Churchill Downs, Incorporated (CHDN)
Fair ValueFundamental
65
Price
$83.73
Market Cap
$5.77B
Part 1 · What the company is worth
Overview
Churchill Downs is an entertainment and gaming company with over 150 years of history, centered on operating the iconic Kentucky Derby racetrack. The company operates a diversified portfolio of live thoroughbred racing venues, historical racing machine properties, regional casino properties across nine states, and online wagering platforms. The enterprise combines brick-and-mortar gaming venues with digital platforms to serve racing enthusiasts, casual and premium gamblers, and online wagering customers.
How it makes money
Churchill Downs generates revenue through pari-mutuel commissions from live and historical horse racing wagering, where bettors place stakes in a shared pool and the company takes a fixed percentage commission. Additional revenue streams include gaming win from slot machines and table games at casino properties, online wagering through the TwinSpires platform and retail sports betting, simulcast fees from other wagering sites, technology licensing fees from its proprietary wagering systems (United Tote and Exacta), hotel operations, food and beverage sales, racing event admissions, and sponsorship and television rights agreements.
Revenue by segment
Generates revenue from pari-mutuel commissions on live thoroughbred racing at Churchill Downs Racetrack and historical racing machine operations across Kentucky, Virginia, and other states. Includes revenue from simulcast wagering, racing event admissions, sponsorships, television rights, and food and beverage services.
Operates wholly-owned regional casino properties across nine states (Florida, Indiana, Iowa, Louisiana, Maine, Maryland, Mississippi, New York, and Pennsylvania) featuring slot machines, video lottery terminals, and table games. Also includes equity investments in gaming properties in Illinois and Ohio. Hotels and hospitality services at these gaming venues contribute additional revenue.
Comprises the TwinSpires online horse racing platform, retail and online sports betting operations, United Tote pari-mutuel system licensing, and Exacta central determinant technology for historical racing machines. Provides technology and wagering infrastructure services to third-party operators.
Competitive moat
Brand · NarrowChurchill Downs' primary moat is the Kentucky Derby brand, described as "the longest continuously held annual sporting event in the U.S." This generates global media attention, attracts premium sponsors, and creates stable admissions revenue. The company also benefits from proprietary wagering technology (United Tote and Exacta systems) that creates switching costs for venue operators, scale advantages across 12 wholly-owned properties in multiple states, and an integrated business model that combines racing content with gaming venues. However, the moat is narrow because online gaming, casinos, state lotteries, and other entertainment alternatives continue to erode market share, and the regulatory environment remains uncertain.
What drives demand
CyclicalChurchill Downs' demand is cyclical and heavily dependent on discretionary consumer spending. During periods of economic expansion and rising consumer confidence, gaming visitation, wagering handle, and entertainment spending increase. During economic contractions or recessions, consumers reduce discretionary spending on gaming and racing entertainment. The Kentucky Derby week creates seasonal peaks in demand. Demand is also driven by sports betting legalization across states, the expansion of historical racing machine venues into new jurisdictions, and growth in online wagering adoption. However, long-term demand faces headwinds from online gaming alternatives and changing consumer preferences toward digital entertainment.
Key risks
- Regulatory and Legal Uncertainty — The company faces significant regulatory risks including potential changes in gaming regulations, sports betting restrictions, and pari-mutuel wagering laws across multiple jurisdictions. A class-action lawsuit challenges the legality of historical racing machines in Louisiana, potentially affecting approximately 500 HRM locations if the 2021 Historical Horse Racing Act is struck down. Compliance with complex data privacy and consumer protection regulations increases operating costs.
- Economic Sensitivity and Discretionary Spending — Churchill Downs' revenue depends heavily on consumers' discretionary spending. Economic downturns, elevated inflation, rising interest rates, or reduced consumer confidence can significantly decrease gaming visitation and wagering activity. The company's operations are cyclical and sensitive to broader macroeconomic conditions that affect leisure spending and entertainment demand.
