The 11.8 percent sell-off in Churchill Downs, Inc. CHDN 0.7% in the past month could be a buying opportunity for patient investors.

Hilliard Lyons analyst Jeffrey Thomison has upgraded the stock from Neutral to Buy and sees potential for strong cash flow and revenue growth ahead for Churchill Downs. Thomison urges investors not to get spooked by the company’s recent earnings weakness.

“Recent weakness in the stock price is likely related to mobile videogame developer Big Fish Games, whose Q1 profits were impacted by a boost in user acquisition spending,” he explains.

Thomison sees a fundamentally strong company with a more diverse business than ever before. He even believes that this year’s Kentucky Derby week could provide upside to Churchill’s Q2 results.

Q1 EBITDA for Churchill Downs climbed 6 percent year-over-year, even with the decline from Big Fish. Thomison sees the company’s potential for revenue and earnings growth coupled with its manageable debt load and potential for deleveraging as a winning recipe for investors. Churchill Downs’ debt at the end of Q1 stood…

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