Churchill Downs Inc (CHDN) Stock Analysis
Churchill Downs Inc (CHDN) Stock Analysis
Analysis from 10-Q filed 2025-10-22. Data as of Q4 2025.
Overall Grade: F (Concerning)
Churchill Downs Inc faces challenges in financial performance that warrant careful analysis.
| Metric | Value | Context |
|---|---|---|
| ROIC | 8.2% | Near cost of capital |
| FCF Margin | -9.4% | Cash flow pressure |
| Debt/Equity | 5.1x | Elevated debt |
Investment Thesis: Financial metrics indicate concerning business quality with areas requiring attention.
Explore Churchill Downs Inc: Earnings History | Filing Intelligence | ROIC Analysis
Profitability: Churchill Downs Inc earns 8.2% ROIC, Bottom 50% in Consumer Discretionary
Churchill Downs Inc's trailing-twelve-month ROIC of 8.2% ranks Bottom 50% in Consumer Discretionary companies (sector median: 8.8%), driven by NOPAT margin of 16.9% combined with asset turnover of 0.4x. Source: 10-Q filed 2025-10-22.
| Metric | CHDN | Rating | Context |
|---|---|---|---|
| Return on Invested Capital (ROIC) | 8.2% | Adequate | Below sector median of 8.8% |
| Return on Equity (ROE) | 36.2% | Excellent | Efficient use of shareholder equity |
| Operating Margin | 23.4% | Excellent | Efficient operations |
Cash Flow: Churchill Downs Inc generates $-274.9M FCF at -9.4% margin, positive NaN/8 quarters
Churchill Downs Inc generated $-274.9M in free cash flow (TTM), a -9.4% FCF margin. FCF was positive in N/A of the last 8 quarters. Source: 10-Q filed 2025-10-22.
| Metric | CHDN | Rating | Context |
|---|---|---|---|
| Free Cash Flow Margin | -9.4% | Red flag | Thin cash margins |
| Free Cash Flow (TTM) | $-274.9M | Red flag | Cash burn |
| FCF Consistency (8Q) | N/A | Warning | Variable cash flow |
Balance Sheet: Churchill Downs Inc at 5.1x leverage
Churchill Downs Inc's debt-to-equity ratio of 5.1x reflects high leverage. Total debt of $5.1B offset by $288.5M in cash. Source: 10-Q filed 2025-10-22.
| Metric | CHDN | Rating | Context |
|---|---|---|---|
| Debt to Equity | 5.1x | Red flag | Elevated leverage |
| Net Cash Position | $-4.8B | Warning | Net debt position |
Valuation: Churchill Downs Inc trades at 21.4x earnings
Churchill Downs Inc trades at a P/E of 21.4x. Free cash flow yield of -3.4% reflects market expectations for growth.
| Metric | CHDN | Rating | Context |
|---|---|---|---|
| P/E Ratio | 21.4x | Adequate | Premium valuation |
| EV/Sales | 4.4x | Good | Growth premium priced in |
| FCF Yield | -3.4% | Warning | Lower cash yield |
| Dividend Yield | 0.4% | Adequate | Growth focus over income |
Capital Allocation: Churchill Downs Inc returns 5.6% shareholder yield
Churchill Downs Inc's total shareholder yield is 5.6% (dividends 0.4% + buybacks 5.3%). Source: 10-Q filed 2025-10-22.