- Intense Competition — Competition from regional casinos, Native American gaming operations, state lotteries, and rapidly growing online gaming platforms threatens market share and pricing power. Sports betting legalization has opened new competitive channels. The company must continually invest to maintain competitive positioning against better-capitalized competitors and emerging technology platforms.
- High Financial Leverage — Churchill Downs operates with net debt to EBITDA of approximately 4.0x, which is elevated relative to industry averages. High leverage constrains financial flexibility to respond to unexpected challenges, make strategic acquisitions, or invest in growth opportunities. Interest rate increases raise debt servicing costs and reduce cash available for shareholder returns.
- Labor Market and Operational Disruptions — Shortages of skilled labor, union negotiations, and general labor market disruptions could constrain operations and increase wage costs. The company employs approximately 8,870 team members, with seasonal staffing peaks during Kentucky Derby week. Workforce availability and wage inflation represent ongoing operational challenges.
The case for
Buyers argue that Churchill Downs benefits from an enduring brand moat centered on the Kentucky Derby, the longest continuously held annual sporting event in the U.S., which generates global media attention and premium sponsorship value. The company has demonstrated strong financial performance, with 2024 revenue reaching $2.7 billion (up 11% year-over-year) and adjusted EBITDA of $1.2 billion. Expansion into historical racing machines and new gaming jurisdictions (such as the Terre Haute Casino Resort in Indiana and the Rose Gaming Resort in Virginia) provides multi-year growth opportunities. Churchill Downs' integrated business model—combining live racing, historical racing machines, regional casinos, and online wagering—creates cross-selling opportunities and diversified revenue streams. The company has disciplined capital allocation, returning $218.3 million to shareholders in 2024 through dividends and share buybacks, while maintaining a $0.409 annual dividend (up 7% year-over-year). Sports betting legalization across multiple states and the growth of online wagering through TwinSpires represent expanding addressable markets.
The case against
Sellers fear that Churchill Downs faces structural headwinds from secular shifts toward online gaming and digital entertainment platforms that bypass physical venues. The company operates with elevated leverage (net debt to EBITDA of 4.0x), constraining financial flexibility and increasing sensitivity to interest rate shocks or operational underperformance. Margin compression—from 15.3% to 13.8%—signals that revenue growth is not translating into proportional profit growth, raising questions about operating leverage and cost management. Major regulatory and legal risks could materially impact profitability, including potential restrictions on historical racing machines (Louisiana litigation) and changes in gaming regulations across jurisdictions. The business model is heavily dependent on discretionary consumer spending, making it vulnerable to economic downturns and inflation-driven reductions in leisure spending. Sellers also worry about execution risks on the planned portfolio restructuring (including the sale of nine regional gaming properties) and the sustainability of high capital expenditure requirements ($350–$400 million planned for 2025) at a time when free cash flow margins lag peers. Intense competition from larger casino operators, Native American gaming, state lotteries, and better-capitalized online platforms threatens market share.
Generated with artificial intelligence on September 21, 2026, shared with all users
Direct competitors
Who this company fights with for the same customers
Generated with artificial intelligence on September 18, 2026, shared with all users
Penn runs racetrack-casinos and regional properties in the same Midwest and Southern markets as Churchill Downs, and competes for the same local gaming customer both on the casino floor and online.
Through TVG/FanDuel Racing it is the closest rival to TwinSpires for online horse-race wagering in the United States, with a handle of a size comparable to Churchill Downs' own platform.
Caesars competes in the same regional casino markets, including Louisiana and the Midwest, and is pushing into racing-and-gaming venues of the kind Churchill Downs builds around historical racing machines.
It owns flagship tracks such as Santa Anita, Pimlico and Gulfstream Park and the Xpressbet wagering platform, competing with Churchill Downs for the same bettors, the same race dates and the same horsemen.
