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Churchill Downs (CHDN)
NASDAQ:CHDN
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Churchill Downs
(NASDAQ:CHDN)
66Neutral
Positive Factors
Financial Performance
The company reported revenue and Adj. EBITDA above both internal estimates and the Street's expectations.
Growth Opportunities
The opportunities for growth remain and are unique to CHDN, and the overreaction in the shares presents opportunity.
Strategic Investments
Churchill Downs is seen as one of the best growth stories in gaming, increasing EBITDA at an 8% CAGR from 2023 to 2026, making it a top pick in the coverage universe.
Negative Factors
Competitive Pressure
Weakness at Rivers Casino, likely due to competition, pressured margins.
Market Sentiment
Several negative headlines, including a slower ramp at the Rose, as well as macro headlines, have created downward pressure on shares, underperforming gaming names.
Project Delays
The company announced it is pausing its plans for redevelopment of the Skye and infield projects, which were estimated at $900M through 2028.
Churchill Downs (CHDN) vs. S&P 500 (SPY)
Market Cap
$6.46B
Dividend Yield0.46%
Average Volume (3M)892.32K
Price to Earnings (P/E)15.9
Beta (1Y)0.71
Revenue Growth11.75%
EPS Growth24.31%
CountryUS
Employees6,480
SectorConsumer Cyclical
Sector Strength67
IndustryGambling, Resorts & Casinos
Share Statistics
EPS (TTM)5.62
Shares Outstanding72,232,100
10 Day Avg. Volume1,257,129
30 Day Avg. Volume892,319
Financial Highlights & Ratios
PEG Ratio0.65
Price to Book (P/B)N/A
Price to Sales (P/S)0.00
Price to Cash Flow (P/CF)0.00
P/FCF Ratio0.00
Enterprise Value/Market Cap2.00
Enterprise Value/RevenueN/A
Enterprise Value/Gross Profit13.74
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$142.50Price Target Upside55.87% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering10
Churchill Downs Business Overview & Revenue Model
Company DescriptionChurchill Downs Incorporated (CHDN) is a leading racing, online wagering, and gaming entertainment company in the United States. The company is best known for its iconic horse racing track, Churchill Downs, which hosts the renowned Kentucky Derby. In addition to horse racing, Churchill Downs Incorporated operates a suite of gaming operations, including casinos and historical racing machines, and offers online wagering platforms through its TwinSpires brand.
How the Company Makes MoneyChurchill 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 presents a solid financial position with consistent revenue and profit growth, strong cash flow management, and efficient equity utilization despite high leverage. The company is well-positioned within the gambling and resorts industry, but should monitor debt levels to mitigate potential risks.Income Statement
Churchill Downs shows strong financial performance with consistent revenue growth and healthy profit margins. The TTM (Trailing-Twelve-Months) Gross Profit Margin is approximately 50.1%, and the Net Profit Margin stands at 15.1%. EBIT and EBITDA margins are also robust at 25.8% and 33.9%, respectively. Revenue has grown steadily over the years, reflecting a positive growth trajectory.85
Very Positive
Balance Sheet
The balance sheet reflects moderate leverage with a Debt-to-Equity Ratio of 4.55 and a Return on Equity of 39.4%, indicating efficient use of equity but potential risk due to high debt levels. The Equity Ratio stands at 14.6%, showing a relatively low proportion of assets financed by shareholders' equity.70
Positive
Cash Flow
Churchill Downs demonstrates strong cash flow management with a Free Cash Flow Growth Rate of 64.6% over the TTM. The Operating Cash Flow to Net Income Ratio is 1.81, and the Free Cash Flow to Net Income Ratio is 0.88, highlighting effective cash generation relative to earnings.78
Positive
| 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
Negative
91.42
Price Trends
108.31
Negative
118.92
Negative
128.73
Negative
Market Momentum
-5.06
Positive
34.49
Neutral
17.85
Positive
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 91.42 is below the 20-day moving average (MA) of 100.72, below the 50-day MA of 108.31, and below the 200-day MA of 128.73, indicating a bearish trend. The MACD of -5.06 indicates Positive momentum. The RSI at 34.49 is Neutral, neither overbought nor oversold. The STOCH value of 17.85 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for CHDN.