| Metric | CHDN | Rating | Context |
|---|---|---|---|
| Total Shareholder Yield | 5.6% | Good | Dividend + buyback yield combined |
| Buyback Yield | 5.3% | Good | Active share repurchases |
| Total Capital Returned (TTM) | $458.6M | Good | Dividends + buybacks returned to shareholders |
Sector Rankings
| Metric | Value | Percentile | vs Median |
|---|---|---|---|
| Return on Invested Capital (ROIC) | 8.2% | Bottom 50% | 0.9x below |
| Free Cash Flow Margin | -9.4% | Bottom 10% | -3.5x below |
| Operating Margin | 23.4% | Top 5% | 5.0x above |
| Return on Equity (ROE) | 36.2% | Top 25% | 3.5x above |
| P/E Ratio | 21.4x | N/A | - |
Financial Scorecard
| Metric | CHDN | Rating | Sector Context |
|---|---|---|---|
| Return on Invested Capital (ROIC) | 8.2% | Adequate | Bottom 50% of sector (median: 8.8%) |
| Free Cash Flow Margin | -9.4% | Red flag | Thin cash margins |
| Debt to Equity Ratio | 508.1% | Red flag | High financial leverage |
| P/E Ratio (Price-to-Earnings) | 21.4x | Adequate | Fair value |
| Free Cash Flow Yield | -3.4% | Red flag | Growth-focused valuation |
Frequently Asked Questions
Q: What is Churchill Downs Inc's Return on Invested Capital (ROIC)?
Churchill Downs Inc (CHDN) has a trailing twelve-month Return on Invested Capital (ROIC) of 8.2%. This compares below the sector median of 8.8%. An ROIC near 8-12% is approximately the cost of capital for most companies.
Q: What is Churchill Downs Inc's Free Cash Flow Margin?
Churchill Downs Inc (CHDN) has a free cash flow margin of -9.4%, generating $-274.9 million in free cash flow over the trailing twelve months. Negative free cash flow means the company is consuming cash, which may require financing.
Q: Is Churchill Downs Inc stock overvalued or undervalued?
Churchill Downs Inc (CHDN) trades at a P/E ratio of 21.4x, which is above the sector median of N/A. The EV/Sales multiple is 4.4x.
Q: Does Churchill Downs Inc pay a dividend?
Churchill Downs Inc (CHDN) currently pays a dividend yield of 0.4%. Including share buybacks, the total shareholder yield is 5.6%. The relatively low yield suggests the company prioritizes growth reinvestment over income distribution.
Q: How much debt does Churchill Downs Inc have?
Churchill Downs Inc (CHDN) has a debt-to-equity ratio of 5.1x with total debt of $5.1 billion. Net debt position is $4.8 billion.
Q: What is Churchill Downs Inc's revenue and earnings growth?
Churchill Downs Inc (CHDN) grew revenue by 7.0% year-over-year. Earnings per share decreased by 6.9% compared to the prior year. Modest growth indicates a mature business with stable demand.
Q: Is Churchill Downs Inc buying back stock?
Churchill Downs Inc (CHDN) repurchased $427.8 million of stock over the trailing twelve months. This represents a buyback yield of 5.3%.
Q: How does Churchill Downs Inc compare to competitors in Consumer Discretionary?
Compared to other companies in Consumer Discretionary, Churchill Downs Inc (CHDN) shows: ROIC of 8.2% is below the sector median of 8.8% (Bottom 48%). FCF margin of -9.4% trails the sector median of 2.7%. These rankings are based on MetricDuck's analysis of all Consumer Discretionary companies with available SEC filings.
Q: What warning signs should I watch for with Churchill Downs Inc?
Investors in Churchill Downs Inc (CHDN) should monitor these potential warning signs: 1) FCF margin is thin at -9.4%, leaving limited buffer for economic downturns. 2) ROIC has been declining, potentially signaling deteriorating competitive position. 3) Debt-to-equity of 5.1x is elevated. Regular monitoring of SEC filings and quarterly trends is recommended.
Data Source: Data sourced from 10-Q filed 2025-10-22. TTM metrics as of Q4 2025.
Methodology: Financial metrics calculated from SEC 10-K and 10-Q filings using standardized formulas. Sector comparisons use peer group based on SIC code.
Scope: This analysis covers SEC filing fundamentals — profitability, cash flow, balance sheet, and valuation metrics. For analyst estimates and price targets, consult sell-side research.
This analysis is for informational purposes only and does not constitute investment advice.