Kentucky Derby Expected to Drive Record Wagering and EBITDA Growth
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 1 hour ago
0mins
Should l Buy CHDN?
Source: seekingalpha
- Wagering Day Spectacle: The 152nd Kentucky Derby on May 2 is anticipated to be the largest single wagering day in North American horse racing, with last year's on-track attendance at 147,406, which, despite a decline from the previous year, remains one of the largest live sports crowds in the U.S.
- Wagering Growth: The all-sources wagering handle for the 2025 Derby reached approximately $335 million, with the combined Derby-Oaks handle nearing $410 million, both reflecting modest year-over-year growth and continuing the event's long-term upward trajectory in betting activity and monetization.
- EBITDA Expectations: Churchill Downs (CHDN) has guided for an adjusted EBITDA improvement of $15 million to $20 million from a year ago, which Jefferies analyst David Katz views as achievable, especially with some upside already secured through the NBC broadcast contract renewal.
- Favorable Weather Impact: The weather forecast for Louisville on Saturday is very favorable, which could boost traffic throughout the race-packed day, and Katz believes that if the adjusted EBITDA boost from the Derby exceeds $20 million, CHDN shares will respond positively.
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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: 100.990
Low
125.00
Averages
137.33
High
146.00
Current: 100.990
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.
Kentucky Derby Expected to Drive Record Wagering and EBITDA Growth
- Wagering Day Spectacle: The 152nd Kentucky Derby on May 2 is anticipated to be the largest single wagering day in North American horse racing, with last year's on-track attendance at 147,406, which, despite a decline from the previous year, remains one of the largest live sports crowds in the U.S.
- Wagering Growth: The all-sources wagering handle for the 2025 Derby reached approximately $335 million, with the combined Derby-Oaks handle nearing $410 million, both reflecting modest year-over-year growth and continuing the event's long-term upward trajectory in betting activity and monetization.
- EBITDA Expectations: Churchill Downs (CHDN) has guided for an adjusted EBITDA improvement of $15 million to $20 million from a year ago, which Jefferies analyst David Katz views as achievable, especially with some upside already secured through the NBC broadcast contract renewal.
- Favorable Weather Impact: The weather forecast for Louisville on Saturday is very favorable, which could boost traffic throughout the race-packed day, and Katz believes that if the adjusted EBITDA boost from the Derby exceeds $20 million, CHDN shares will respond positively.
See More
Churchill Downs Q1 Earnings Exceed Expectations, Shares Surge
- Earnings Beat: Churchill Downs reported adjusted earnings of $1.21 per share for Q1, exceeding Wall Street's expectations of $1.00 by 20.4%, indicating strong profitability growth.
- Stable Revenue Growth: The company's revenue rose 3.2% year-over-year to $663 million, meeting consensus estimates, which reflects the stability of its core business and ongoing market demand.
- Cash Flow Improvement: The free cash flow margin increased significantly from 25.9% in the same quarter last year to 38.5%, showcasing enhanced cash generation capabilities that bolster investor confidence.
- Positive Stock Reaction: Despite a 14.8% decline in stock price year-to-date, the 7.8% increase today indicates a positive market reaction to the earnings report, although the overall volatility remains low.
See More
Kentucky Derby Enhances Brand Activations for Fan Experience
- Brand Collaboration Expansion: The Kentucky Derby will feature L’Oréal Paris as its first beauty partner, alongside new activations from brands like Graeter’s, Hallmark, and Mitsubishi Electric, aiming to enhance fan interaction through diverse brand experiences.
- Enhanced Audience Engagement: The event will create memorable touchpoints from gate entry to the final race, blending tradition with modernity, which is expected to attract more attendees and elevate the overall spectator experience.
- Betting Growth Trend: The total wagering handle for the 2025 Derby reached approximately $335 million, with the combined Derby-Oaks handle nearing $410 million, reflecting modest year-over-year growth and indicating a long-term upward trajectory in betting activity and monetization.
- Strong Financial Performance: Churchill Downs (CHDN) reported a non-GAAP EPS of $1.21, beating estimates by $0.21, with revenue of $663 million exceeding expectations by $1.37 million, leading to an 8.2% increase in share price during after-hours trading.
See More
Churchill Downs Reports Record Q1 2026 Earnings and Strategic Acquisitions
- Record Revenue: Churchill Downs achieved record net revenues of $663 million and adjusted EBITDA of $257 million in Q1 2026, indicating strong market performance and reflecting the company's ongoing growth potential in the racing and wagering services sectors.