Churchill Downs Risk Analysis
Churchill Downs disclosed 29 risk factors in its most recent earnings report. Churchill Downs reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Churchill Downs Peers Comparison
Overall Rating
UnderperformOutperform
Sector (60)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
74 Outperform | $5.72B | 11.32 | 34.76% | 1.00% | 6.06% | 10.05% | |
68 Neutral | $9.11B | 13.47 | 21.76% | ― | 6.66% | -24.59% | |
66 Neutral | $6.46B | 15.91 | 44.13% | 0.46% | 11.75% | 24.31% | |
66 Neutral | $8.73B | 18.88 | -51.73% | 1.22% | 9.13% | -30.00% | |
60 Neutral | $6.86B | 11.74 | 3.14% | 4.15% | 2.37% | -21.95% | |
50 Neutral | $5.86B | ― | -6.38% | ― | -2.45% | -135.17% | |
42 Neutral | $2.42B | ― | -10.27% | ― | 3.38% | 38.18% |
* Consumer Cyclical Sector Average
Performance Comparison
CHDN
Churchill Downs
91.42
-37.20
-28.92%
BYD
Boyd Gaming
69.23
16.30
30.80%
MGM
MGM Resorts
31.80
-7.64
-19.37%
PENN
Penn National Gaming
15.71
-0.83
-5.02%
WYNN
Wynn Resorts
81.55
-9.07
-10.01%
CZR
Caesars Entertainment
27.99
-7.83
-21.86%
Churchill Downs Earnings Call Summary
Earnings Call Date:Apr 23, 2025
(Q1-2025)
| % Change Since: -12.97%|
Next Earnings Date:Jul 23, 2025
Earnings Call Sentiment Neutral
The earnings call highlighted record financial performance and successful project completions, such as the Owensboro HRM venue and Kentucky Derby enhancements. However, challenges included a pause on a major project due to economic uncertainties and softness in certain segments. The company remains committed to strategic growth and capital management.Q1-2025 Updates
Positive Updates
Record First Quarter Financial Performance
Churchill Downs Incorporated delivered record first quarter net revenue of $643 million and record first quarter adjusted EBITDA of $245 million, marking strong performance despite various challenges.
Successful Opening of Owensboro HRM Venue
The Owensboro HRM venue was opened on time and below budget, featuring 600 HRMs, a retail sportsbook, and simulcast wagering. The property is on track to deliver a great return for shareholders.
Completion of Kentucky Derby Starting Gate Pavilion
The Starting Gate Pavilion and Courtyard project was completed on time and on budget, adding 8,500 new reserved premium stadium and trackside box seats, enhancing the guest experience.
HRM Expansion and Performance
Significant progress in HRM venues, with new developments in Virginia and Kentucky, including the Richmond expansion and the forthcoming Roshire Gaming Parlor. The Exacta technology acquisition has improved performance and expanded third-party operations.
Strong Free Cash Flow Generation
Generated $234 million or $3.15 per share of free cash flow in the first quarter, indicating robust cash flow from operations.
Negative Updates
Temporary Pause on $900 Million Project
The multiyear project at Churchill Downs Racetrack has been paused due to increased economic uncertainty and potential inflation, particularly affecting material costs.
Softness in Virginia HRM Properties
The Virginia HRM property's contribution to adjusted EBITDA decreased by $2.2 million or 3% compared to the prior year, affected by weather, a higher handle tax rate, and competition.
Impact of Economic Uncertainty on Consumer Behavior
Notable hesitancy observed in lower-tier or unrated play across casinos, attributed to the volatile macroeconomic environment and uncertainty over tariffs.
Reduced Project Capital Forecast
2025 project capital forecast reduced by $100 to $110 million due to the pause on large-scale projects, reflecting a cautious approach to capital allocation.
Company Guidance
During the Churchill Downs Incorporated 2025 First Quarter Earnings Conference Call, the company reported record first quarter net revenue of $643 million and record first quarter adjusted EBITDA of $245 million, despite challenges such as material weather events, an uncertain economic environment, and one less day in the quarter due to 2024 being a leap year. The Owensboro HRM venue opened successfully on time and below budget, contributing positively to the results. The company decided to temporarily pause a $900 million multiyear project at Churchill Downs Racetrack due to economic uncertainties and potential cost increases, but announced two smaller renovation projects at a cost of $25 to $30 million. The Virginia HRM properties showed mixed results with a decrease in adjusted EBITDA, but the Rose Gaming Resort demonstrated good progress. The company generated $234 million or $3.15 per share of free cash flow in the first quarter, with reduced 2025 capital expenditure projections due to the paused project. They repurchased nearly 800,000 shares and paid dividends, returning almost $120 million to shareholders. Overall, the company remains committed to strategic investments and expects the upcoming 151st Kentucky Derby to deliver results comparable to the previous year.Churchill Downs Corporate Events
Executive/Board ChangesShareholder Meetings
Churchill Downs Shareholders Approve Key 2025 Decisions
Neutral
Apr 22, 2025
On April 22, 2025, Churchill Downs Incorporated held its Annual Meeting of Shareholders, where several key decisions were made. Shareholders approved the 2025 Omnibus Stock and Incentive Plan, elected two Class II Directors, ratified PricewaterhouseCoopers LLP as the independent accounting firm for 2025, and approved executive compensation on an advisory basis. These decisions reflect the company’s strategic focus on aligning executive incentives with shareholder interests and ensuring robust financial oversight.
Spark’s Take on CHDN Stock
According to Spark, TipRanks’ AI Analyst, CHDN is a Neutral.
Churchill Downs exhibits strong revenue growth and cash flow performance, yet financial instability due to high leverage poses risks. While technical indicators suggest bearish momentum, the earnings call provides a positive outlook with strategic growth projects. Valuation is reasonable, but low dividend yield may deter income investors.
To see Spark’s full report on CHDN stock, click here.
Stock Buyback
Churchill Downs Announces $500 Million Share Buyback Plan
Neutral
Mar 12, 2025
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.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.