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1. Company Snapshot

1.a. 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.

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1.b. Last Insights on CHDN

Churchill Downs Incorporated's recent performance was driven by strong Q1 2026 earnings, with quarterly earnings of $1.21 per share, beating estimates. The company's growth prospects are fueled by expansion in Historical Racing Machines and premium ticketing initiatives. Analysts increased their forecasts, citing a potential upside of 37.7%. A 10-year EBIT CAGR of 16.7% and healthy cash flow also contribute to the company's compelling long-term equity case. Institutional investors, such as Blair William & Co. IL, have increased their stakes, demonstrating confidence in the company's prospects.

1.c. Company Highlights

2. Racing Revenues Surge, Derby Drives EBITDA

First‑quarter results for the Kentucky Derby‑centric racing firm were a record haul, with net revenues climbing to $663 million and adjusted EBITDA reaching $257 million—an 18% jump year‑over‑year. Earnings per share topped expectations at $1.21 versus the consensus of $1.06, underscoring a 13% beat on the EPS frontier. Free cash flow hit $276 million, translating to $3.94 per share, while the company’s valuation sits at a P/E of 17.68 and a P/B of 6.25, reflecting moderate upside potential in a high‑margin business model. <sup>1</sup>

Publication Date: Apr -24

📋 Highlights
  • Record Financial Performance:: Q1 net revenues reached $663 million, with adjusted EBITDA hitting $257 million, driven by strong growth in both Live and Historical Racing segments.
  • Marshall Yards Expansion:: New Kentucky HRM facility opened on time and budget, contributing to 17% EBITDA growth ($9M increase) in Kentucky due to Western/Northern Kentucky expansion.
  • Virginia Legislative Outcomes:: Governor vetoed iGaming and skill games proposals, preserving a favorable operating environment, while securing 48 race dates in 2026 with significant purse funding for racing.
  • Preakness Stakes Acquisition:: Secured IP rights for Preakness and Black-Eyed Susan Stakes, enhancing brand value and aligning with Triple Crown prominence in horse racing.

Revenue and Margin Growth

Record first‑quarter revenue of $663 million was driven by a 17% increase in adjusted EBITDA at the Kentucky HRMs, buoyed by the successful launch of Marshall Yards. Virginia operations added 6% to EBITDA, while the Wagering Services and Solutions segment also posted record performance. These gains are anchored by the firm’s focus on high‑end ticketing and electronic table game expansion, which have attracted new customer segments and amplified wagering volume.

Free Cash Flow and Capital Allocation

With $276 million of free cash flow, the company has ample liquidity to fund high‑return growth initiatives, including the Preakness Stakes IP acquisition and Derby Week upgrades. The firm’s free cash flow yield stands at 10.75%, and it maintains a Net Debt/EBITDA ratio of 4.53, indicating a solid balance‑sheet footing that supports both reinvestment and shareholder returns.

Legislative Environment and Strategic Moves

Recent Virginia legislative outcomes—vetoes of skill‑game and casino proposals—have preserved a favorable operating climate, allowing the company to continue job creation and purse funding initiatives. In Kentucky, the successful introduction of electronic table games has broadened the customer base, while the firm’s acquisition of the Preakness Stakes IP positions it to capture the prestige of a second Triple Crown leg.

Future Outlook and Growth Drivers

Management projects a 3.5% revenue growth for the next fiscal year, bolstered by the Kentucky Derby’s projected $15‑$20 million EBITDA lift and expansion of Derby Week into a week‑long national event. International ticket sales and enhanced hospitality suites are slated to drive higher margins and attendance, reinforcing the firm’s high ROE of 37.07% and ROIC of 8.5%.

Valuation Assessment

At a P/S of 2.32 and EV/EBITDA of 11.08, the stock trades at a modest premium relative to peers, with a dividend yield of 0.45%. The company’s strong free‑cash‑flow generation and disciplined capital structure provide a cushion for continued dividend growth and potential share repurchases, positioning the firm as a compelling play in the niche racing and wagering sector.

3. NewsRoom

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Always A Runner Claims the Lilies for the 152nd Running of the Longines Kentucky Oaks

03:19

Source: globenewswire.com

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Always A Runner Claims the Lilies for the 152nd Running of the Longines Kentucky Oaks

03:19

Source: globenewswire.com

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Investing in Sin Stocks: High Returns From Unconventional Industries

Apr -30

Source: zacks.com

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3 Undervalued PEG Stocks With Double-Digit Growth to Buy Now

Apr -29

Source: zacks.com

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Looking for a Growth Stock? 3 Reasons Why Churchill Downs (CHDN) is a Solid Choice

Apr -29

Source: zacks.com

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CHDN or TTWO: Which Is the Better Value Stock Right Now?

