Churchill Downs Reports Q4 Earnings Miss Amid Revenue Growth
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Feb 26 2026
0mins
Source: seekingalpha
Churchill Downs Inc's stock fell 10.24% as it hit a 20-day low amid broader market declines, with the Nasdaq-100 down 1.83% and the S&P 500 down 1.14%.
The company's Q4 earnings report revealed a non-GAAP EPS of $0.97, missing expectations by $0.06, which may raise concerns about profitability and investor confidence. However, revenue grew to $665.9 million, a 6.7% year-over-year increase, indicating strong performance in historical racing and sports betting. Analysts are cautious about the company's outlook, suggesting that while revenue growth is promising, the EPS miss could impact future investor sentiment.
Despite the earnings miss, the revenue growth may provide a foundation for future capital expenditures, and investors might consider entering at lower prices while awaiting potential returns.
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Analyst Views on CHDN
Wall Street analysts forecast CHDN stock price to rise
7 Analyst Rating
7 Buy
0 Hold
0 Sell
Strong Buy
Current: 88.430
Low
125.00
Averages
137.33
High
146.00
Current: 88.430
Low
125.00
Averages
137.33
High
146.00
About CHDN
Churchill Downs Incorporated is a racing, online wagering and gaming entertainment company, which is anchored by its flagship event, the Kentucky Derby. The Company operates through three reportable segments: Live and Historical Racing, Wagering Services and Solutions, and Gaming. The Live and Historical Racing segment includes live and historical pari-mutuel racing at Churchill Downs Racetrack and its historical racing properties in Kentucky, Virginia and New Hampshire. The Wagering Services and Solutions segment includes TwinSpires, which is a retail and online sports betting business; United Tote Company, which manufactures and operates pari-mutuel wagering systems for racetracks, off-track betting facilities (OTBs), and other pari-mutuel wagering businesses; and Exacta Systems, LLC that provides central determinant system technology in historical racing machine (HRMs) across the country. The Gaming segment is engaged in the casino properties and associated racetrack facilities.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Market Performance Review: In Q1 2026, the Meridian Growth Fund reported a return of -7.90%, significantly trailing the Russell 2500 Growth Index's -3.52%, primarily due to poor industry allocation, although stock selection positively contributed to performance.
- Industry Dynamics Analysis: Initial optimism from domestic company confidence and Federal Reserve easing quickly faded due to trade policy uncertainties and military strikes against Iran, leading to a downturn in overall market sentiment.
- Churchill Downs Investment Outlook: The Meridian Growth Fund highlighted Churchill Downs Incorporated (NASDAQ:CHDN) as a diversified gaming and entertainment company, owning the prestigious Kentucky Derby, and is expected to unlock significant value through a potential divestiture of its regional casino assets.
- Hedge Fund Holding Changes: The number of hedge funds holding Churchill Downs increased from 45 to 50 by the end of Q4 2026, indicating sustained market interest, despite the stock's 16.06% decline over the past month.
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- Kentucky Derby Performance: During Derby week, Churchill Downs achieved a record all-sources handle of $487 million, indicating significant future growth potential and reinforcing the company's leadership in the horse racing industry.
- Impact of Brand Acquisition: Analysts noted that Churchill Downs' acquisition of the Preakness brand provides greater leverage for expanding the 'Triple Crown' in international markets, especially given the decline in Preakness participation over the past five years due to safety concerns, highlighting the need for strategic adjustments.
- Positive Rating and Price Target: Susquehanna maintains a positive rating on Churchill Downs with a price target of $121, representing over 30% upside potential, reflecting market optimism regarding the company's future performance.
- Stock Price Volatility Context: Despite a 19% year-to-date decline in Churchill Downs' stock price, analysts believe that strong event performance and brand expansion strategies will yield long-term returns for shareholders, boosting investor confidence.
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- Absence from Prediction Markets: Despite being the largest horse race in the U.S., the Kentucky Derby lacks event contracts on major prediction platforms like Kalshi and Polymarket, indicating a limited appeal of horse racing in prediction markets that could impact economic activities related to the event.
- Track Owners' Stance: Churchill Downs CEO Bill Carstanjen stated that horse racing is unlikely to appear on prediction markets as track owners are not interested in making deals with these platforms, potentially limiting the market expansion opportunities for horse racing.
- Legal Restrictions: Under the Interstate Horseracing Act of 1978, offering wagers on horse races requires explicit permission from track owners and state racing commissions, placing the prediction market industry at a legal disadvantage and restricting its growth.
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- Market Performance Review: In Q1 2026, the Meridian Growth Fund reported a return of -7.90%, significantly trailing the Russell 2500 Growth Index's -3.52%, primarily due to poor industry allocation, although stock selection positively contributed to performance.
- Industry Dynamics Analysis: Initial optimism from domestic company confidence and Federal Reserve easing quickly faded due to trade policy uncertainties and military strikes against Iran, leading to a downturn in overall market sentiment.
