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Churchill Downs (CHDN)
NASDAQ:CHDN
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Churchill Downs (CHDN) AI Stock Analysis

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CHDN

Churchill Downs

(NASDAQ:CHDN)

Rating:81Outperform
Price Target:
$119.00
▲(16.74% Upside)
Churchill Downs demonstrates strong financial performance with impressive revenue growth and profitability, supported by robust earnings call insights and strategic acquisitions. While technical indicators suggest potential short-term weakness, the company's strategic initiatives and solid financials position it well for future growth.
Positive Factors
Segment Performance
The Gaming and TwinSpires segments outperformed our estimates, partly offset by slightly lower than expected results in Live and Historical Racing.
Wagering Records
Churchill Downs announced that wagering from all sources was the highest all-time for the Kentucky Derby race, the Kentucky Derby Day program, and Kentucky Derby Week races.
Negative Factors
Attendance Decline
Attendance for the Derby was ~147K, -6% Y/Y, and down -2% vs. 2023.
Capital Project Deferrals
The company announced it is pausing its plans for redevelopment of the Skye and infield projects, which were estimated at $900M through 2028.
EBITDA Expectations
Despite the increase in wagering, CHDN expects Kentucky Derby week EBITDA to be down -$2-4M Y/Y.

Churchill Downs (CHDN) vs. SPDR S&P 500 ETF (SPY)

Churchill Downs Business Overview & Revenue Model

Company DescriptionChurchill 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 MoneyChurchill Downs generates revenue through multiple key streams. The primary source is pari-mutuel wagering from live horse races at its racetracks and through simulcast events. The company also earns significant income from its gaming operations, including revenues from casinos and historical racing machines. Additionally, online wagering through its platforms, such as TwinSpires, contributes to revenue via fees and commissions on bets placed. Strategic partnerships with other gaming entities and technological investments enhance its online presence and customer engagement, further boosting earnings. Seasonal events like the Kentucky Derby also provide substantial revenue through ticket sales, hospitality packages, and merchandise.

Churchill Downs Earnings Call Summary

Earnings Call Date:Jul 23, 2025
(Q2-2025)
|
% Change Since: |
Next Earnings Date:Oct 22, 2025
Earnings Call Sentiment Positive
The earnings call highlighted strong financial results and growth in critical areas like the Kentucky Derby and HRM facilities. However, there were some challenges in regional gaming and specific operational areas. Overall, the positive developments outweigh the negatives.
Q2-2025 Updates
Positive Updates
Record-Breaking Financial Performance
Churchill Downs delivered all-time record net revenue of $934 million and adjusted EBITDA of $451 million, marking the fifth consecutive record-setting second quarter.
Kentucky Derby Week Growth
Despite challenging weather, the 2025 Derby Week nearly matched 2024's record adjusted EBITDA. Plans for 2026 include a new broadcast contract with NBC and strategic capital investments.
Increased Wagering and Viewership
Derby race wagering increased by 11%, Derby Day wagering by 9%, and Derby Week wagering by 6%. Viewership also rose, with a 6% increase in average viewership and an 8% increase in peak viewership.
HRM Facility Expansion
Continued progress in Virginia and Kentucky HRM facilities, with new projects on schedule and on budget, including the opening of a new venue in New Hampshire.
Negative Updates
Slight Decline in Regional Gaming
Wholly owned regional gaming properties experienced a $3.1 million decrease in adjusted EBITDA, with a 1.3-point drop in casino margins.
Challenges in Virginia HRM Properties
Some Virginia HRM properties faced marginal competition impacts, resulting in a $3 million decrease in comparison to the previous year.
Higher Legal Expenses for TwinSpires
TwinSpires Horse Racing's adjusted EBITDA was slightly down due to increased legal expenses compared to the prior year.
Company Guidance
During the Churchill Downs Incorporated 2025 Second Quarter Earnings Conference Call, the company provided robust guidance and record-breaking metrics. They reported all-time high net revenue of $934 million and adjusted EBITDA of $451 million, marking the fifth consecutive second quarter with record figures in these areas. The company outlined growth plans centered on the Kentucky Derby and HRM businesses, with a particular focus on expanding Derby Week, which had over 370,000 attendees in 2025. The Derby Week broadcast partnership with NBC reached nearly 18 million average viewers, an increase of 6% from 2024, and produced 285 million social media impressions, up 67% year-over-year. Wagering saw significant gains, with Derby race wagering up 11%, Derby Day wagering up 9%, and Derby Week wagering up 6% from the previous year. The company also highlighted strategic capital investments, such as the Starting Gate Pavilion project, and upcoming projects, including Finish Line Suites and The Mansion renovations, expected to be completed by Derby Week 2026. Additionally, Churchill Downs discussed ongoing developments in their HRM markets, including growth in Virginia and Kentucky, and the strategic acquisition in Salem, New Hampshire. The company plans to continue capital management strategies, such as maintaining a low leverage ratio and repurchasing shares, supported by favorable tax legislation projected to reduce cash taxes by $50 million to $60 million annually.

