What Is Churchill Downs Incorporated's (NASDAQ:CHDN) Share Price Doing?

By
Simply Wall St
Published
July 29, 2021
NasdaqGS:CHDN
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Churchill Downs Incorporated (NASDAQ:CHDN), might not be a large cap stock, but it saw significant share price movement during recent months on the NASDAQGS, rising to highs of US$220 and falling to the lows of US$177. Some share price movements can give investors a better opportunity to enter into the stock, and potentially buy at a lower price. A question to answer is whether Churchill Downs' current trading price of US$188 reflective of the actual value of the mid-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at Churchill Downs’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.

View our latest analysis for Churchill Downs

What is Churchill Downs worth?

Good news, investors! Churchill Downs is still a bargain right now. According to my valuation, the intrinsic value for the stock is $245.66, but it is currently trading at US$188 on the share market, meaning that there is still an opportunity to buy now. What’s more interesting is that, Churchill Downs’s share price is quite volatile, which gives us more chances to buy since the share price could sink lower (or rise higher) in the future. This is based on its high beta, which is a good indicator for how much the stock moves relative to the rest of the market.

What kind of growth will Churchill Downs generate?

earnings-and-revenue-growth
NasdaqGS:CHDN Earnings and Revenue Growth July 29th 2021

Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. Buying a great company with a robust outlook at a cheap price is always a good investment, so let’s also take a look at the company's future expectations. In Churchill Downs' case, its earnings over the next year are expected to double, indicating an incredibly optimistic future ahead. This should lead to stronger cash flows, feeding into a higher share value.

What this means for you:

Are you a shareholder? Since CHDN is currently undervalued, it may be a great time to accumulate more of your holdings in the stock. With a positive outlook on the horizon, it seems like this growth has not yet been fully factored into the share price. However, there are also other factors such as financial health to consider, which could explain the current undervaluation.

Are you a potential investor? If you’ve been keeping an eye on CHDN for a while, now might be the time to enter the stock. Its buoyant future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy CHDN. But before you make any investment decisions, consider other factors such as the strength of its balance sheet, in order to make a well-informed buy.

If you'd like to know more about Churchill Downs as a business, it's important to be aware of any risks it's facing. At Simply Wall St, we found 1 warning sign for Churchill Downs and we think they deserve your attention.

If you are no longer interested in Churchill Downs, you can use our free platform to see our list of over 50 other stocks with a high growth potential.

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This article by Simply Wall St is general in nature. 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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