VICI Properties: A Buy-the-Dip Opportunity Amid Gaming Sector Volatility

In a market where volatility often obscures value, VICI Properties (VICI) stands out as a compelling opportunity for investors seeking resilient cash flows and undervalued real estate exposure. As the gaming sector navigates macroeconomic headwinds, VICI's strategic positioning-marked by inflation-linked leases, investment-grade tenants, and a compelling valuation-positions it as a defensive play with upside potential.

Attractive Valuation Metrics: A Discount to Intrinsic Value

VICI's financials in 2025 underscore its appeal. The company reported adjusted funds from operations (AFFO) per share of $0.60 in Q3 2025, reflecting a 5.3% year-over-year increase. Analysts project further growth, forecasting earnings per share (EPS) of $2.72 for fiscal year 2025 and $2.84 for 2026. Despite these fundamentals, the stock trades at a significant discount to its intrinsic value. A discounted cash flow (DCF) model estimates an intrinsic value of $55.15 per share-well above its current price-as of late 2025.

The company's price-to-earnings (P/E) ratio of 10.88, calculated using the trailing 12 months' diluted EPS, further highlights its affordability relative to peers. Meanwhile, while the price-to-NOI (P/NOI) ratio for Q4 2025 remains undisclosed, VICI's long-term lease structures and consistent cash flow generation-bolstered by developments like the North Fork Mono Casino & Resort and One Beverly Hills-suggest an attractive P/NOI profile.

Resilient Cash Flow Dynamics: Long-Duration Leases and Strategic Growth

VICI's cash flow resilience is anchored by its triple-net lease structure, which transfers property-level expenses to tenants. For fiscal year 2024, the company generated $2.37 billion in free cash flow, an 8.4% increase from 2023. While Q4 2025 figures remain unreported, the full-year 2025 operating cash flow of $586.29 million reinforces its ability to sustain distributions.

The gaming sector's long-duration leases amplify this stability. For instance, the Northfield Park Lease-a 25-year agreement-includes annual rent escalations of 2.0% or CPI-linked adjustments capped at 3.0%, beginning in 2032. Such terms ensure VICI's income remains insulated from short-term economic fluctuations.

Strong Tenant Credit Quality: A Pillar of Stability

VICI's tenant base is a critical differentiator. With 74% of its rent roll derived from S&P 500 tenants, the company benefits from the financial strength of operators like Caesars and MGM Resorts. Fitch Ratings affirmed VICI's credit rating at "BBB-" with a stable outlook in December 2025, citing its operational efficiency and low default risk.

Key tenants, however, present mixed credit profiles. Caesars Entertainment, which accounts for a significant portion of VICI's revenue, carries a B2 rating (with a 0.198% default probability), while MGM Resorts maintains an "IDR" of "BB-" from Fitch, with senior secured debt rated "BB+". Despite these non-investment-grade ratings, both operators have demonstrated resilience: MGM China reported a 15.5% market share and record Segment Adjusted EBITDAR of $284 million in Q3 2025, while Caesars' leverage is expected to remain above 6x through 2025.

VICI's 100% occupancy rate and recent addition of Clairvest as its 14th tenant further diversify its risk profile, reducing reliance on any single operator.

Inflation-Linked Leases: A Hedge Against Macroeconomic Uncertainty

As inflation remains a global concern, VICI's lease structure offers a unique advantage. In 2025, 42% of its leases include CPI escalations, a figure projected to rise to 90% by 2035. This mechanism ensures rental income grows in line with inflation, preserving real returns for shareholders. For example, the Northfield Park Lease's CPI-linked terms exemplify VICI's proactive approach to inflation risk.

Conclusion: A Buy-the-Dip Opportunity with Long-Term Conviction

VICI Properties combines an undervalued equity story with structural advantages in cash flow resilience and tenant quality. Its current valuation-discounted relative to intrinsic value-presents an entry point for investors who recognize the gaming sector's long-term durability. With inflation-linked leases, a diversified tenant base, and a track record of operational excellence, VICI is well-positioned to outperform in a volatile market. For those seeking a REIT with both defensive and growth characteristics, VICI's "buy-the-dip" narrative is hard to ignore.