, lease financing receivables, and golf operations, drive VICI's market leadership. Its focus on strategic investments, such as the $700 million upgrade to the Venetian Resort, aims to boost property value, generate additional rental income, and enhance the guest experience, positioning the company for sustained growth.
VICI shares are currently trading 12.4% below its 52-week high of $34.29 achieved on Sept. 16. VICI has dropped 10.9% over the last three months, underperforming the S&P 500 Index’s ($SPX) 7.4% returns over the same time frame.
In the long term, VICI is down 5.7% on a YTD basis, and the shares have plummeted 4.1% over the past 52 weeks. In comparison, the SPX has surged 26.9% in 2024 and 28.2% over the past year.
VICI has been trading above its 200-day moving average since mid-July amid fluctuations but under its 50-day moving average since early December.
VICI Properties' underperformance is attributed to investor apprehensions regarding its expansion into non-gaming sectors and potential refinancing challenges stemming from rising interest rates.
On Oct. 31, VICI Properties reported Q3 earnings and its shares dipped over 1% in the following trading session. It posted revenue of $964.7 million and FFO of $0.57 per share, both surpassing analysts' expectations.
VICI Properties faces competition from top diversified REITs, including American Assets Trust, Inc. (AAT). VICI has lagged behind AAT, which has gained 22.2% in 2024 and 19.6% over the past year.
Despite the underwhelming price action, analysts hold a positive outlook for VICI. The stock has a consensus rating of "Strong Buy" from 21 analysts in coverage. The mean price target of $35.75 reflects a 19% premium over current price levels.
