Churchill Downs (CHDN): Assessing Valuation Following Record Earnings and Kentucky Derby Growth Momentum

Churchill Downs (CHDN) delivered record net revenue and adjusted EBITDA in its third quarter, driven by a surge in its Live and Historical Racing segment as well as momentum from the Kentucky Derby.

See our latest analysis for Churchill Downs.

Churchill Downs’ share price has rebounded sharply in the last week, up over 11% following upbeat results. However, it remains down around 23% year-to-date and has delivered a disappointing -28% total shareholder return over the past year. Recent buybacks, a premium expansion project, and a boosted dividend signal management’s ongoing confidence. Despite this, lingering volatility and a recently filed class-action lawsuit have kept the stock under pressure. Momentum is showing signs of a turnaround, but long-term investors will want to weigh the potential for recovery against ongoing legal and industry risks.

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With shares still trading nearly 27% below last year’s highs while recent earnings and growth projects signal momentum, investors must ask themselves whether Churchill Downs is undervalued or if the market has already priced in future gains.

Most Popular Narrative: 26.5% Undervalued

Churchill Downs closed at $101, but the most widely followed narrative calculates a fair value well above that mark. This suggests a meaningful gap and sets the stage for a debate about whether recent growth initiatives and digital expansion can justify a higher price.

Strategic reinvestment in premium Kentucky Derby experiences and selective venue upgrades, particularly expanding Derby Week with new hospitality offerings, international marketing, prime-time Oaks coverage, and enhanced digital content, should drive substantial step-function revenue growth, higher per-attendee pricing, and stronger sponsorship income in 2026 and subsequent years. These factors could support higher adjusted EBITDA and net margins.

Read the complete narrative.

Want to find out why analysts believe Churchill Downs could command a price many see as reserved for fast-growing tech stocks? The model behind this narrative spins a future of rising margins, increasing recurring revenues, and bold profit metrics that break the industry mold. Guess which key assumptions make the difference—click through and reveal what pushes this valuation so much higher.

Result: Fair Value of $137.45 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, persistent reliance on horse racing and the risk of shifting consumer preferences could present challenges to long-term growth assumptions in this narrative.

Find out about the key risks to this Churchill Downs narrative.

Build Your Own Churchill Downs Narrative

If you’ve got your own take on Churchill Downs’ outlook or want to see how the numbers stack up differently, you can easily shape your own view using the data in just a few minutes. Do it your way

A great starting point for your Churchill Downs research is our analysis highlighting 4 key rewards and 1 important warning sign that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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