Is CHDN a Buy? What to Consider in 2026
Last updated July 2026
Short answer
The bull case for Churchill Downs Incorporated (CHDN) rests on Historical racing machine expansion: HRM venues in Kentucky and Virginia have been the biggest driver of adjusted EBITDA growth, with new openings like Owensboro, Rosie's Richmond, Roseshire, and Marshall Yards adding capacity. Revenue (TTM) is ~$2.9B. If you believe that thesis holds, the real questions become position sizing and overlap, not timing. The main risk to that view: Churchill Downs carries substantial leverage, with net debt of roughly $4.9 billion and a debt-to-equity ratio well above peers, which magnifies both returns and downside as interest costs and maturities in 2027 and 2028 come due. Whether CHDN is a buy comes down to whether you believe the thesis. This is informational, not a recommendation, and Walnut is not an investment adviser.
Churchill Downs Incorporated operates through three reportable segments: Live and Historical Racing (the Churchill Downs Racetrack that hosts the Kentucky Derby plus Derby City Gaming and a growing fleet of historical racing machine, or HRM, venues in Kentucky and Virginia), Wagering Services and Solutions (the TwinSpires online horse-race wagering platform, the Exacta HRM technology business, and United Tote), and Gaming (regional casino and racetrack properties). The Kentucky Derby remains the crown jewel, generating record luxury ticket sales and TV audiences, while HRM parlors have become the primary growth engine as new venues open across Kentucky and Virginia. The investment picture is that of a capital-intensive, highly leveraged operator building durable local-monopoly gaming assets on top of a one-of-a-kind sporting franchise. In 2025 the company posted record net revenue of roughly $2.9 billion and net income near $383 million, and it opened Marshall Yards Racing and Gaming in early 2026 while agreeing to buy the Preakness and Black-Eyed Susan intellectual property for about $85 million. The bull case rests on continued HRM expansion and Derby pricing power, the bear case on a large debt load, rising interest costs, and sensitivity to discretionary consumer spending.
What's the case for buying CHDN?
1. Historical racing machine expansion
HRM venues in Kentucky and Virginia have been the biggest driver of adjusted EBITDA growth, with new openings like Owensboro, Rosie's Richmond, Roseshire, and Marshall Yards adding capacity. These are effectively local-monopoly gaming floors operating under pari-mutuel racing licenses, giving Churchill Downs a defensible regional footprint. Continued rollout supports the Live and Historical Racing segment, which reached roughly $1.44 billion of revenue in 2025.
2. Kentucky Derby franchise and pricing power
The Kentucky Derby is an irreplaceable event with record luxury ticket sales, sponsorship, and broadcast interest. Ongoing capital investment in premium seating and hospitality has steadily raised per-attendee spend. The 2026 agreement to acquire the Preakness and Black-Eyed Susan intellectual property deepens the company's ownership of marquee Triple Crown assets.
3. TwinSpires and wagering technology
The Wagering Services and Solutions segment, which includes TwinSpires online horse-race wagering and the Exacta HRM technology business, provides a scalable, higher-margin revenue stream tied to both its own venues and third-party operators. Growth here diversifies the model beyond bricks-and-mortar gaming and captures the shift toward online and mobile betting.
4. Regional gaming portfolio
The Gaming segment of casino and racetrack properties generated roughly $1.05 billion of revenue in 2025 and provides steady regional cash flow. Recent results showed near-flat gaming EBITDA, so the segment functions more as a stable base than a growth engine while HRM and racing carry the expansion story.
What are the risks to CHDN?
Churchill Downs carries substantial leverage, with net debt of roughly $4.9 billion and a debt-to-equity ratio well above peers, which magnifies both returns and downside as interest costs and maturities in 2027 and 2028 come due. The business is exposed to discretionary consumer spending, so a weaker economy could pressure gaming volumes and Derby-week spend. Large capital projects and acquisitions carry execution and financing risk, and regional gaming faces competition and potential regulatory or tax changes. HRM legality and expansion depend on state-by-state rules that could shift. Concentration in a single flagship event also means weather, safety, or reputational issues around the Derby carry outsized weight.
How is CHDN valued? (as of July 2026)
Snapshot for CHDN as of July 2026, sourced from Yahoo Finance and may be delayed. Valuation figures move with price and earnings; verify the current numbers with your broker before deciding.
