Churchill Downs Incorporated (CHDN): fair value, margin of safety and Wheel Score

Is CHDN undervalued?

Churchill Downs Incorporated (CHDN) closed at 82.15 on 16 Oct 2026. The GLS average fair value - the simple average of the 9 valuation models that produced a positive number - is 109.00, so the price sits 25% below it. 5 of the 9 models value the shares above the current price. A margin of safety between 10% and 30% is where most of the Sunday Scan candidates come from.

There is a wide gap between DDM (6.44) and 10 Cap (192.46). When the models are this far apart the "fair value" is really a range, and the margin of safety above should be read with that range in mind.

The nightly engine files CHDN under Value: positive earnings at a P/E of 18 or less.

Nine valuation models for CHDN

Each model turns the latest filed numbers into a value per share; the GLS fair value is the simple average of the ones that produce a positive number. The last two rows are shown for reference and never enter the average. The Quote page lets you switch any model off and add your own margin of safety.

Quality and financial health

Churchill Downs Incorporated scores 8 of 9 on the Piotroski F-score, the nine yes/no tests of profitability, leverage and efficiency on the latest annual accounts - a strong reading that passes the Sunday Scan's "6 or more" rule with room to spare. On durability CHDN scores 5.0/10 on the GLS Moat - a middle reading; the Scorecard on the Quote page's Financials tab shows which ten-year lines are steady and which are not.

Returns on capital are moderate - ROIC 6.1%, ROE 37.6%, ROA 5.1% - with debt at 5.15 times equity and a free-cash-flow yield of 6.7%. Debt of 5.15 times equity is on the high side for the sector and is worth checking against the cash flow before treating the stock as a long-term hold.

The dividend yield is 0.53% with a payout ratio of 8% - a small yield that leaves most of the earnings in the business. Revenue comes mainly from Gaming 27%, Pari Mutuel, Historical Racing 26%, Racing Event Related Services 19% (quarter Q2 FY2026).

Institutional ownership scores 10/10, insider activity 5/10 and Congressional trading 5/10 on the GLS smart-money scales.

Wheel Score 85: Prime

With a Wheel Score of 85, Churchill Downs Incorporated sits in the Prime band - price, quality and premium all line up for the wheel strategy. The parts: Value 23/25, Health 18/20, Moat 8/15, Premium 20/20, Stability 17/20. A high score is a ranking, not a signal: it says nothing about timing, the earnings date or your position size.

Implied volatility is 45% on the near-the-money contracts 20-60 days out - inside the 35-60% range the Wheel Score pays full marks for: enough premium to be worth selling, not so much that the risk is unpaid. Chain open interest is 27,993 contracts across all expiries - enough for the wheel at normal size.

Volume runs at 878k shares a day on a market cap of $5.7B, with a beta of 0.67 - a low beta, so day-to-day moves are smaller than the market's; the Stability part of the Wheel Score gives that 17 of 20.

The Wheel Score ranks ~7,400 US stocks for selling cash-secured puts and covered calls; it is updated nightly and is not a recommendation. The walkthrough lesson shows how the score fits into a trade, start to finish.

Upcoming events

Churchill Downs Incorporated reports earnings on 28 Oct 2026 (after the close) - inside the 14-day window the Sunday Scan avoids, because a put sold now would carry the report's gap risk.

Earnings, dividend, IPO, split and economic calendars for the whole market, filterable to your watchlists.

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