VICI Properties Q1 2025 Earnings Preview: Navigating Growth Amid Interest Rate Pressures

As VICI Properties (NYSE: VICI) prepares to report its first-quarter 2025 results on April 30, investors are watching closely for signs of resilience in its experiential real estate portfolio. With a focus on gaming, hospitality, and entertainment assets, VICI’s performance hinges on balancing rising interest expenses against the growing demand for its high-margin properties. Analysts project steady growth, but execution will be key to sustaining the stock’s outperformance in a challenging macroeconomic environment.

Earnings Outlook: A Cautionary Optimism

Analysts anticipate Q1 2025 EPS of $0.58, a 3.6% year-over-year increase, with revenues expected to hit $985.56 million, also up 3.6% from 2024. While these figures reflect consistent growth, the consensus EPS estimate has edged down by 0.1% over the past month—a subtle sign of cautious investor sentiment. This slight revision underscores concerns about rising interest expenses, which could compress margins despite strong demand for VICI’s properties.

The revenue mix offers a granular view of the company’s strengths:
- Golf Revenues: Up 5% to $10.6 million, benefiting from robust demand for premium golf experiences.
- Income from Lease Financing Receivables and Loans: $425.25 million, a 3.9% increase, driven by stable cash flows from long-term triple-net leases.
- Income from Sales-Type Leases: $530.04 million, growing 3.4%, reflecting the durability of VICI’s diversified tenant base.

AFFO Stability and Historical Performance

Adjusted Funds from Operations (AFFO) per share are projected to rise 3.6% to $0.58, aligning with EPS growth. Notably, the AFFO consensus has remained unchanged over the past two months, contrasting with VICI’s historical tendency to beat estimates—three of its last four quarters saw an average 0.9% surprise. This stability suggests analysts are calibrating expectations based on VICI’s ability to navigate macroeconomic headwinds.

Stock Performance and Analyst Sentiment

VICI’s shares have outperformed the broader market in recent weeks, gaining 0.7% over the past month versus the S&P 500’s -4.3% decline. The stock currently holds a Zacks Rank #2 (Buy), with 18 of 22 analysts rating it “Strong Buy.” The consensus price target of $35.96 implies a 12.2% upside from recent trading levels, signaling strong conviction in VICI’s long-term growth story.

Key Catalysts and Risks

• Growth Catalysts:
• Strategic Investments: The $300 million stake in the One Beverly Hills luxury project positions VICI to capitalize on high-end demand.
• Sector Tailwinds: Experiential assets like gaming and hospitality are benefiting from post-pandemic recovery and rising consumer spending.

• Lease Stability: Triple-net leases with top-tier operators provide predictable cash flows, reducing operational volatility.

• Risks:

• Interest Rate Pressures: Rising borrowing costs could squeeze profitability unless offset by higher occupancy rates or rent increases.
• Peer Comparisons: Competitors like Welltower (WELL) and W.P. Carey (WPC), which report on April 28 and 29 respectively, may set a benchmark for REIT performance in Q1.

Conclusion: A Bullish Outlook with Nuance

VICI Properties enters its Q1 earnings with a cautiously optimistic backdrop. While the stock’s 12.2% upside potential and strong analyst ratings suggest confidence in its long-term trajectory, near-term risks—particularly interest expenses—require close monitoring. The company’s 3% CAGR for AFFO through 2026 ($2.33 to $2.40 per share) reinforces its position as a steady performer in the REIT sector.

Investors should watch for two critical factors in the earnings report:
1. Margin Resilience: Can VICI maintain its 3.6% AFFO growth despite rising costs?
2. Strategic Execution: Will new developments like One Beverly Hills contribute meaningfully to future growth?

With its diversified portfolio and robust tenant relationships, VICI remains well-positioned to capitalize on experiential real estate’s growth. Provided it navigates interest rate pressures effectively, the stock could continue its outperformance, making it a compelling pick for investors seeking both stability and upside in the REIT space.

Data as of April 2025. Past performance is not indicative of future results.