Churchill Downs Inc (CHDN) stock analysis

P/E below its 5-year median

Churchill Downs's P/E of 15.6 is below its own 5-year median of 21.0.

P/E below the industry

Churchill Downs's P/E of 15.6 is below the Amusement and Recreation Services median of 35.3.

EV/EBITDA below its 5-year median

Churchill Downs's EV/EBITDA of 11.4 is below its 5-year median of 16.3.

P/B above the industry

Churchill Downs's price-to-book of 5.00 is above the Amusement and Recreation Services median of 3.09.

Trading below fair value

The share price of $100.64 is below our fair value estimate of $154.30.

Margin of safety over 20%

The price is 34.8% below fair value, more than the 20% cushion we look for.

Revenue growing 10%+ a year

Revenue grew 17.4% a year over the last three fiscal years.

EPS growth over 3 years

Needs positive EPS three years ago and today.

Earnings acceleration

Needs positive net income now, a year ago and five years ago.

Growing slower than the industry

Revenue grew 4.2% over the last twelve months; the Amusement and Recreation Services median is 7.0%.

Guidance issued

The latest outlook (2026 capital projects, Oct 28, 2026) was issued for the first time, so it neither adds nor takes away points.

Gross margin trend

This company does not report gross profit.

Return on equity over 15%

Return on equity was 37.7% over the last twelve months and averaged 62.8% over five years.

Return on capital under 10%

Return on invested capital was 9.3%, below the 10% that usually covers the cost of capital.

Return on equity above the industry

Churchill Downs's return on equity of 37.7% is above the Amusement and Recreation Services median of -10.5%.

Earnings over 5 years

Needs positive net income five years ago and in the latest year.

Net margin below its 5-year average

Net margin was 15.1% over the last twelve months, against a 5-year average of 17.1%.

Net margin above the industry

Churchill Downs's net margin of 15.1% is above the Amusement and Recreation Services median of 0.5%.

High debt

Debt is 342% of shareholders' equity, above the 40% we consider low.

Debt falling against equity

Debt to equity fell from 442% five years ago to 342%.

Debt not well covered by cash flow

Operating cash flow over the last twelve months equals 16.0% of total debt; we look for at least 20%.

Interest not well covered

Operating income covers interest expense 2.7 times; we look for at least 5.

Short-term assets don't cover short-term debts

Current assets are 0.32 times current liabilities.

Elevated bankruptcy risk

The Altman Z-score is 1.54; above 3 is the safe zone and below 1.8 the distress zone.

Pays a dividend

Churchill Downs paid dividends worth 0.4% of the share price over the last twelve months.

Yield below Treasuries

The 0.4% yield is below the 4.4% on a 1-year Treasury.

Yield below the top quarter

The top quarter of US dividend payers yield 3.8% or more; Churchill Downs yields 0.4%.

Dividend not cut

The dividend per share has not fallen by more than 10% in any of the last 10 fiscal years.

Covered by earnings

Dividends take 7.0% of net income.

Cash-flow cover

Needs dividends paid and free cash flow.