NasdaqGS:CHDN

Stock Analysis Report

Executive Summary

Churchill Downs Incorporated operates as a racing, gaming, and online entertainment company in the United States.

Rewards

Trading at 36.8% below its fair value

Earnings are forecast to grow 11.07% per year

Risk Analysis

Has a high level of debt

Profit margins (11.3%) are lower than last year (21.6%)



Snowflake Analysis

Mediocre balance sheet and slightly overvalued.


Similar Companies

Share Price & News

How has Churchill Downs's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: CHDN has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

-0.6%

CHDN

-3.2%

US Hospitality

-0.09%

US Market


1 Year Return

59.8%

CHDN

15.0%

US Hospitality

23.9%

US Market

Return vs Industry: CHDN exceeded the US Hospitality industry which returned 20.1% over the past year.

Return vs Market: CHDN exceeded the US Market which returned 24.7% over the past year.


Shareholder returns

CHDNIndustryMarket
7 Day-0.6%-3.2%-0.09%
30 Day7.2%0.3%3.1%
90 Day7.2%9.9%10.4%
1 Year60.5%59.8%18.0%15.0%26.6%23.9%
3 Year202.8%197.6%38.6%29.3%50.9%41.2%
5 Year358.1%342.9%52.7%36.5%78.1%58.5%

Price Volatility Vs. Market

How volatile is Churchill Downs's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Churchill Downs undervalued compared to its fair value and its price relative to the market?

36.2%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: CHDN ($140.09) is trading below our estimate of fair value ($221.56)

Significantly Below Fair Value: CHDN is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: CHDN is poor value based on its PE Ratio (39.5x) compared to the Hospitality industry average (25.1x).

PE vs Market: CHDN is poor value based on its PE Ratio (39.5x) compared to the US market (18.9x).


Price to Earnings Growth Ratio

PEG Ratio: CHDN is poor value based on its PEG Ratio (3.6x)


Price to Book Ratio

PB vs Industry: CHDN is overvalued based on its PB Ratio (10x) compared to the US Hospitality industry average (2.4x).


Next Steps

Future Growth

How is Churchill Downs forecast to perform in the next 1 to 3 years based on estimates from 3 analysts?

11.1%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: CHDN's forecast earnings growth (11.1% per year) is above the savings rate (1.7%).

Earnings vs Market: CHDN's earnings (11.1% per year) are forecast to grow slower than the US market (14.3% per year).

High Growth Earnings: CHDN's earnings are forecast to grow, but not significantly.

Revenue vs Market: CHDN's revenue (7.2% per year) is forecast to grow slower than the US market (7.5% per year).

High Growth Revenue: CHDN's revenue (7.2% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: CHDN's Return on Equity is forecast to be high in 3 years time (23.9%)


Next Steps

Past Performance

How has Churchill Downs performed over the past 5 years?

29.4%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: CHDN has high quality earnings.

Growing Profit Margin: CHDN's current net profit margins (11.3%) are lower than last year (21.6%).


Past Earnings Growth Analysis

Earnings Trend: CHDN's earnings have grown significantly by 29.4% per year over the past 5 years.

Accelerating Growth: CHDN's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: CHDN had negative earnings growth (-32%) over the past year, making it difficult to compare to the Hospitality industry average (-18.9%).


Return on Equity

High ROE: Whilst CHDN's Return on Equity (25.93%) is high, this metric is skewed due to their high level of debt.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Churchill Downs's financial position?


Financial Position Analysis

Short Term Liabilities: CHDN's short term assets ($301.9M) exceed its short term liabilities ($275.8M).

Long Term Liabilities: CHDN's short term assets ($301.9M) do not cover its long term liabilities ($1.7B).


Debt to Equity History and Analysis

Debt Level: CHDN's debt to equity ratio (267.8%) is considered high.

Reducing Debt: CHDN's debt to equity ratio has increased from 54.6% to 267.8% over the past 5 years.

Debt Coverage: CHDN's debt is well covered by operating cash flow (21.9%).

