One-glance verdict
Undervalued
$41.52 our estimate vs market $17.43
Wall Street consensus: $21.00 (-49.4% lower than our fair-value estimate)
58% below our estimate, below the bear case
Fundamentals snapshot
Callaway Golf Company
CALY · NYQ · Consumer Cyclical · Leisure
Current price
$17.43
52-week range
$9.24 - $20.28
Market cap
$3.11B
Balance sheet
Healthy
2.11x Stretched
Net cash $164.80M. Interest coverage shows how many times profit covers the interest bill.
What stands out
3 Rewards
2 Risks
3 rewards · 2 risks
- Reward Revenue grew 2.1% last year.
- Reward Free cash flow was positive in 8/10 years.
- Risk Forward P/E (18.0x) is higher than trailing (14.3x) - earnings are expected to drop.
- Risk Operating margin compressed from 7.2% to 3.1% over 3 years.
What this company does
Callaway Golf Company
Callaway Golf Company makes and sells all sorts of golf gear, like clubs and balls, along with golf clothing and accessories, bringing in money from selling these items through various stores and online. This matters because their success in selling these products directly impacts how much profit, or "margin" (the profit left after paying for making and selling the goods), they can achieve. The company's ability to get its products to customers, known as its "supply chain" (the whole process from making the product to getting it to the buyer), is also key to its overall financial health.
How the company got here
Callaway Golf Company has a long history in the golf world, originally founded in 1982. It became known for its innovative golf clubs, constantly trying to improve performance for golfers. A major turning point was its rebranding and name change to Topgolf Callaway Brands Corp. in 2021, reflecting a broader strategy that included the popular Topgolf entertainment venues. More recently, in January 2026, the company reverted to the name Callaway Golf Company, signaling a continued focus on its core golf business while still acknowledging the importance of its entertainment offerings.
What it actually does
At its heart, Callaway Golf Company makes and sells everything a golfer might need to play the game. This includes the clubs they swing, like drivers and irons, and the balls they hit. Beyond equipment, the company also offers clothing and accessories designed for both on and off the golf course, aiming to blend performance with a lifestyle appeal. They sell these products through various channels, from specialized golf shops to larger sporting goods stores and directly to customers online.
Golf Equipment
This is the core of Callaway's business, focusing on the gear golfers use to play. They design and produce a wide range of clubs, including drivers for hitting the ball long distances, fairway woods for versatile shots, irons for accuracy, and wedges for precise approaches to the green. Callaway also offers complete sets for beginners under brands like Strata. Additionally, they make putters, which are crucial for getting the ball into the hole, under their Odyssey brand. This segment is a significant portion of the company's overall revenue, as it directly serves the fundamental needs of golfers.
Apparel, Gear and Other
Beyond clubs and balls, Callaway has expanded into lifestyle and performance wear, as well as other golf-related accessories. Under brands like TravisMathew, they offer apparel that can be worn both on the golf course and in casual settings, appealing to a broader fashion-conscious consumer. They also produce golf bags and other accessories under the OGIO brand, which are essential for carrying equipment. This segment represents a smaller but important part of the company, diversifying its offerings and reaching customers who value both performance and style.
What management is betting on now
Callaway's management is focused on strengthening its position as a leader in the golf industry while also capitalizing on the growth of golf-related entertainment. They are likely investing in research and development to create even more advanced golf equipment that appeals to players of all skill levels. Furthermore, the company is probably looking to expand its reach in the apparel and lifestyle market, recognizing the potential to capture more consumer spending beyond just equipment. This dual approach aims to ensure continued growth by serving both the dedicated golfer and the broader golf-enthusiast market.
Price history
How the share price has moved
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Loading price history…
Earnings history
Last 8 quarters — what happened
Click any quarter to read the call summary and what the numbers say.
