CHDN Should I Buy
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Churchill Downs Inc (CHDN) is not a strong buy at the moment for a beginner investor with a long-term strategy. While the company has shown some positive developments, such as record revenue in Q4 2025 and the opening of a new venue, the recent sharp price drop (-6% in regular trading) and mixed financial performance (declining net income and EPS despite revenue growth) suggest caution. Additionally, hedge funds are selling, and technical indicators do not provide a clear buy signal. For now, holding off on buying until more favorable conditions arise would be prudent.
The MACD is above 0 and positively contracting, indicating a potential weakening of bullish momentum. RSI is neutral at 35.359, and moving averages are converging, showing no clear trend. The stock is trading near its support level (S1: 87.415), but the recent sharp price drop (-6%) suggests caution.
Record net revenue and adjusted EBITDA in Q4
Opening of the Marshall Yards Racing & Gaming venue, expanding the company's footprint.
Positive sentiment from analysts, with raised price targets and buy/overweight ratings.
Recent acquisition of shares by Beck Bode, LLC, indicating confidence in the company's growth.
Significant price drop (-6%) in regular trading, with a further -2.23% in pre-market.
Declining net income (-29.36% YoY) and EPS (-25.26% YoY) in Q4 2025 despite revenue growth.
Hedge funds are selling, with a 115.46% increase in selling activity over the last quarter.
Mixed sentiment in the gaming sector, with concerns about stretched consumer spending and negative estimate revisions.
In Q4 2025, revenue increased by 6.68% YoY to $665.9 million, but net income dropped by 29.36% YoY to $49.8 million, and EPS fell by 25.26% YoY to $0.71. Gross margin improved slightly to 30.21%, up 2.20% YoY. While revenue growth is positive, the decline in profitability metrics is a concern.
Analysts maintain a positive outlook with raised price targets (ranging from $125 to $145) and buy/overweight ratings. However, they note challenges in the gaming sector, including stretched consumer spending and negative estimate revisions, which may weigh on the stock's performance in the near term.