Churchill Downs Financial Statement Overview

Summary
Churchill Downs presents a strong financial position with consistent revenue growth and solid profitability margins. While leverage is high, return on equity is impressive, reflecting strong operational performance. The company displays excellent cash flow generation, enhancing its ability to invest and reduce debt. However, the high debt-to-equity ratio could pose risks if market conditions deteriorate.
Income Statement
85
Very Positive
Churchill Downs has demonstrated consistent revenue growth with a 5% increase over the TTM. The gross profit margin stands at 33.5%, indicating solid profitability. The net profit margin is healthy at 15.2%, and both EBIT and EBITDA margins are strong at 25.3% and 34.8% respectively, showcasing operational efficiency.
Balance Sheet
79
Positive
The company's debt-to-equity ratio is high at approximately 4.80, reflecting significant leverage. However, return on equity is strong at 41.2%, suggesting effective use of equity capital. The equity ratio is modest at 14.1%, indicating a lesser portion of equity in total assets which could pose risks in uncertain markets.
Cash Flow
82
Very Positive
Churchill Downs shows a robust operating cash flow to net income ratio of 1.83, reflecting efficient cash generation from operations. The free cash flow to net income ratio is commendable at 1.05, indicating sound conversion of income into cash. Free cash flow has grown significantly, suggesting improved liquidity and investment capacity.
BreakdownTTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue2.83B2.73B2.46B1.81B1.60B1.05B
Gross Profit946.90M938.50M795.70M566.40M446.10M193.50M
EBITDA985.60M1.07B1.01B875.10M536.80M185.90M
Net Income429.70M426.80M417.30M439.40M249.10M13.30M
Balance Sheet
Total Assets7.38B7.28B6.96B6.21B2.98B2.69B
Cash, Cash Equivalents and Short-Term Investments182.40M175.50M144.50M129.80M291.30M67.40M
Total Debt5.01B4.92B4.84B4.61B1.97B1.62B
Total Liabilities6.31B6.17B6.06B5.66B2.67B2.32B
Stockholders Equity1.04B1.08B893.60M551.50M306.80M367.10M
Cash Flow
Free Cash Flow451.00M225.70M-70.70M80.00M243.70M-92.30M
Operating Cash Flow786.10M772.70M605.80M536.80M335.50M141.90M
Investing Cash Flow-421.20M-545.20M-718.00M-3.10B-100.40M-239.40M
Financing Cash Flow-310.20M-196.60M129.30M2.42B-500.00K76.00M

Churchill Downs Technical Analysis

Technical Analysis Sentiment
Negative
Last Price101.94
Price Trends
50DMA
104.67
Negative
100DMA
100.60
Positive
200DMA
112.31
Negative
Market Momentum
MACD
-0.55
Positive
RSI
44.64
Neutral
STOCH
13.79
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 101.94 is below the 20-day moving average (MA) of 102.83, below the 50-day MA of 104.67, and below the 200-day MA of 112.31, indicating a bearish trend. The MACD of -0.55 indicates Positive momentum. The RSI at 44.64 is Neutral, neither overbought nor oversold. The STOCH value of 13.79 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 (61)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
81
Outperform
$7.15B17.4641.20%0.40%8.20%7.02%
76
Outperform
$6.87B13.1936.36%0.81%6.40%26.09%
72
Outperform
$6.59B23.7797.52%3.23%7.47%2.58%
68
Neutral
$13.05B37.01-51.73%0.81%-1.94%-53.90%
65
Neutral
$10.59B21.0017.34%0.89%-31.56%
61
Neutral
$17.96B13.14-5.29%3.00%1.25%-13.95%
52
Neutral
$5.36B-4.76%-0.15%28.05%
* Consumer Cyclical Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
CHDN
Churchill Downs
101.94
-34.34
-25.20%
BYD
Boyd Gaming
86.47
27.36
46.29%
MGM
MGM Resorts
37.03
2.02
5.77%
WYNN
Wynn Resorts
122.89
46.96
61.85%
CZR
Caesars Entertainment
25.75
-11.12
-30.16%
RRR
Red Rock Resorts
61.97
9.17
17.37%

Churchill Downs Corporate Events

M&A TransactionsBusiness Operations and Strategy
Churchill Downs Completes Major Acquisition in New Hampshire
Positive
Aug 27, 2025

On August 27, 2025, Churchill Downs Incorporated completed the acquisition of 90% of PPE Casino Resorts NH Holdings, LLC in Salem, New Hampshire for $180 million. This acquisition allows CDI to develop a charitable gaming, entertainment, and dining venue, with plans to expand and rebrand the facility, enhancing its market presence in the regional casino industry.

Stock BuybackBusiness Operations and Strategy
Churchill Downs Approves $500M Share Repurchase Program
Neutral
Jul 23, 2025

On July 23, 2025, Churchill Downs Incorporated announced the approval of a new $500 million share repurchase program by its Board of Directors. This program replaces the previous authorization from March 2025 and allows for repurchases at management’s discretion with no set time limit, potentially impacting the company’s financial strategy and shareholder value.

M&A TransactionsBusiness Operations and Strategy
Churchill Downs Acquires Majority Stake in Casino Salem
Positive
Jul 14, 2025

On July 14, 2025, Churchill Downs Incorporated announced definitive agreements to acquire 90% of Casino Salem in New Hampshire for $180 million. This acquisition allows CDI to develop a charitable gaming, entertainment, and dining destination featuring historical horse racing machines. Local developers Joe Faro and Sal Lupoli will retain a 10% stake, contributing their expertise to the project. The initial phase of Casino Salem opened on July 9, 2025, and CDI plans to expand the venue further, aiming to draw patrons from the New England market and support local charitable organizations. The transaction is expected to close in the third quarter of 2025, pending regulatory approval.

Executive/Board ChangesBusiness Operations and Strategy
Churchill Downs EVP Maureen Adams Announces Retirement
Neutral
Jun 26, 2025

On June 25, 2025, Maureen Adams, Executive Vice President of Gaming Operations at Churchill Downs Incorporated, announced her retirement effective December 31, 2025. The company has entered into a Memorandum of Understanding with Adams, detailing her retirement benefits, including a bonus, stock vesting, a retention payment, and the termination of a previous agreement, which may impact the company’s executive structure and operations.

Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

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.Date of analysis: Aug 29, 2025