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More Reading from MarketBeat
Churchill Downs: The Derby Is Just the BeginningWritten by Chris Markoch. Publication Date: 4/24/2026. 
Key Points
- Churchill Downs beat Q1 2026 earnings expectations, driven by strong growth in historical racing machines.
- The company’s $85 million Preakness Stakes IP acquisition adds high-margin licensing revenue and strategic control.
- With analysts seeing ~35% upside, HRM expansion remains the key driver for long-term CHDN stock growth.
- Special Report: Elon Musk already made me a “wealthy man”
Churchill Downs and the Kentucky Derby are nearly synonymous. For investors, though, it's worth getting to know Churchill Downs Inc. (NASDAQ: CHDN) — the company that owns the racetrack that hosts the Derby. It's more than an event-driven business and still has meaningful growth ahead. That growth showed up clearly in the company's Q1 2026 earnings report, where it posted record results on both the top and bottom lines.
The Wall Street Journal is already raising the alarm about a potential market crash, and Weiss Ratings research points to the first half of 2026 as a particularly rough stretch for certain holdings.
Some of America's most popular stocks could take serious damage as a radical market shift plays out. Analysts at Weiss Ratings have identified five names you may want to remove from your portfolio before this unfolds.
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Revenue of $663 million topped estimates of $659.32 million and rose 3% from $642.6 million in Q1 2025, a quarter in which the company had missed forecasts. Earnings per share of $1.21 beat expectations by $0.18 and were $0.14 higher year over year. The Real Reason to Bet on Churchill DownsHistorically, the second quarter has been Churchill Downs' strongest, largely because the Kentucky Derby runs then. The rest of the year, racetrack revenue is relatively small: this quarter the Churchill Downs racetrack contributed $3 million, a year-over-year decline of $1 million (source). So, as iconic as the Derby is, it isn't the main reason to own CHDN. The primary growth driver is the company's leadership in Historical Racing Machines (HRMs). These are slot-machine–style terminals that let players bet on the outcomes of previously run horse races; the historical data is obscured so the experience resembles live gambling. There is a legal distinction behind that design. HRMs are generally classified as a form of pari-mutuel horse-racing wagering, not traditional casino gambling, which lets them operate in states where casinos are restricted or outlawed. In Q1, segment revenue totaled $301 million, up $24 million year over year — growth driven almost entirely by HRMs. Expansion is central to the outlook:
Marshall Yards Racing & Gaming in southwestern Kentucky opened Feb. 25, 2026. Rockingham Grand Casino in Salem, New Hampshire, announced Jan. 12; it's a $180–$200 million investment targeting a mid-2027 opening. The company plans to spend $70–$80 million of its 2026 capital-expenditure budget on Rockingham alone. Churchill Downs Expands Its Racing Empire With Preakness DealThe Kentucky Derby is the first — and arguably most iconic — leg of the Triple Crown, which also includes the Preakness Stakes and the Belmont Stakes. Investors should note that on April 21, two days before the earnings release, Churchill Downs agreed to acquire the intellectual property for both the Preakness Stakes and the Black-Eyed Susan Stakes for $85 million. Under the deal, Churchill Downs will own the trademarks and related rights for the Preakness Stakes without owning Pimlico Race Course or running the event. Instead, the company will collect licensing fees from the state of Maryland and gain leverage over future broadcast rights, calendar negotiations, potential HRM licensing in Maryland, and the broader cultural narrative of American thoroughbred racing. And it did so for less than one quarter of current free cash flow — a development that wasn't fully priced into CHDN before the earnings announcement. CHDN Stock Outlook: Can HRM Growth Drive the Next Leg Higher?CHDN jumped more than 10% on the day of the earnings report. Before the news, the stock had been trading near its 52-week low, suggesting investors may have already found a floor. The question now is how high it can go. Analysts assign CHDN a consensus price target of $135.60, implying roughly 35% upside. That raises the question of whether the Preakness IP acquisition and continued HRM expansion are enough to lift price targets higher. Churchill Downs generates revenue from four primary sources: Live Racing, Historical Racing Machines, its TwinSpires wagering platform, and traditional casino Gaming (source). Of those, Live Racing and casino Gaming are unlikely to be the main growth engines — casino revenue actually declined year over year in Q1, weighed down by the company's exit from Louisiana. TwinSpires, which runs online and retail horse-racing wagering plus sports betting, is a reliable contributor but not a high-growth business. That puts growth squarely on HRMs. The business produced $257 million in pari-mutuel revenue in Q1 and is actively expanding into new states. The Preakness IP acquisition adds an interesting angle: if it helps accelerate HRM legalization or licensing in Maryland, Churchill Downs' leading growth driver would gain a new runway. Looking at the chart, CHDN was in a cautious recovery after a steep selloff from a December 2025 peak near $120. That selloff produced a "death cross" when the 50-day simple moving average (SMA) fell below the 200-day SMA. 
Price action reclaimed the 200-day SMA on the day of the report — a notable single-session move, especially alongside a fundamental catalyst. The key will be whether CHDN can hold and consolidate around the 200-day SMA near $92–$93; a sustained consolidation there could set the stage for a "golden cross" in the weeks ahead. Waiting for that technical confirmation may be prudent, while risk-tolerant investors might consider initiating a position at these levels. |
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