- Churchill Downs Investment Outlook: The Meridian Growth Fund highlighted Churchill Downs Incorporated (NASDAQ:CHDN) as a diversified gaming and entertainment company, owning the prestigious Kentucky Derby, and is expected to unlock significant value through a potential divestiture of its regional casino assets.
- Hedge Fund Holding Changes: The number of hedge funds holding Churchill Downs increased from 45 to 50 by the end of Q4 2026, indicating sustained market interest, despite the stock's 16.06% decline over the past month.
See More
Susquehanna Reiterates Bullish Stance on Churchill Downs Following Kentucky Derby Success
- Kentucky Derby Performance: During Derby week, Churchill Downs achieved a record all-sources handle of $487 million, indicating significant future growth potential and reinforcing the company's leadership in the horse racing industry.
- Impact of Brand Acquisition: Analysts noted that Churchill Downs' acquisition of the Preakness brand provides greater leverage for expanding the 'Triple Crown' in international markets, especially given the decline in Preakness participation over the past five years due to safety concerns, highlighting the need for strategic adjustments.
- Positive Rating and Price Target: Susquehanna maintains a positive rating on Churchill Downs with a price target of $121, representing over 30% upside potential, reflecting market optimism regarding the company's future performance.
- Stock Price Volatility Context: Despite a 19% year-to-date decline in Churchill Downs' stock price, analysts believe that strong event performance and brand expansion strategies will yield long-term returns for shareholders, boosting investor confidence.
See More
Churchill Downs Sets New Betting Records for Derby Week
- Record Total Handle: Churchill Downs reported that all-sources handle for Derby Week reached a new high of $487 million, reflecting a 3% increase from last year's record, indicating sustained interest in the event.
- Derby Day Wagering: Although wagering from all sources on Kentucky Derby Day was $340 million, slightly below last year's record of $349 million, it still demonstrates strong market demand and the event's consistent popularity.
- TwinSpires Handle Growth: TwinSpires recorded a handle of $129 million during Derby Week, up 6% from the previous record set in 2025, showcasing its growing competitiveness in the betting market.
- EBITDA Expectations Update: The company anticipates record-setting adjusted EBITDA for Derby Week, expected to be $15 million to $18 million higher than last year's figure, although slightly below the previous guidance range, indicating ongoing profitability improvements.
See More
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- Historic Victory: Golden Tempo won the 152nd Kentucky Derby at 23-1 odds, marking the first time a female trainer, Cherie DeVaux, has led a Derby winner, highlighting the growing influence of women in the horse racing industry.
- Record Attendance: The event attracted over 150,000 fans, underscoring the enduring appeal and brand value of the Kentucky Derby, which solidifies its status as a premier event in American horse racing.
- Record Betting Volume: Total handle for Derby Week reached $487 million, an increase of $13 million from last year, indicating strong market enthusiasm for horse racing and signs of economic recovery, which is expected to drive future revenue growth for the company.
- Adjusted EBITDA Expectations: The company anticipates an Adjusted EBITDA growth of $15 to $18 million for Derby Week, reflecting the financial benefits of the event's success and enhancing investor confidence in the company's prospects.
See More
Kentucky Oaks Sets New Wagering Records Amid Spectacular Race
- Event Highlights: Always A Runner won the 152nd Kentucky Oaks in 1:48.82, captivating over 103,000 fans, which underscores the event's immense appeal and brand significance.
- Wagering Records: Total wagering reached $89 million, an 18% increase from 2024, with the Kentucky Oaks race alone generating over $29 million, marking an all-time high and reflecting the event's growing popularity.
- Partner Performance: TwinSpires, the official betting partner, recorded $24 million in wagers, up 24% from last year, further solidifying its leadership position in the horse racing betting market.
- Charitable Initiatives: Through the Oaks, CDI champions women's health initiatives, raising nearly $2 million for advocacy, demonstrating the company's commitment to social responsibility while enhancing its brand image.
See More
Kentucky Derby Absent from Prediction Markets
- Absence from Prediction Markets: Despite being the largest horse race in the U.S., the Kentucky Derby lacks event contracts on major prediction platforms like Kalshi and Polymarket, indicating a limited appeal of horse racing in prediction markets that could impact economic activities related to the event.
- Track Owners' Stance: Churchill Downs CEO Bill Carstanjen stated that horse racing is unlikely to appear on prediction markets as track owners are not interested in making deals with these platforms, potentially limiting the market expansion opportunities for horse racing.
- Legal Restrictions: Under the Interstate Horseracing Act of 1978, offering wagers on horse races requires explicit permission from track owners and state racing commissions, placing the prediction market industry at a legal disadvantage and restricting its growth.
- Kentucky Legislative Actions: Kentucky lawmakers have proposed legislation to ban any gambling licensees from offering predictions and suggested a 17.5% tax on prediction market fees, which could further suppress the development of prediction markets in the state.
See More