- Acquisition Strategy: The company signed an agreement to acquire the intellectual property rights to the Preakness Stakes and Black-Eyed Susan Stakes, which is expected to become the second most wagered race in the U.S., further enhancing brand value and market share.
- Derby Week Outlook: Management expressed confidence in achieving $15 million to $20 million in revenue growth during the upcoming Derby Week, surpassing last year's performance, showcasing the company's strategic focus on high-end customer engagement and sponsorships.
- New Technology Introduction: Churchill introduced electronic table games based on historical horse races at six of its HRM properties in Kentucky, with early positive feedback expected to boost overall gaming revenue, demonstrating the company's ongoing efforts in innovation and market adaptability.
See More
Analysis of Significant Stock Movements Among Companies
- Netflix Buyback Plan: Netflix authorized an additional $25 billion share buyback, leading to a stock price increase of over 1%, aimed at boosting shareholder confidence and enhancing long-term company value.
- Helix Merger Announcement: Helix Energy Solutions agreed to merge with Hornbeck Offshore Services in an all-stock deal, resulting in a more than 3% rise in stock price, with the merger expected to close in the second half of 2026, enhancing competitive positioning in the offshore services market.
- Honeywell Mixed Earnings: Honeywell reported Q1 adjusted earnings of $2.45 per share, beating expectations, but revenue of $9.1 billion fell short of forecasts, causing a 5.6% drop in stock price, reflecting market concerns over its future guidance.
- Mobileye Strong Performance: Mobileye reported Q1 adjusted earnings of 12 cents per share on revenue of $558 million, both exceeding analyst expectations, resulting in an 11% stock price increase, indicating robust growth potential in the autonomous driving sector.
See More
IBM Fails to Raise Full-Year Guidance, Shares Drop
- IBM Earnings Miss: IBM reported Q1 earnings of $1.91 per share, beating the $1.81 forecast, yet failed to raise its full-year guidance, resulting in a 6% drop in shares, indicating market concerns over future growth prospects.
- Tesla's Mixed Results: Tesla's Q1 adjusted earnings were 41 cents per share, surpassing the 37 cents expected by analysts, but its revenue of $22.39 billion fell short of the $22.64 billion consensus, reflecting cautious market sentiment regarding sales growth.
- Texas Instruments Strong Outlook: Texas Instruments forecasts current-quarter earnings between $1.77 and $2.05 per share, significantly above the $1.57 consensus, leading to a 10% increase in shares, showcasing robust demand in the semiconductor sector.
- United Rentals Sales Forecast Boost: United Rentals raised its full-year sales forecast to a range of $16.9 billion to $17.4 billion, with shares jumping over 15%, indicating strong market momentum heading into the busy season.
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Kentucky Derby Expected to Drive Record Wagering and EBITDA Growth
- Wagering Day Spectacle: The 152nd Kentucky Derby on May 2 is anticipated to be the largest single wagering day in North American horse racing, with last year's on-track attendance at 147,406, which, despite a decline from the previous year, remains one of the largest live sports crowds in the U.S.
- Wagering Growth: The all-sources wagering handle for the 2025 Derby reached approximately $335 million, with the combined Derby-Oaks handle nearing $410 million, both reflecting modest year-over-year growth and continuing the event's long-term upward trajectory in betting activity and monetization.
- EBITDA Expectations: Churchill Downs (CHDN) has guided for an adjusted EBITDA improvement of $15 million to $20 million from a year ago, which Jefferies analyst David Katz views as achievable, especially with some upside already secured through the NBC broadcast contract renewal.
- Favorable Weather Impact: The weather forecast for Louisville on Saturday is very favorable, which could boost traffic throughout the race-packed day, and Katz believes that if the adjusted EBITDA boost from the Derby exceeds $20 million, CHDN shares will respond positively.
See More
Churchill Downs Q1 Earnings Exceed Expectations, Shares Surge
- Earnings Beat: Churchill Downs reported adjusted earnings of $1.21 per share for Q1, exceeding Wall Street's expectations of $1.00 by 20.4%, indicating strong profitability growth.
- Stable Revenue Growth: The company's revenue rose 3.2% year-over-year to $663 million, meeting consensus estimates, which reflects the stability of its core business and ongoing market demand.