Interest Coverage: CHDN's interest payments on its debt are well covered by EBIT (4.2x coverage).


Balance Sheet

Inventory Level: CHDN has a high level of physical assets or inventory.

Debt Coverage by Assets: CHDN's debt is not covered by short term assets (assets are 0.2x debt).


Next Steps

Dividend

What is Churchill Downs's current dividend yield, its reliability and sustainability?

0.41%

Current Dividend Yield


Dividend Yield vs Market

company0.4%marketbottom25%1.4%markettop25%3.7%industryaverage2.9%forecastin3Years0.4%

Current dividend yield vs market & industry

Notable Dividend: CHDN's dividend (0.41%) isn’t notable compared to the bottom 25% of dividend payers in the US market (1.4%).

High Dividend: CHDN's dividend (0.41%) is low compared to the top 25% of dividend payers in the US market (3.66%).


Stability and Growth of Payments

Stable Dividend: CHDN is not paying a notable dividend for the US market, therefore no need to check if payments are stable.

Growing Dividend: CHDN is not paying a notable dividend for the US market, therefore no need to check if payments are increasing.


Current Payout to Shareholders

Dividend Coverage: CHDN is not paying a notable dividend for the US market.


Future Payout to Shareholders

Future Dividend Coverage: No need to calculate the sustainability of CHDN's dividend in 3 years as they are not forecast to pay a notable one for the US market.


Next Steps

Management

What is the CEO of Churchill Downs's salary, the management and board of directors tenure and is there insider trading?

5.4yrs

Average management tenure


CEO

Bill Carstanjen (51yo)

5.4yrs

Tenure

US$21,120,369

Compensation

Mr. William C. Carstanjen, also known as Bill, has been the Chief Executive Officer of Churchill Downs Incorporated since August 2014. Mr. Carstanjen served as the Chief Operating Officer of Churchill Down ...


CEO Compensation Analysis

Compensation vs Market: Bill's total compensation ($USD21.12M) is above average for companies of similar size in the US market ($USD6.46M).

Compensation vs Earnings: Bill's compensation has increased by more than 20% whilst company earnings have fallen more than 20% in the past year.


Management Age and Tenure

5.4yrs

Average Tenure

55yo

Average Age

Experienced Management: CHDN's management team is seasoned and experienced (5.4 years average tenure).


Board Age and Tenure

6.3yrs

Average Tenure

64yo

Average Age

Experienced Board: CHDN's board of directors are considered experienced (6.3 years average tenure).


Insider Trading

Insider Buying: CHDN insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

BuyUS$123,16007 Nov 19
Karole Lloyd
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares1,000
Max PriceUS$123.16
BuyUS$37,43005 Nov 19
R. Rankin
EntityIndividual
Role
Chairman of the Board
Independent Chairman of the Board
Shares300
Max PriceUS$124.77
BuyUS$50,91501 May 19
R. Rankin
EntityIndividual
Role
Chairman of the Board
Independent Chairman of the Board
Shares500
Max PriceUS$101.83
BuyUS$85,21925 Mar 19
Karole Lloyd
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares1,000
Max PriceUS$85.22

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Management Team

  • Bill Carstanjen (51yo)

    CEO & Director

    • Tenure: 5.4yrs
    • Compensation: US$21.12m
  • Marcia Dall (55yo)

    Executive VP & CFO

    • Tenure: 4.3yrs
    • Compensation: US$2.55m
  • T. Flanery (55yo)

    Senior VP & President of Churchill Downs Racetrack

    • Bill Mudd (48yo)

      President & COO

      • Tenure: 5.4yrs
      • Compensation: US$11.41m
    • Austin Miller (55yo)

      Senior Vice President of Gaming Operations

      • Tenure: 6.4yrs
      • Compensation: US$1.56m
    • Chuck Kenyon

      Senior Vice President of Human Resources

      • Brad Blackwell

        Senior VP

        • Tenure: 2.8yrs
      • Ben Murr

        Senior VP & CTO

        • Tenure: 8yrs
      • Chad Dobson

        Chief Accounting Officer & VP

        • Nick Zangari

          Vice President of Treasury

          • Tenure: 2.5yrs

        Board Members

        • Douglas Grissom (52yo)