Apr -29

Source: zacks.com

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Does Churchill Downs (CHDN) Have the Potential to Rally 37.74% as Wall Street Analysts Expect?

Apr -29

Source: zacks.com

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These Analysts Increase Their Forecasts On Churchill Downs After Upbeat Q1 Results

Apr -24

Source: benzinga.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (8.61%)

6. Segments

Live and Historical Racing

Expected Growth: 8%

Churchill Downs Incorporated's Live and Historical Racing segment growth is driven by increasing popularity of horse racing, strategic acquisitions, and expansion of online wagering platforms. Additionally, the company's focus on improving customer experience, enhancing racing products, and investing in technology infrastructure have contributed to the 8% growth.

Gaming

Expected Growth: 10%

Churchill Downs Incorporated's 10% growth in Gaming is driven by increasing popularity of online gaming, strategic acquisitions, and expansion into new markets. Additionally, the company's focus on improving customer experience, investing in digital infrastructure, and leveraging data analytics to enhance marketing efforts have contributed to the growth.

Twin Spires

Expected Growth: 7%

Twin Spires' 7% growth is driven by increasing online wagering, strategic marketing efforts, and expansion into new jurisdictions. Additionally, the rise of mobile betting, improved user experience, and growing popularity of horse racing contribute to the segment's growth.

All Other

Expected Growth: 6%

Churchill Downs Incorporated's 'All Other' segment growth is driven by increasing demand for its online wagering platform, TwinSpires, and its casino gaming operations. The company's strategic acquisitions, such as the purchase of Presque Isle Downs & Casino, have also contributed to growth. Additionally, the expansion of sports betting and iGaming in the US has created new opportunities for the company.

7. Detailed Products

Racing

Churchill Downs Incorporated operates horse racing tracks, including the iconic Churchill Downs Racetrack, home of the Kentucky Derby.

Gaming

The company operates casinos and gaming facilities, offering a range of games, including slots, table games, and poker.

Online Wagering

Churchill Downs Incorporated offers online wagering platforms, allowing customers to bet on horse racing and sports from the comfort of their own homes.

Sports Betting

The company offers sports betting services, allowing customers to place bets on various sports and events.

Casino Operations

Churchill Downs Incorporated operates casinos, offering a range of gaming options, dining, and entertainment.

Racing and Sports Technology

The company provides technology solutions for the horse racing and sports industries, including tote systems and sports betting platforms.

8. Churchill Downs Incorporated's Porter Forces

Forces Ranking

Threat Of Substitutes

Churchill Downs Incorporated has a low threat of substitutes due to the unique experience offered by its horse racing and gaming operations.

Bargaining Power Of Customers

Churchill Downs Incorporated has a medium bargaining power of customers due to the presence of multiple competitors in the gaming and entertainment industry.

Bargaining Power Of Suppliers

Churchill Downs Incorporated has a low bargaining power of suppliers due to its strong relationships with vendors and suppliers in the industry.

Threat Of New Entrants

Churchill Downs Incorporated has a high threat of new entrants due to the growing popularity of online gaming and sports betting, which may attract new competitors.

Intensity Of Rivalry

Churchill Downs Incorporated operates in a highly competitive industry with intense rivalry among existing players, which may impact its market share and revenue.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 84.40%
Debt Cost 7.47%
Equity Weight 15.60%
Equity Cost 8.88%
WACC 7.69%
Leverage 541.22%

11. Quality Control: Churchill Downs Incorporated passed 4 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
Boyd Gaming

A-Score: 6.0/10

Value: 6.5

Growth: 7.2

Quality: 6.5

Yield: 1.0

Momentum: 7.0

Volatility: 8.0

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Vail Resorts

A-Score: 5.6/10

Value: 4.0

Growth: 5.9

Quality: 6.4

Yield: 8.0

Momentum: 3.0

Volatility: 6.7

1-Year Total Return ->

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Wynn Resorts

A-Score: 5.2/10

Value: 5.6

Growth: 6.1

Quality: 4.7

Yield: 1.0

Momentum: 8.0

Volatility: 5.7

1-Year Total Return ->

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Stock-Card
Churchill Downs

A-Score: 4.7/10

Value: 4.3

Growth: 8.9

Quality: 5.5

Yield: 0.0

Momentum: 1.5

Volatility: 7.7

1-Year Total Return ->

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Marriott Vacations Worldwide

A-Score: 4.6/10

Value: 7.4

Growth: 5.7

Quality: 4.0

Yield: 6.0

Momentum: 1.0

Volatility: 3.3

1-Year Total Return ->

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MGM Resorts

A-Score: 4.0/10

Value: 4.2

Growth: 7.6

Quality: 2.6

Yield: 0.0

Momentum: 4.0

Volatility: 5.7

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

98.65$

Current Price

98.65$

Potential

-0.00%

Expected Cash-Flows