Is CHDN a good stock to buy? We came across a bullish thesis on Churchill Downs Incorporated on MaxDividends’s Substack by Serhio MaxDividends. In this article, we will summarize the bulls’ thesis on CHDN. Churchill Downs Incorporated’s share was trading at $83.98 as of June 25th. CHDN’s trailing P/E was 15.47 according to Yahoo Finance.
Churchill Downs Incorporated is a Louisville-based racing and gaming company operating the Kentucky Derby venue, HRM gaming venues in Kentucky and Virginia, and the TwinSpires wagering platform, evolving from its 1875 origins into a vertically integrated gaming platform generating $2.9 billion in trailing revenue. It carries a Financial Score of 86/99 and reported Q1 2026 revenue of $663 million, up 3.2%, Adjusted EBITDA of $257 million at 38.8% margins, and EPS of $1.21, beating estimates by 20%, while cash generation supported debt reduction.
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Capital returns remain conservative with a $0.44 annual dividend, 0.52% yield, 8.15% payout ratio, and 15 years of consecutive dividend increases, supported by a 41% five-year dividend growth rate and significant reinvestment flexibility. Growth is driven by HRM expansion and Derby-related upside, with the 2026 NBC renewal, sponsorship gains, and wagering growth adding $15–20 million in EBITDA, while the Victory Run expansion through 2028 increases premium capacity and monetization.
The Kentucky Derby remains a structural moat, run annually since 1875 without interruption and delivering the highest U.S. sports TV ratings in 2025, reinforcing pricing power across sponsorships, media rights, and wagering demand. Churchill Downs presents a compounding growth profile supported by expanding HRM scale, cash generation, and disciplined capital allocation, with potential rerating as leverage normalizes. Key risks include HRM regulatory uncertainty, elevated leverage from ongoing investments, and regional gaming competition, partially offset by strong brand equity and resilient cash generation.
Previously, we covered a bullish thesis on MGM Resorts International (MGM) by David in April 2025, which highlighted undervaluation, resilient cash flows, asset-light restructuring, global gaming exposure, and aggressive buybacks as key drivers. MGM’s stock price has appreciated by approximately 79.46% since our coverage. Serhio MaxDividends shares a similar view but emphasizes Churchill Downs’ HRM-led expansion, Kentucky Derby structural moat, and steady dividend growth with disciplined capital allocation and EBITDA expansion.
Churchill Downs Incorporated is not on our list of the 40 Most Popular Stocks Among Hedge Funds. As per our database, 52 hedge fund portfolios held CHDN at the end of the first quarter which was 50 in the previous quarter. While we acknowledge the risk and potential of CHDN as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than CHDN and that has 10,000% upside potential, check out our report about this cheapest AI stock.
Disclosure: None.
