Churchill Downs (CHDN) AI Stock Analysis

• Market Cap: $7.47B
• Dividend Yield: 0.4%
• Average Volume (3M): 695.83K
• Price to Earnings (P/E): 17.9
• Beta (1Y): 0.87
• Revenue Growth: 11.07%
• EPS Growth: 3.32%
• Country: US
• Employees: 6,480
• Sector: Consumer Cyclical
• Sector Strength: 63
• Industry: Gambling, Resorts & Casinos
• EPS (TTM): 5.68
• Shares Outstanding: 73,487,850
• 10 Day Avg. Volume: 821,599
• 30 Day Avg. Volume: 695,826
• PEG Ratio: 5.39
• Price to Book (P/B): N/A
• Price to Sales (P/S): 3.02
• Price to Cash Flow (P/CF): 15.80
• P/FCF Ratio: 35.20
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $149.63
• Price Target Upside: 48.16% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 8

Churchill Downs shows strong financial performance and growth prospects, particularly in its flagship events and strategic expansions. However, significant financial risks due to high leverage and a bearish technical outlook weigh on the overall score. The company's positive earnings guidance partially offsets these concerns, suggesting potential for future growth if financial stability is improved.

Positive Factors

Earnings Growth

The Rose, a $460M historical horse racing machine facility, is a key focal point for earnings growth in the next 18 months.

Financial Performance

CHDN delivered better-than-expected top line of $624.2m and adjusted EBITDA of $236.6m, leading to a constructive forward commentary.

Share Repurchase Program

The company approved a new $500M share repurchase program, replacing the existing program, which is viewed as a positive signal for when management is able to buy shares.

Negative Factors

Competition

Weakness at Rivers Casino, likely due to competition, pressured margins.

Market Performance

CHDN has been a big underperformer, -11% YTD vs US Gaming peers +12% avg, attributed to a mixed Rose opening and policy fears.

Virginia Trends

Underlying trends in Virginia appear to be deteriorating, impacting the expected financial performance.

Churchill Downs Business Overview & Revenue Model

Company Description

Churchill Downs Incorporated operates as a racing, online wagering, and gaming entertainment company in the United States. It operates through three segments: Live and Historical Racing, TwinSpires, and Gaming. As of December 31, 2021, the company owned and operated three pari-mutuel gaming entertainment venues with approximately 3,050 historical racing machines (HRMs) in Kentucky; TwinSpires, an online wagering platform for horse racing, sports, and iGaming; nine retail sportsbooks; and casino gaming in eight states with approximately 11,000 slot machines and video lottery terminals, and 200 table games. It also offers streaming video of live horse races, replays, and an assortment of racing and handicapping information; and provides the Bloodstock Research Information Services platform for horse racing statistical data. In addition, the company manufactures and operates pari-mutuel wagering systems for racetracks, off-track betting facilities, and other pari-mutuel wagering businesses. Churchill Downs Incorporated was founded in 1875 and is headquartered in Louisville, Kentucky.

How the Company Makes Money

Churchill Downs Incorporated generates revenue through several key streams. The primary source of income is from its live horse racing events, most notably the Kentucky Derby, which draws significant attendance and wagering activity. Additionally, the company benefits from media rights and sponsorship deals associated with these events. Another substantial revenue stream comes from its gaming operations, which include casinos and historical racing machines located across various properties in the U.S. These facilities offer slot machines, table games, and other gaming options. Furthermore, Churchill Downs Incorporated capitalizes on the growing trend of online wagering through its TwinSpires platform, which allows users to bet on horse races and other sports events. The company also engages in strategic partnerships and acquisitions to expand its portfolio and enhance its service offerings, contributing to its overall profitability.

Churchill Downs Financial Statement Overview

Summary

Churchill Downs demonstrates robust revenue growth and operational profitability, with strong cash flow generation. However, the balance sheet reveals significant financial risk due to high debt levels and negative equity. While the company is managing cash effectively, the financial instability due to leverage poses considerable risks.