FY2024 Q4
$-25.00M
FY2025 Q1
$-155.10M
FY2025 Q2
$52.50M
FY2025 Q3
$162.10M
FY2025 Q4
$-114.90M
FY2026 Q1
$-176.00M
FY2026 Q2
$238.10M
FY2026 Q3
$180.80M
Revenue
$436.90M
Net income
$45.70M
Diluted EPS
0.25
Operating cash flow
$191.90M
Free cash flow
$180.80M
Fetching…
Sources
Revenue
$612.20M
Net income
$75.20M
Diluted EPS
0.40
Operating cash flow
$249.50M
Free cash flow
$238.10M
Fetching…
Sources
Revenue
$687.50M
Net income
$93.10M
Diluted EPS
0.47
Operating cash flow
$-169.00M
Free cash flow
$-176.00M
Fetching…
Sources
Revenue
$367.50M
Net income
$-417.00M
Diluted EPS
-2.27
Operating cash flow
$63.90M
Free cash flow
$-114.90M
Fetching…
Sources
Revenue
$934.00M
Net income
$-14.70M
Diluted EPS
-0.08
Operating cash flow
$228.40M
Free cash flow
$162.10M
Fetching…
Sources
Revenue
$1.11B
Net income
$20.30M
Diluted EPS
0.11
Operating cash flow
$126.90M
Free cash flow
$52.50M
Fetching…
Sources
Revenue
$1.09B
Net income
$2.10M
Diluted EPS
0.01
Operating cash flow
$-85.20M
Free cash flow
$-155.10M
Fetching…
Sources
Revenue
$371.40M
Net income
$-1.51B
Diluted EPS
-8.23
Operating cash flow
$43.30M
Free cash flow
$-25.00M
Fetching…
Sources
Is it cheap or expensive?
Fair value $41.52 vs current price $17.43
Wall Street consensus is the average analyst price target: $21.00 (-49.4% lower than our fair-value estimate).
Our most-likely fair value is $41.52 a share — about 138.2% above today's price of $17.43, so the stock currently looks cheap (undervalued).
Is it drowning in debt?
Healthy
Net cash $164.8M - more cash than debt. Interest coverage 2.1x.
Net debt
$-164.80M
Interest coverage
2.11x
Callaway Golf Company's profit covers its interest bill about 2.1 times over.
Healthy
Worse cushion
Baseline
Better cushion
CALY
BASELINE
Callaway Golf Company
Total debt $268.70M Interest coverage 2.11x This is the baseline the peer rows are being compared against.
Total debt $884.17M Interest coverage 5.04x +138% vs CALY Carries about 2.4x more debt cushion than CALY.
Total debt $253.03M Interest coverage 482.07x +22,705% vs CALY Carries about 228.1x more debt cushion than CALY.
Total debt $1.69B Interest coverage 1.72x -19% vs CALY Carries about 1.2x less debt cushion than CALY.
Total debt $2.20B Interest coverage 2.80x +32% vs CALY Carries about 1.3x more debt cushion than CALY.
What you should know
The case for and against CALY
3 Rewards
2 Risks
Rewards
-
Revenue grew 2.1% last year.
-
Free cash flow was positive in 8/10 years.
-
Trades at 14.3x P/E vs peer median 21.5x (33.5% cheaper).
Risks
-
Forward P/E (18.0x) is higher than trailing (14.3x) - earnings are expected to drop.
-
Operating margin compressed from 7.2% to 3.1% over 3 years.
The numbers
All the key metrics, grouped by purpose
Tap any ? icon to learn what it means.
Valuation
How expensive the stock looks
P/E (TTM)
14.29x
Forward P/E
18.02x
P/B
1.42x
P/S
1.48x
EV/EBITDA
11.42x
PEG ratio
0.72x
Profitability
How much profit each dollar creates
Gross margin
45.4%
Operating margin
3.1%
Net margin
-9.6%
ROE
5.7%
ROA
2.5%
Health
Liquidity and balance-sheet strength
Debt / equity
0.12x
Current ratio
3.09x
Quick ratio
1.58x
Total debt
$268.70M
Total cash
$433.50M
Growth
How the business has been compounding
Revenue TTM
$2.10B
Revenue 5Y CAGR
-10.0%
EPS TTM
1.22
EPS 5Y CAGR
-36.5%
Cash flow
How much cash the business throws off
Operating CF TTM
$336.30M
Free CF TTM
$302.20M
FCF margin
14.4%
Dividend
Shareholder payout
Yield
0.0%
Payout ratio
0.0%
Last ex-div date
2020-05-26