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Churchill Downs Inc.
by Michael VodickaJune 30, 2011 | Comments : 0 Recommended this article: (0)
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Churchill Downs, Inc. owns horse-racing tracks and gaming operations in the United States. The company was founded in 1928 and has a market cap of $730 million.
Churchill Downs has seen big gains over the last year, but shares got an extra boost into a new multi-year high on May 9 when the company reported Q1 results that came in ahead of expectations.
Revenue for the period was up 54% from last year to $132 million. And although earnings were negative, its loss of 20 cents was well ahead of the Zacks Consensus Estimate calling for a loss of 32 cents.
The big jump in revenue was driven by the company's Gaming and Online segments, where its recent acquisition of Youbet.com and Harlow's Casino Resort and Hotel provided a nice boost.
Churchill has also seen its cash position grow over the last year, with cash and equivalents up $34 million to $82 million against a total debt load of $240 million.
We saw some pretty bullish movement in estimates off the upbeat quarter, with the current year jumping 18% to $2.25. The next-year estimate is pegged at $2.53, a solid 12% growth projection.
But in spite of the recent gains, CHDN still looks reasonably valued, trading with a forward P/E of 20X, a discount to the industry average of 21X.
On the chart, shares jumped into a new multi-year high on the good quarter. Look for support from the longer-term trend on any weakness, take a look below.
Michael Vodicka is the Momentum Stock Strategist for Zacks.com. He is also the Editor in charge of the Zacks Momentum Trader Service.
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