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Should You Buy Churchill Downs (CHDN) Ahead of the Kentucky Derby?

Based in Louisville, Kentucky, Churchill Downs, Inc. CHDN is one of the most famous names in horseracing. It has several race tracks and betting facilities across the country, but is well-known for hosting the annual Kentucky Derby, a Grade 1 stakes race that caps the two-week-long Kentucky Derby Festival.

Churchill Downs has a market cap of $2.13 billion, and it distributes a 0.90% dividend. With a beta of 0.93, its stock is less volatile than the market. Stocks with betas less than one may help your portfolio minimize its exposure to market volatility.

The company has solid year-over-year growth estimates for its current quarter and current year, with CHDN projected to increase 21.72% and 48.13%, respectively. Churchill Downs looks like its heading in the right direction, but its surprise percentage for its historical reported earnings has seen more red than green. The company has only beaten estimates one out of the past four trailing quarters, with an average surprise of -26.63%.

CHDN has received two negative revisions for the current quarter and three negative revisions for the current year from financial analysts over the last 30 days. Our current consensus estimates for each period are $3.77 per share and $5.41 per share, respectively, each trending downward over the same time frame.

Check out CHDN's performance in comparison to its peers over the past three months:

Bottom Line

Churchill Downs is a Zacks Rank #3 (Hold), and its industry, Gaming, sits in the top 43% of all 265 industries ranked on the Zacks Industry Rank. It has an earnings ESP (expected Surprise Prediction) of 12.47%. When a company has a positive ESP in addition to a Zacks Rank #3 (Hold) or better, it has close to an 80% chance in meeting or beating our EPS consensus estimate.  However, with its downward estimate revision activity and recent downgrade, it may be safer to wait to invest in Churchill Downs.

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CHURCHILL DOWNS (CHDN): Free Stock Analysis Report
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