- Cash Flow Improvement: The free cash flow margin increased significantly from 25.9% in the same quarter last year to 38.5%, showcasing enhanced cash generation capabilities that bolster investor confidence.
- Positive Stock Reaction: Despite a 14.8% decline in stock price year-to-date, the 7.8% increase today indicates a positive market reaction to the earnings report, although the overall volatility remains low.
See More
Kentucky Derby Enhances Brand Activations for Fan Experience
- Brand Collaboration Expansion: The Kentucky Derby will feature L’Oréal Paris as its first beauty partner, alongside new activations from brands like Graeter’s, Hallmark, and Mitsubishi Electric, aiming to enhance fan interaction through diverse brand experiences.
- Enhanced Audience Engagement: The event will create memorable touchpoints from gate entry to the final race, blending tradition with modernity, which is expected to attract more attendees and elevate the overall spectator experience.
- Betting Growth Trend: The total wagering handle for the 2025 Derby reached approximately $335 million, with the combined Derby-Oaks handle nearing $410 million, reflecting modest year-over-year growth and indicating a long-term upward trajectory in betting activity and monetization.
- Strong Financial Performance: Churchill Downs (CHDN) reported a non-GAAP EPS of $1.21, beating estimates by $0.21, with revenue of $663 million exceeding expectations by $1.37 million, leading to an 8.2% increase in share price during after-hours trading.
See More
Churchill Downs Reports Record Q1 2026 Earnings and Strategic Acquisitions
- Record Revenue: Churchill Downs achieved record net revenues of $663 million and adjusted EBITDA of $257 million in Q1 2026, indicating strong market performance and reflecting the company's ongoing growth potential in the racing and wagering services sectors.
- Acquisition Strategy: The company signed an agreement to acquire the intellectual property rights to the Preakness Stakes and Black-Eyed Susan Stakes, which is expected to become the second most wagered race in the U.S., further enhancing brand value and market share.
- Derby Week Outlook: Management expressed confidence in achieving $15 million to $20 million in revenue growth during the upcoming Derby Week, surpassing last year's performance, showcasing the company's strategic focus on high-end customer engagement and sponsorships.
- New Technology Introduction: Churchill introduced electronic table games based on historical horse races at six of its HRM properties in Kentucky, with early positive feedback expected to boost overall gaming revenue, demonstrating the company's ongoing efforts in innovation and market adaptability.
See More
Analysis of Significant Stock Movements Among Companies
- Netflix Buyback Plan: Netflix authorized an additional $25 billion share buyback, leading to a stock price increase of over 1%, aimed at boosting shareholder confidence and enhancing long-term company value.
- Helix Merger Announcement: Helix Energy Solutions agreed to merge with Hornbeck Offshore Services in an all-stock deal, resulting in a more than 3% rise in stock price, with the merger expected to close in the second half of 2026, enhancing competitive positioning in the offshore services market.
- Honeywell Mixed Earnings: Honeywell reported Q1 adjusted earnings of $2.45 per share, beating expectations, but revenue of $9.1 billion fell short of forecasts, causing a 5.6% drop in stock price, reflecting market concerns over its future guidance.
- Mobileye Strong Performance: Mobileye reported Q1 adjusted earnings of 12 cents per share on revenue of $558 million, both exceeding analyst expectations, resulting in an 11% stock price increase, indicating robust growth potential in the autonomous driving sector.
See More
IBM Fails to Raise Full-Year Guidance, Shares Drop
- IBM Earnings Miss: IBM reported Q1 earnings of $1.91 per share, beating the $1.81 forecast, yet failed to raise its full-year guidance, resulting in a 6% drop in shares, indicating market concerns over future growth prospects.
- Tesla's Mixed Results: Tesla's Q1 adjusted earnings were 41 cents per share, surpassing the 37 cents expected by analysts, but its revenue of $22.39 billion fell short of the $22.64 billion consensus, reflecting cautious market sentiment regarding sales growth.
- Texas Instruments Strong Outlook: Texas Instruments forecasts current-quarter earnings between $1.77 and $2.05 per share, significantly above the $1.57 consensus, leading to a 10% increase in shares, showcasing robust demand in the semiconductor sector.
- United Rentals Sales Forecast Boost: United Rentals raised its full-year sales forecast to a range of $16.9 billion to $17.4 billion, with shares jumping over 15%, indicating strong market momentum heading into the busy season.
See More
