Is Churchill Downs (CHDN) Stock Undervalued Right Now?

Here at Zacks, we focus on our proven ranking system, which places an emphasis on earnings estimates and estimate revisions, to find winning stocks. But we also understand that investors develop their own strategies, so we are constantly looking at the latest trends in value, growth, and momentum to find strong companies for our readers.

Of these, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. Value investors use a variety of methods, including tried-and-true valuation metrics, to find these stocks.

In addition to the Zacks Rank, investors looking for stocks with specific traits can utilize our Style Scores system. Of course, value investors will be most interested in the system's "Value" category. Stocks with "A" grades for Value and high Zacks Ranks are among the best value stocks available at any given moment.

One stock to keep an eye on is Churchill Downs (CHDN). CHDN is currently sporting a Zacks Rank #2 (Buy) and an A for Value. The stock is trading with a P/E ratio of 14.21, which compares to its industry's average of 32.69. Over the past 52 weeks, CHDN's Forward P/E has been as high as 22.77 and as low as 12.94, with a median of 16.51.

Another valuation metric that we should highlight is CHDN's P/B ratio of 6.42. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. This stock's P/B looks attractive against its industry's average P/B of 11.93. Over the past year, CHDN's P/B has been as high as 10.03 and as low as 5.93, with a median of 7.60.

These are just a handful of the figures considered in Churchill Downs's great Value grade. Still, they help show that the stock is likely being undervalued at the moment. Add this to the strength of its earnings outlook, and we can clearly see that CHDN is an impressive value stock right now.

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This article originally published on Zacks Investment Research (zacks.com).

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