Boyd operates regional casinos in Louisiana, Mississippi and the Midwest that draw on the same local customer base as Churchill Downs' gaming properties.
NYRA runs Saratoga, Belmont and Aqueduct and its own NYRA Bets platform, competing with Churchill Downs for premier race meets and for the online wagering handle they generate.
Balance Sheet & Liquidity
Revenue
$2.99B
Trailing 12 months (through 6/30/2026)
Net Income
$413M
Trailing 12 months (through 6/30/2026)
Free Cash Flow
-
Total Equity
$1.01B
Total Liabilities
$6.43B
Current Ratio
0.36
Interest Coverage
2.47
Debt/EBITDA
5.21
Earnings Per Share
Revenue & Net Income
Free Cash Flow
Income Breakdown
Historical statement
Margins over time
Debt over time
How heavy the debt is
Growth grid
Growth — Revenue
Fair Value Estimation
Fair Value
$91.48
Current Price
$83.73
Margin of Safety
+8.5%
Fair Value Range
$65.06 - $117.89
Spread across the valuation methods used, not a statistically calibrated confidence interval.
Estimation Methods
Valuation Metrics
P/E Ratio
14.29
ROE
37.9%
P/B Ratio
4.35
P/FCF
-
Gross Margin
-
ROIC
9.3%
Profitability Radar
Value Creation (Economic Moat)
ROIC
9.3%
WACC
7.1%
ROIC − WACC
+2.1 pp
ROIC exceeds the cost of capital — the company is creating value for shareholders.
Fundamental Analysis Criteria
Passed (14)
- EPS shows upward trend
- EPS CAGR 9.66%
- Price CAGR 12.37%
- ROIC 9.3%
- Operating margin 24.1%
- Interest coverage
- Debt/EBITDA
- Return on tangible assets
- ROE 36.9%
- Revenue growth 5Y 22.6%
- Earnings surprise, average 4.4%
- Earnings quality (operating cash flow / net income) 1.92
- Share dilution -3.6%
- Piotroski F-Score 6/9
Failed (7)
- P/B ratio 4.35
- Debt/equity ratio
- Current ratio
- Low reliance on intangibles
- Price below Graham Number
- DCF valuation (Overvalued)
- Net margin trend 13.8% vs 15.2%
Unavailable (6)
- Gross margin –
- P/FCF –
- Dividend payout –
- Positive free cash flow
- CapEx intensity
- PEG ratio (needs P/E > 0 and growth > 0)
Piotroski F-Score
Mixed signals: some areas need attention
Earnings Quality
High quality: earnings backed by cash
Share Dilution
Buying back shares. Shareholder friendly
Institutional Holdings
Governance
Executive Team
| Name | Title | Age |
|---|---|---|
| Mr. William C. Carstanjen | CEO & Director | 57 |
| Mr. William E. Mudd | President & COO | 54 |
| Ms. Marcia Ann Dall CPA | Executive VP & CFO | 61 |
| Mr. Bradley K. Blackwell J.D. | Executive VP, General Counsel & Secretary | 53 |
| Mr. Jon E. Rauch | VP & Chief Accounting Officer | - |
| Mr. Nate Simon | Senior VP & CTO | - |
| Sam Ullrich | Vice President of Investor Relations | - |
| Mr. Jason Sauer | Senior Vice President of Corporate Development | - |
| Ms. M. Katherine Armstrong | Senior VP of Human Resources | - |
| Mr. Michael W. Anderson | Senior VP & President of Churchill Downs Racetrack | 54 |
Audit Risk
4
Board Risk
2
Compensation Risk
3
Shareholder Rights Risk
7
Documents
- View document
Annual Report (10-K)
A yearly overview of the business, its financial results, and the risks it faces.
Filed on 2026-02-25
- View document
Quarterly Report (10-Q)
A snapshot of financial performance for the most recent three-month period.
Filed on 2026-07-29
- View document
Current Report (8-K)
An announcement of a major event, such as a leadership change or big news.