Income Statement

Churchill Downs has exhibited strong revenue growth over the past few years, with a 11.07% increase from 2023 to 2024. The company maintains a robust gross profit margin, achieving 100% in 2024, which highlights efficient cost management. However, the net profit margin decreased slightly from 2023 to 2024 (from 16.95% to 15.61%), indicating increased expenses or other financial pressures. EBIT and EBITDA margins are high at 25.93%, suggesting solid operational profitability.

Balance Sheet

The debt-to-equity ratio is concerning, as Churchill Downs has negative equity in 2024, indicating financial instability. The company's liabilities exceed its assets, leading to a negative stockholders' equity. This situation poses a significant risk and suggests potential liquidity issues. The equity ratio is negative, indicating heavy reliance on debt financing, which could be detrimental in adverse economic conditions.

Cash Flow

Churchill Downs has achieved a substantial increase in free cash flow from negative in 2023 to positive in 2024, indicating improved cash generation capability. The operating cash flow to net income ratio is strong at 1.81, reflecting efficient cash management. However, the free cash flow to net income ratio is 1.81, signaling good cash conversion but also highlighting the need for cautious cash flow management given the high leverage.

Breakdown
Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
2.73B	2.46B	1.81B	1.60B	1.05B
	Gross Profit
938.50M	795.70M	566.40M	446.10M	193.50M
	EBIT
709.00M	564.00M	561.90M	451.50M	106.50M
	EBITDA
1.07B	1.01B	875.10M	536.80M	185.90M
	Net Income Common Stockholders
426.80M	417.30M	439.40M	249.10M	13.30M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
175.50M	144.50M	129.80M	291.30M	67.40M
	Total Assets
7.28B	6.96B	6.21B	2.98B	2.69B
	Total Debt
839.80M	4.84B	4.61B	1.97B	1.62B
	Net Debt
839.80M	4.69B	4.48B	1.68B	1.55B
	Total Liabilities
6.17B	6.06B	5.66B	2.67B	2.32B
	Stockholders Equity
1.08B	893.60M	551.50M	306.80M	367.10M
Cash Flow		Free Cash Flow
225.70M	-70.70M	80.00M	243.70M	-92.30M
	Operating Cash Flow
772.70M	605.80M	536.80M	335.50M	141.90M
	Investing Cash Flow
-545.20M	-718.00M	-3.10B	-100.40M	-239.40M
	Financing Cash Flow
-196.60M	129.30M	2.42B	-500.00K	76.00M

Churchill Downs Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 100.99
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CHDN, the sentiment is Negative. The current price of 100.99 is below the 20-day moving average (MA) of 107.35, below the 50-day MA of 112.51, and below the 200-day MA of 130.45, indicating a bearish trend. The MACD of -3.40 indicates Positive momentum. The RSI at 36.82 is Neutral, neither overbought nor oversold. The STOCH value of 39.19 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for CHDN.

Churchill Downs Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
BYD	78 Outperform	$5.38B	10.54	34.76%	1.06%	5.13%	2.04%
MGM	66 Neutral	$8.38B	12.43	21.76%	―	6.66%	-24.59%
WYNN	63 Neutral	$7.95B	17.20	-51.73%	1.33%	9.13%	-30.00%
Sector *	60 Neutral	$7.23B	11.55	3.67%	4.04%	2.96%	-13.54%
CHDN	60 Neutral	$7.47B	17.89	42.87%	0.40%	11.07%	3.32%
CZR	46 Neutral	$5.36B	―	-6.38%	―	-2.45%	-135.17%
PENN	44 Neutral	$2.18B	―	-10.27%	―	3.38%	38.18%

Churchill Downs Corporate Events

Churchill Downs Announces $500 Million Share Buyback Plan

On March 12, 2025, Churchill Downs Incorporated announced the approval of a new $500 million share repurchase program by its Board of Directors. This program replaces a previous authorization from September 2021, which had $125.6 million remaining. The repurchase plan allows for flexibility in execution, with no set time limit, and can be conducted in the open market or through private transactions, potentially impacting the company’s financial strategy and shareholder value.