Using the Earnings Power Value framework with a WACC of 8.0% and normalized earnings of $3.7B, VICI Properties Inc. has a fair value of $44.45 per share. The EPV range is $37.50 – $54.61 based on WACC sensitivity (6.5% – 9.5%).
| Low | Selected | High | |
|---|---|---|---|
| Normalized Earnings | 3,725 | 3,725 | 3,725 |
| (/) WACC | 9.5% | 8.0% | 6.5% |
| Enterprise Value | 39,287 | 46,670 | 57,470 |
| (-) Net debt | -563 | -563 | -563 |
| Equity Value | 39,851 | 47,234 | 58,033 |
| (/) Outstanding shares | 1,063 | 1,063 | 1,063 |
| Fair Price | $37.50 | $44.45 | $54.61 |
Earnings Power Value (EPV) estimates what a company is worth based on its current normalized earnings, assuming zero growth. It values the business as a perpetuity: Normalized Earnings / WACC. This gives a conservative floor value — the company's worth if it never grows but maintains its current profitability.
The model normalizes earnings by: (1) using sustainable gross margins (5-year average) applied to current revenue, (2) deducting maintenance-level operating expenses (average R&D + SG&A as % of revenue), (3) applying the average effective tax rate, and (4) subtracting the average excess of CapEx over D&A (net reinvestment needed to maintain current capacity).
EPV is most useful as a comparison anchor: if the market price is below EPV, the stock may be undervalued even without any growth. If market price exceeds EPV, the premium reflects growth expectations — which may or may not materialize.