Churchill Downs, Inc.
(
CHDN
) has been moving steadily higher since releasing strong first
quarter 2012 results, which included a 173% earnings surprise.
Moreover, shares have shot up 38% over the past 6 months and is
currently trading around its 52-week high.
This diversified gaming company became a Zacks #1 Rank (Strong Buy)
stock on March 15.
Five Straight Positive Surprises
Churchill Downs has beaten the Zacks Consensus Estimate for five
consecutive quarters now; the past three have surpassed by
triple-digit percentages with an average of 286.5%.
On March 7, the company reported a profit of 8 cents per share for
the first-quarter 2012, against a loss of 19 cents in the year-ago
quarter. The Zacks Consensus Estimate was calling for a loss of 11
cents. The turnaround was attributed to the company's
diversification and seasonal factors.
Revenues jumped 5% to $138.2 million, beating the Zacks Consensus
Estimate by 5.85%. A 20% growth in the online business segment
drove the upside in revenue.
EBITDA surged 55% year over year to $17.3 million, benefiting from
an upside in all three segments - racing (up 9%), online (up 38%)
and gaming (up 16%).
Earnings Estimates Climbing High
The Zacks Consensus Estimate for 2012 is currently $3.18 per share,
which is up 1.6% in seven days and 5.3% in 30 days.
For 2013, the Zacks Consensus Estimate is up 5% in the past week to
$3.57 per share, which suggests year-over-year profit growth of
more than 12%.
Reasonable Valuation
Churchill Downs currently trades at a forward P/E of 19.1x, a 24.0%
premium to the peer group average of 15.4x. But this doesn't seem
too expensive given the company's long-term EPS growth rate of 25%.
However, on a price-to-book basis, shares currently trade at 1.76x,
a 13.5% premium to the peer group average of 1.55x.
Market Performance & Technicals
The share price hasn't moved smoothly higher over the past six
months, but it has remained far above its 200 day moving average
and S&P 500. The beta of the company remains 1.23, which should
help it outperform the benchmark index in the near-term.
Churchill Downs is trading just 4% below its 52-week high. The
company generated a year-to-date return of 16.2% versus 4.0% for
the benchmark.
Louisville, Kentucky-based Churchill Downs was incorporated in 1928
and is renowned for its horse-racing facilities. The company also
operates electronic gaming systems and owns several casinos. With
about 2,000 employees worldwide, the company operates in Kentucky,
Florida, Louisiana, Illinois and Mississippi.
With a market capitalization of $1.02 billion, Churchill primarily
competes with
Caesars Entertainment Corporation
(
CZR
) and
MI Developments Inc.
(
MIM
).
CHURCHILL DOWNS (CHDN): Free Stock Analysis
Report
CHURCHILL DOWNS (CHDN): Free Stock Analysis
Report
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