Churchill Story

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CHDN -- USA Stock  

USD 169.58  3.63  2.10%

While many traders are getting carried away by overanalyzing consumer cyclical space, it is reasonable to outline Churchill Downs Incorporated. What exactly are Churchill Downs shareholders getting in October? What is the firm valuation so far in 2020? We are going to cover Churchill Downs Inco perspective on valuation to give investors a better transparency on taking a position in it.
Published over three weeks ago
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Is Churchill Downs (NASDAQ:CHDN) ready for a correction?
The company currently holds 2.2 B in liabilities with Debt to Equity (D/E) ratio of 6.81, indicating Churchill Downs may have difficulties to generate enough cash to satisfy its financial obligations. On a scale of 0 to 100, Churchill Downs holds a performance score of 8. The firm shows a Beta (market volatility) of -0.5331, which signifies possible diversification benefits within a given portfolio. Let's try to break down what Churchill's beta means in this case. As returns on the market increase, returns on owning Churchill Downs are expected to decrease at a much lower rate. During the bear market, Churchill Downs is likely to outperform the market. Although it is vital to follow Churchill Downs Inco historical returns, it is good to be conservative about what you can do with the information regarding equity current trending patterns. The philosophy towards foreseeing future performance of any stock is to evaluate the business as a whole together with its past performance, including all available fundamental and technical indicators. By analyzing Churchill Downs Inco technical indicators, you can presently evaluate if the expected return of 0.44% will be sustainable into the future. Please makes use of Churchill Downs Inco semi variance, and the relationship between the maximum drawdown and accumulation distribution to make a quick decision on whether Churchill Downs price patterns will revert.
We determine the current worth of Churchill Downs Incorporated using both absolute as well as relative valuation methodologies to arrive at its intrinsic value. In general, an absolute valuation paradigm, as applied to this company, attempts to find the value of Churchill Downs Inco based exclusively on its fundamental and basic technical indicators. By analyzing Churchill Downs's financials, quarterly and monthly indicators, and related drivers such as dividends, operating cash flow, and various types of growth rates, we attempt to find the most accurate representation of Churchill Downs's intrinsic value. In some cases, mostly for established, large-cap companies, we also incorporate more traditional valuation methods such as dividend discount, discounted cash flow, or asset-based models. As compared to an absolute model, our relative valuation model uses a comparative analysis of Churchill Downs. We calculate exposure to Churchill Downs's market risk, different technical and fundamental indicators, relevant financial multiples and ratios, and then comparing them to Churchill Downs's related companies.

Churchill Downs Inco Investment Alerts

Churchill investment alerts and warnings help investors to get more proficient at understanding not only critical technical and fundamental signals but also the significant portfolio-centered indicators. These indicators include beta, alpha, and other risk-related measures that will help you in monitoring Churchill Downs Incorporated performance across your portfolios.Please check all investment alerts for Churchill

Churchill Downs Valuation Ratios as Compared to Competition

Our valuation model uses many indicators to compare Churchill value to that of its competitors to determine the firm's financial worth. You can analyze the relationship between different fundamental ratios across Churchill Downs competition to find correlations between indicators driving the intrinsic value of Churchill.

How Churchill utilizes its cash?

To perform a cash flow analysis of Churchill Downs, investors first need to understand how to read the cash flow statement. A cash flow statement shows the amount of cash Churchill Downs is receiving and how much cash it distributes out in a given period. The Churchill Downs cash flow statement breaks down these inflows and outflows into different buckets, including operating activities, investing activities, and financing activities. Churchill Downs Net Cash Flow from Operations is quite stable at the moment as compared to the past year. The company's current value of Net Cash Flow from Operations is estimated at 254.15 Million

Acquisition by Ulysses Bridgeman of tradable shares of Churchill Downs subject to Rule 16b-3

Legal trades by Churchill Downs insiders are very common, as founders, directors, or employees of any publicly traded firm often have stock or stock options. These trades are made public in the United States through the filing of Form 4 of the Securities and Exchange Commission. Below entry was recorded recently and is publicly available as an insider trade:
Churchill insider trading alert for grant of common stock by Ulysses Bridgeman, the corporate stakeholder, on 2nd of October 2020. This event was filed by Churchill Downs Inc with SEC on 2020-10-02. Statement of changes in beneficial ownership - SEC Form 4 [view details]   
Note, although insider trading is legal, in the United States, Canada, Australia, and Germany, for mandatory reporting purposes, corporate insiders are defined as a company's officers, directors, and any beneficial owners of more than 10% of a class of the company's equity securities.

Is Churchill Downs valued adequately by the market?

Churchill Downs Inco reported the previous year's revenue of 1.02 B. Net Loss for the year was (26.4 M) with profit before overhead, payroll, taxes, and interest of 343 M.
 2017 2018 2019 2020 (projected)
Long Term Debt to Equity1.761.862.893.12
Interest Coverage2.964.713.043.12

Margins Breakdown

Churchill profit margins show the degree to which it makes money. Margin indicators are used not only by investors but also by creditors or Churchill Downs itself as indicators of financial health and management effectiveness. Please look more closely at the different varieties of Churchill Downs profit margins.
Operating Margin13.91
EBITDA Margin0.3
Gross Margin0.27
Profit Margin0.12


Churchill Downs Earnings Before Interest Taxes and Depreciation Amortization USD is quite stable at the moment. Further, Churchill Downs Revenue Per Employee is quite stable at the moment. Churchill Downs Earnings Before Interest Taxes and Depreciation Amortization USD is increasing over the last 8 years. The latest value of Churchill Downs Earnings Before Interest Taxes and Depreciation Amortization USD is 323,070,895. Further, Churchill Downs Revenue Per Employee is quite stable at the moment.

Churchill Downs implied volatility may change after the rise

Semi variance is down to 5.91. It may entail a possible volatility slide. Churchill Downs Incorporated currently demonstrates below-verage downside deviation. It has Information Ratio of 0.1 and Jensen Alpha of 0.34. However, we do advice investors to further question Churchill Downs Incorporated expected returns to ensure all indicators are consistent with the current outlook about its relatively low value at risk.

Our Conclusion on Churchill Downs

Whereas few other entities within the gambling industry are still a little expensive, even after the recent corrections, Churchill Downs may offer a potential longer-term growth to institutional investors. While some next month oriented institutional investors may not share our view, we believe it may not be a good time to buy new shares of Churchill.

About Contributor

This story should be regarded as informational only and should not be considered a solicitation to sell or buy any financial products. Macroaxis does not express any opinion as to the present or future value of any investments referred to in this post. This post may not be reproduced without the consent of Macroaxis LLC. Macroaxis LLC and Ellen Johnson do not own shares of Churchill Downs Incorporated. Please refer to our Terms of Use for any information regarding our disclosure principles.

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