- Revenue (TTM): ~$2.9B
- FY2025 net income: ~$383M
- Q1 2026 revenue: ~$663M (record)
- Q1 2026 adjusted EBITDA: ~$257M (record)
- Market cap: ~$5.8B
- P/E (approx): ~15-17x
Churchill Downs trades at a mid-teens earnings multiple after record Q1 2026 revenue of about $663 million and adjusted EBITDA near $257 million, with diluted EPS of $1.16. The valuation reflects steady growth alongside heavy leverage (net debt around $4.9 billion), so much of the equity story hinges on HRM expansion continuing to compound EBITDA faster than interest costs rise.
How do you decide if CHDN is a buy?
Rather than asking whether CHDN is a buy in the abstract, it tends to help to answer four questions:
- Thesis: do you believe the case above, and is it still true today?
- Time horizon: a single stock can be volatile, so a longer horizon absorbs more of the swings.
- Position sizing: a thesis can be right and the sizing still wrong; decide how much of your portfolio one name should be.
- Overlap: check whether you already hold CHDN indirectly through an index or sector ETF before adding more.
For the full picture, see the CHDN stock guide (what the company does, the ETFs that hold it, similar stocks, and the themes it fits). In Walnut you can ask its AI about CHDN against your real portfolio and see your actual exposure before deciding.
The bottom line on CHDN
The bottom line: Churchill Downs Incorporated's story right now is Historical racing machine expansion, with revenue (ttm) at ~$2.9B. If you believe that narrative continues, the call is about sizing CHDN sensibly and checking overlap with what you own; if you doubt it (the risk: churchill Downs carries substantial leverage, with net debt of roughly $4.9 billion and a debt-to-equity ratio well above peers, which magnifies both returns and downside as interest costs and maturities in 2027 and 2028 come due.), it is not for you. Decide from the thesis, not the ticker. Walnut is not an investment adviser.
Build a basket around CHDN with Walnut
Use Churchill Downs Incorporated as one constituent in a thematic basket Walnut's AI helps you assemble. Describe a thesis you believe in, the AI proposes the holdings and weights, and you approve before any broker order.
FAQ
Is CHDN a good stock to buy right now?
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The case for Churchill Downs Incorporated right now is Historical racing machine expansion, with revenue (ttm) at ~$2.9B. If you believe that thesis holds, CHDN is a way to own it and the real questions are sizing and overlap, not timing; the main risk to that view is churchill Downs carries substantial leverage, with net debt of roughly $4.9 billion and a debt-to-equity ratio well above peers, which magnifies both returns and downside as interest costs and maturities in 2027 and 2028 come due. So it comes down to whether you believe the thesis. Walnut is not an investment adviser and this is not a recommendation.
What does Churchill Downs Incorporated do?
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Churchill Downs Incorporated operates through three reportable segments: Live and Historical Racing (the Churchill Downs Racetrack that hosts the Kentucky Derby plus Derby City Gam
What are the main risks of CHDN?
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Churchill Downs carries substantial leverage, with net debt of roughly $4.9 billion and a debt-to-equity ratio well above peers, which magnifies both returns and downside as interest costs and maturities in 2027 and 2028 come due. The business is exposed to discretionary consumer spending, so a weaker economy could pressure gaming volumes and Derby-week spend. Large capital projects and acquisitions carry execution and financing risk, and regional gaming faces competition and potential regulatory or tax changes. HRM legality and expansion depend on state-by-state rules that could shift. Concentration in a single flagship event also means weather, safety, or reputational issues around the Derby carry outsized weight.
What does Churchill Downs do?
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Churchill Downs Incorporated runs live and historical horse racing (including the Kentucky Derby and historical racing machine venues), the TwinSpires online wagering platform and Exacta HRM technology business, and a portfolio of regional casinos. It is a gaming and entertainment company built around a famous racing franchise.
Is CHDN just the Kentucky Derby?
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No. The Kentucky Derby is the marquee asset, but most revenue comes from historical racing machine venues, regional casinos, and online wagering. In 2025 the company generated roughly $2.9 billion of total revenue across its three segments, of which the Derby is only one part.
How did Churchill Downs perform recently?
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In Q1 2026 the company reported record net revenue of about $663 million and record adjusted EBITDA near $257 million, with diluted EPS of $1.16. Growth was led by the Live and Historical Racing segment, while gaming revenue was roughly flat.
What is the historical racing machine (HRM) business?
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HRM venues are gaming floors operating under a pari-mutuel racing license, where machines pay out based on the results of previously run horse races. Churchill Downs has expanded HRM parlors across Kentucky and Virginia, and they have been the largest driver of recent EBITDA growth.
Walnut is informational and is not an investment adviser. This page is educational and not a recommendation to buy or sell CHDN; figures are approximate and dated, and your own situation, time horizon, and risk tolerance should drive any decision. Verify current data before investing.