          Independent Director

          • Tenure: 2.5yrs
          • Compensation: US$219.88k
        • Thomas Meeker (75yo)

          Director Emeritus

          • Compensation: US$572.37k
        • Charles Bidwill (90yo)

          Director Emeritus

          • Tenure: 14.6yrs
        • G. Humphrey (74yo)

          Director Emeritus

          • Compensation: US$41.59k
        • Robert Fealy (67yo)

          Independent Director

          • Tenure: 20yrs
          • Compensation: US$234.38k
        • Ulysses Bridgeman (64yo)

          Independent Director

          • Tenure: 8yrs
          • Compensation: US$228.00k
        • Dan Harrington (63yo)

          Independent Director

          • Tenure: 22yrs
          • Compensation: US$266.50k
        • Bill Carstanjen (51yo)

          CEO & Director

          • Tenure: 5.4yrs
          • Compensation: US$21.12m
        • R. Rankin (64yo)

          Independent Chairman of the Board

          • Tenure: 1.8yrs
          • Compensation: US$374.02k
        • Karole Lloyd (60yo)

          Independent Director

          • Tenure: 1.8yrs
          • Compensation: US$184.51k

        Company Information

        Churchill Downs Incorporated's company bio, employee growth, exchange listings and data sources


        Key Information

        • Name: Churchill Downs Incorporated
        • Ticker: CHDN
        • Exchange: NasdaqGS
        • Founded: 1875
        • Industry: Casinos and Gaming
        • Sector: Consumer Services
        • Market Cap: US$5.622b
        • Shares outstanding: 39.30m
        • Website: https://www.churchilldownsincorporated.com

        Number of Employees


        Location

        • Churchill Downs Incorporated
        • 600 North Hurstbourne Parkway
        • Suite 400
        • Louisville
        • Kentucky
        • 40222
        • United States

        Listings

        TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
        CHDNNasdaqGS (Nasdaq Global Select)YesCommon StockUSUSDJan 1975
        CHRBST (Boerse-Stuttgart)YesCommon StockDEEURJan 1975
        CHRDB (Deutsche Boerse AG)YesCommon StockDEEURJan 1975

        Biography

        Churchill Downs Incorporated operates as a racing, gaming, and online entertainment company in the United States. It operates through Racing, Casinos, Online Wagering, and Other Investments and Corporate segments. The company operates 4 racetracks, including Churchill Downs Racetrack in Louisville, Kentucky; Arlington International Race Course in Arlington Heights with 12 off-track betting (OTB) facilities in Illinois; Fair Grounds Race Course in New Orleans along with 14 OTBs in Louisiana; and Calder Race Course in Miami Gardens, Florida. It also operates 7 casinos, which provides brick-and-mortar casino gaming services with approximately 9,500 gaming positions; and operates 3 hotels. In addition, the company through TwinSpires.com operates mobile and online wagering business; and a platform for betting on horseracing, as well as offers streaming video of live horse races, replays, and an assortment of racing and handicapping information. Further, it offers reports, statistical information, handicapping information, pedigrees, and other data for the thoroughbred horse industry through Brisnet.com and TwinSpires.com. Additionally, the company manufactures and operates pari-mutuel wagering systems for racetracks, OTBs, and other pari-mutuel wagering businesses; and provides totalisator and Internet-based interactive gaming services. Churchill Downs Incorporated was founded in 1875 and is headquartered in Louisville, Kentucky. 


        Company Analysis and Financial Data Status

        All financial data provided by Standard & Poor's Capital IQ.
        DataLast Updated (UTC time)
        Company Analysis2020/01/23 23:36
        End of Day Share Price2020/01/23 00:00
        Earnings2019/09/30
        Annual Earnings2018/12/31


        Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.