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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 positively driven by its Q3 earnings beat, with quarterly earnings of $1.09 per share exceeding the Zacks Consensus Estimate of $0.97 per share. The company's strong results were highlighted in its Q3 2025 earnings call, where management discussed the quarter's performance. Additionally, 10 analysts have issued a buy recommendation, with one hold rating, resulting in a consensus rating of "Moderate Buy" from 11 research firms. Institutional investors, such as Bank of Montreal Can, continue to hold positions in the company.

1.c. Company Highlights

2. Churchill Downs Shines with Record Q3 Earnings

Churchill Downs Incorporated reported a stellar third quarter of 2025, with record net revenue and adjusted EBITDA. The company's Live and Historical Racing segment saw revenue grow 21% and adjusted EBITDA grow 25% compared to the prior year quarter. The Wagering Services & Solutions segment delivered record third-quarter adjusted EBITDA, driven by the growth of the Exacta business. Earnings per share (EPS) came in at $1.09, beating analyst estimates of $0.97. Revenue growth was robust across the board, with regional gaming properties also performing well, as adjusted EBITDA increased over $3 million and margins expanded 1.1 points compared to the prior year quarter.

Publication Date: Oct -26

📋 Highlights
  • Record Q3 Performance:: Churchill Downs reported record net revenue and adjusted EBITDA for Q3 2025, with Live and Historical Racing segment revenue up 21% and adjusted EBITDA up 25% year-over-year.
  • Wagering Segment Growth:: Wagering Services & Solutions achieved record Q3 adjusted EBITDA, driven by a 40% growth in Exacta business revenue (from $50M to $70M+).
  • Regional Gaming Momentum:: Regional gaming properties delivered over $3M EBITDA increase and 1.1-point margin improvement, reflecting operational efficiency and demand for premium offerings.
  • Strong Free Cash Flow and Returns:: Generated $166M ($2.34/share) in free cash flow, repurchased $50M in shares, and raised dividends by 7%, with a target 20% unlevered IRR for the $280–300M Victory Run project.
  • Strategic Expansion and Capital Allocation:: Plans to invest $180–200M in New Hampshire’s Casino Salem and open an 8th HRM venue in 2026, supported by a 10% free cash flow yield and disciplined $200–240M annual project capital spend.

Growth Catalysts and Investment Plans

The company has several growth catalysts on the horizon, including ticketing revenue driven by premium experiences during Derby Week, broadcast rates, wagering, sponsorships, and licensing. Churchill Downs plans to invest $280 million to $300 million to build a new structure called Victory Run at Churchill Downs Racetrack, which will offer premium hospitality offerings. Additionally, the company is on track to open its eighth HRM entertainment venue in Calvert City during the first quarter of 2026 and has completed the acquisition of a 90% interest in the Casino Salem project in New Hampshire.

Cash Flow and Capital Allocation

The company generated $166 million or $2.34 per share of free cash flow in the third quarter, primarily from the strong cash flow generated from its businesses. Churchill Downs spent $53 million of maintenance capital and $172 million in project capital through the first 9 months of the year. The company repurchased over $50 million of its stock in the third quarter under its share repurchase program, and its Board of Directors approved a 7% increase in its dividend. With a free cash flow yield of approximately 10% based on trailing 12 months results, the company's capital allocation strategy appears to be focused on returning value to shareholders.

Valuation and Outlook

At the current price, Churchill Downs trades at a P/E Ratio of 17.61 and an EV/EBITDA multiple of 11.2. The company's ROE stands at 38.11%, indicating strong profitability. Analysts estimate next year's revenue growth at 3.9%. The new federal tax bill is expected to improve free cash flow due to favorable cash taxes, with estimated impacts of $50-60 million in both 2025 and 2026. With a solid track record of dividend growth and a commitment to creating long-term shareholder value, Churchill Downs appears well-positioned for continued success.

3. NewsRoom

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Creative Planning Buys 3,770 Shares of Churchill Downs, Incorporated $CHDN

Dec -02

Source: defenseworld.net

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Bank of Montreal Can Has $904,000 Holdings in Churchill Downs, Incorporated $CHDN

Nov -16

Source: defenseworld.net

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Is the Options Market Predicting a Spike in CHDN Stock?

Nov -06

Source: zacks.com

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Sharplink Gaming (NASDAQ:SBET) & Churchill Downs (NASDAQ:CHDN) Head to Head Comparison

Nov -03

Source: defenseworld.net

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ADP, Snap-on Lead 14 Companies To Announce Annual Increases In First Half Of November

Nov -02

Source: seekingalpha.com

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Hagens Berman: Class-Action Lawsuit Unveils Massive AI Horse Betting Manipulation Scheme

Oct -24

Source: businesswire.com

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Churchill Downs Incorporated (CHDN) Q3 2025 Earnings Call Transcript

Oct -23

Source: seekingalpha.com

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Churchill Downs (CHDN) Q3 Earnings: How Key Metrics Compare to Wall Street Estimates

Oct -22

Source: zacks.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

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Boyd Gaming

A-Score: 6.3/10

Value: 6.2

Growth: 7.3

Quality: 6.6

Yield: 1.0

Momentum: 8.5

Volatility: 8.0

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Vail Resorts

A-Score: 5.5/10

Value: 3.7

Growth: 5.9

Quality: 5.5

Yield: 8.0

Momentum: 3.0

Volatility: 7.0

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Marriott Vacations Worldwide

A-Score: 5.4/10

Value: 6.7

Growth: 5.8

Quality: 5.5

Yield: 6.0

Momentum: 3.5

Volatility: 4.7

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Wynn Resorts

A-Score: 5.0/10

Value: 5.4

Growth: 5.7

Quality: 4.8

Yield: 1.0

Momentum: 7.5

Volatility: 5.7

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Churchill Downs

A-Score: 4.5/10

Value: 4.3

Growth: 8.9

Quality: 5.5

Yield: 0.0

Momentum: 1.0

Volatility: 7.3

1-Year Total Return ->

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MGM Resorts

A-Score: 3.9/10

Value: 4.4

Growth: 7.7

Quality: 2.4

Yield: 0.0

Momentum: 3.5

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

112.49$

Current Price

112.49$

Potential

-0.00%

Expected Cash-Flows