Churchill Downs (CHDN) is back in focus after reporting Q1 2026 results that featured revenue growth, adjusted EBITDA margin expansion, and EPS outperformance, supported by cash generation, HRM expansion, and debt reduction.

Churchill Downs shares have picked up momentum in the short term, with a 1-day share price return of 1.97% and a 7-day share price return of 8.25%. This comes even though the year to date share price return is down 18.79% and the 3-year total shareholder return is down 30.14%. This suggests the strong Q1 2026 update and progress on HRM expansion, NBC renewal, and wagering growth are starting to shift sentiment after a tougher multi year stretch.

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With Churchill Downs trading at $90.91 and third party analyst targets and intrinsic estimates pointing higher, the key question is whether recent Q1 momentum and HRM growth leave room for upside or if markets are already pricing in future gains.

Most Popular Narrative: 32.5% Undervalued

Compared with the last close at $90.91, the most followed Churchill Downs narrative points to a fair value of $134.75, built on detailed revenue, margin, and media assumptions.

Expansion and ramp-up of high-margin Historical Racing Machine (HRM) properties in Kentucky and Virginia, along with new projects in New Hampshire and potential new markets, will increase Churchill Downs' exposure to experiential gaming and drive recurring revenue and margin growth, as consumer preferences continue shifting toward destination entertainment and integrated gaming.

Curious what kind of revenue mix, margin reset, and future earnings multiple are embedded in that $134.75 fair value and long term HRM rollout story? The full narrative spells out those assumptions in plain numbers and ties them directly to Churchill Downs' valuation path.

Result: Fair Value of $134.75 (UNDERVALUED)

However, Churchill Downs still faces concentrated exposure to horse racing and HRM venues, and any regulatory setbacks or weaker returns on new projects could challenge this view of the company as undervalued.

Next Steps

With Churchill Downs showing both risks and potential rewards, it makes sense to check the underlying data yourself and move quickly to shape your own view using the 4 key rewards and 1 important warning sign

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.