CHDN - Embedded Expectations Analysis - 2021 06 28
Churchill Downs Incorporated (CHDN:USA) currently trades above corporate averages relative to UAFRS-based (Uniform) earnings, with a 26.9x Uniform P/E. At these levels, the market is pricing in bullish expectations for the firm, but management may be concerned about long-term growth, their gaming partnerships, and EBITDA performanceSpecifically, management may be exaggerating their focus on long-term growth and shareholder value, potential EBITDA gains from the Kentucky Derby, and the customer acquisition cost benefits of their partnerships. Moreover, they may lack confidence in their ability to sustain record-high EBITDA across regional gaming properties, mitigate operating losses in the sports and online casino business, and retain online customers as brick-and-mortar restrictions ease. Additionally, management may have concerns about the potential of their equity investments, and they may lack confidence in their ability to invest in profitable growth opportunities and improve the monetization of the TwinSpires business
Churchill Downs is a racing, online wagering and gaming entertainment company. The company manages its operations through three reportable segments: Churchill Downs, Online Wagering, and Gaming. Churchill Downs includes live and historical pari-mutuel racing at Churchill Downs Racetrack and Derby City Gaming. Online Wagering includes the company's TwinSpires business and its online sports betting and iGaming business. Gaming includes casino properties and associated racetrack or jai alai facilities which support the casino license as applicable.
In 2009, just as the dust was settling from the last major equity and credit market crises, we launched a boutique research firm with the intention of breaking Wall Street’s biases and broken incentives:
- GAAP and IFRS have failed to provide rules for reliable financial statement reporting
- Stock analyst recommendations are not grounded in disciplined financial analysis
- Credit agencies have been set up to grossly fail in their responsibilities to investors and the public markets
- Utter lack of willingness of major research firms to employ the the most advanced forensic analysis available
We sought to provide investors and company analysts with a source of information that changed all that.
Many years later, our business model remains because little has changed on Wall Street.
- Corporate credit ratings remain years behind the fundamental underpinnings of company performance
- Stock analysts continue to make recommendations with deeply inherent biases
- Research firms have failed to break down the walls between credit, equity, and macroeconomic research
- The governing accounting bodies have created more leeway for mis-estimates and mis-classifications as financials have become unwieldy and overwhelming
The integrity of Valens Research is founded in our disciplined processes and analytics. No “star” analysts. No corporate advisory relationships. No-nonsense opinions and recommendations.
Unfortunately, this report is not available for the investor type or country you selected.
Browse all ResearchPool reportsReport is subscription only.
Thank you, your report is ready.
Thank you, your report is ready.