Filed on 2026-09-28
via SEC EDGAR
Income History
via SEC EDGAR
Part 2 · The price and its context
This part shows how the price has behaved, not whether the company is worth owning. Inside: technical analysis, potential, historical drawdowns, gamma exposure.
Market Reaction Profile
How much CHDN moves, measured on its daily prices.
More volatile than 47% of the tracked stocks (90-day volatility).
- Volatility 30d
- 36.0%
- Volatility 90d
- 34.9%
- Beta vs S&P 500 (1y)
- 0.51Correlation 0.19
- Max drawdown (12m)
- -37.1%
- ATR (14d, % of price)
- 3.03%
Earnings reactions
How CHDN moved around its past quarterly results.
Next earnings release
Oct 28, 2026 · In 4 days · After the close
EPS estimate: 1.10Revenue estimate: $695M
What usually happens
- Over the last 12 releases the stock moved a median of 4.6% the next day, up or down.
- Next-day moves: up 7, down 5 (out of 12).
Release history
| Date | When | EPS est. | EPS actual | Surprise | Gap | 1 day | 5 days |
|---|---|---|---|---|---|---|---|
| Jul 29, 2026 | After the close | 3.49 | 3.45 | -1.1% | -3.5% | -6.6% | -2.4% |
| Apr 22, 2026 | After the close | 1.02 | 1.21 | +18.2% | +3.5% | +10.1% | +13.7% |
| Feb 25, 2026 | After the close | 1.05 | 0.97 | -8.0% | -1.4% | -6.0% | -5.6% |
| Oct 22, 2025 | After the close | 1.00 | 1.09 | +8.6% | +5.5% | +7.8% | +4.6% |
| Jul 23, 2025 | After the close | n/a | n/a | n/a | +4.0% | +4.2% | +0.9% |
| Apr 23, 2025 | After the close | n/a | n/a | n/a | -2.5% | -16.2% | -13.9% |
| Feb 19, 2025 | After the close | n/a | n/a | n/a | +0.3% | -0.4% | -4.0% |
| Oct 23, 2024 | After the close | n/a | n/a | n/a | -3.0% | +4.5% | +7.3% |
| Jul 24, 2024 | After the close | n/a | n/a | n/a | +0.3% | +0.5% | +4.6% |
| Apr 24, 2024 | After the close | n/a | n/a | n/a | +5.4% | +4.7% | +5.2% |
| Feb 21, 2024 | After the close | n/a | n/a | n/a | +2.6% | +2.1% | +3.8% |
| Oct 25, 2023 | After the close | n/a | n/a | n/a | +3.9% | -0.3% | +0.4% |
Release dates from SEC 8-K filings.
Updated 10/24/2026
Historical statistics for educational purposes only. They are not forecasts and not investment advice.
Price reaction to the news
Latest news on CHDN and what the price did next.
- 2/21/2026PositiveBeck Bode Initiates Churchill Downs Position as Regional Gaming Expansion Lifts Growth Prospects
- +1 day
- +1.3%
- +3 days
- +2.1%
Return of the stock minus return of SPY over the same days. A news item close to a price move did not necessarily cause it. Historical data for educational purposes only, not investment advice.
Latest News
Recent headlines for CHDN.
- 2/21/2026POSITIVEBeck Bode Initiates Churchill Downs Position as Regional Gaming Expansion Lifts Growth Prospects
Beck Bode has initiated a position in Churchill Downs Inc., signaling confidence in the company's growth prospects. Churchill Downs is actively expanding its network of casinos and historical racing venues, aiming to generate recurring revenue streams from the gaming sector. Investors are assessing the effectiveness of this investment phase, but Beck Bode's initiative suggests a positive outlook on the economic returns of these expansions. The strategy seeks to diversify profit sources beyond the traditional annual horse racing event, solidifying the company's presence in the gaming market.