Callaway Golf (CALY)
NYSE:CALY
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Callaway Golf
(NYSE:CALY)
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Rating:56Neutral
Price Target:
$14.50
▲(2.84% Upside)
Action:ReiteratedDate:03/03/26
The score is held back primarily by volatile profitability and a sharp recent revenue decline despite improved cash generation and reduced leverage. The latest guidance and capital return plans are supportive, while technicals are neutral-to-stable and valuation is mixed due to a negative P/E offset by a high dividend yield.
Positive Factors
Leverage reduction and liquidity
Large strategic disposals generated substantial cash used to retire term debt, leaving roughly $680M of cash versus ~$480M of outstanding debt and guidance to remain net cash to 0 leverage. This materially cuts refinancing risk and gives durable financial flexibility for reinvestment, buybacks and opportunistic capital allocation over the next several quarters.
Negative Factors
Volatile revenue and profitability
Fiscal results show meaningful swings: a sharp operating and net loss in 2024 followed by a steep revenue decline in 2025. This volatility signals inconsistent demand or margin delivery, which undermines predictability of earnings and return on capital and raises the bar for sustainable margin recovery over the coming quarters.
Read all positive and negative factors
Positive Factors
Negative Factors
Leverage reduction and liquidity
Large strategic disposals generated substantial cash used to retire term debt, leaving roughly $680M of cash versus ~$480M of outstanding debt and guidance to remain net cash to 0 leverage. This materially cuts refinancing risk and gives durable financial flexibility for reinvestment, buybacks and opportunistic capital allocation over the next several quarters.
Read all positive factors
Callaway Golf (CALY) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$2.60B
Dividend YieldN/A
Average Volume (3M)2.31M
Price to Earnings (P/E)―
Beta (1Y)1.04
Revenue Growth-3.58%
EPS Growth-12720.97%
CountryUS
Employees30,000
SectorConsumer Cyclical
Sector Strength84
IndustryLeisure
Share Statistics
EPS (TTM)-0.25
Shares Outstanding184,094,270
10 Day Avg. Volume1,931,410
30 Day Avg. Volume2,308,538
Financial Highlights & Ratios
PEG Ratio-0.54
Price to Book (P/B)1.04
Price to Sales (P/S)1.04
P/FCF Ratio7.12
Enterprise Value/Market Cap1.30
Enterprise Value/Revenue0.96
Enterprise Value/Gross Profit1.59
Enterprise Value/Ebitda9.40
Forecast
1Y Price Target
$16.00Price Target Upside13.48% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering8
EPS Forecast (FY)0.43
Revenue Forecast (FY)$2.05B
Callaway Golf Business Overview & Revenue Model
Company Description
Callaway Golf Company designs, manufactures, and sells golf equipment, golf and lifestyle apparel, and other accessories in the United States, Europe, Asia, and Internationally. It operates in three business segments: Topgolf, Golf Equipment, and ...
How the Company Makes Money
Topgolf Callaway Brands generates revenue through multiple streams, primarily from its Topgolf venues, which earn income through game play fees, food and beverage sales, and event hosting. Each venue operates a high-tech driving range where custom...
Callaway Golf Key Performance Indicators (KPIs)
Callaway Golf Earnings Call Summary
Earnings Call Date:Feb 12, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:May 12, 2026
Earnings Call Sentiment Positive
The call highlights a strong strategic reset: transformative disposals, substantial debt paydown, a net cash position, continued product leadership, healthy golf participation trends, and measured 2026 guidance centered on margin and cash flow. However, meaningful near-term headwinds exist—primarily tariffs (~$75M cumulative vs 2024), planned revenue reductions from mix/launch cadence changes, and short-term EBITDA pressure. Management emphasizes long-term margin improvement and return of capital while acknowledging near-term tradeoffs.Positive Updates
Strategic Disposals and Debt Reduction
Sold Jack Wolfskin for $290 million and 60% of Topgolf in a transaction valuing Topgolf at approximately $1.1 billion, generating ~ $800 million in cash proceeds; immediately repaid $1.0 billion of Term Loan B debt, resulting in approximately $480 million outstanding debt and ~$680 million in unrestricted cash, putting the company in a net cash positive position.
Negative Updates
Tariff Headwinds and Margin Pressure
Incremental tariff expense of ~$34 million in 2025 (impacting consolidated gross margin by ~166 basis points) and an expected incremental ~$40 million in tariffs for 2026 (cumulative ~$75 million gross impact versus 2024), contributing to quarterly and annual gross margin compression (Q4 gross margin declined 220 basis points to 37.4%).
Read all updates
Q4-2025 Updates
Positive
Negative
Strategic Disposals and Debt Reduction
Sold Jack Wolfskin for $290 million and 60% of Topgolf in a transaction valuing Topgolf at approximately $1.1 billion, generating ~ $800 million in cash proceeds; immediately repaid $1.0 billion of Term Loan B debt, resulting in approximately $480 million outstanding debt and ~$680 million in unrestricted cash, putting the company in a net cash positive position.
Read all positive updates
Company Guidance
Callaway guided 2026 full‑year revenue of $1.98–$2.05 billion and adjusted EBITDA of $170–$195 million, with CapEx expected at $35–$40 million and approximately $100 million of free cash flow, and said gross margins should be roughly flat despite incremental tariffs of about $40 million in 2026 (≈$75 million vs 2024) and roughly $16 million less dividend income; Q1 revenue is forecast at $635–$665 million (≈+3% y/y at the midpoint) with Q1 adjusted EBITDA of $110–$125 million, including an incremental $24 million of tariff expense in Q1 and the lapse of a $12 million lease termination benefit from Q1 2025. Management reiterated priorities to reinvest, maintain a healthy balance sheet and return capital (including a $200 million share repurchase program), expects to remain net cash to 0 net leverage in 2026, and noted that as of Jan 2, 2026 the company had about $680 million of cash, ~$480 million of outstanding debt (including $258 million of convertibles and $166 million of term debt) and plans to settle the ~$250 million convertible due May 2026 in cash.Callaway Golf Financial Statement Overview
Summary
Income Statement
38
Negative
Balance Sheet
46
Neutral
Cash Flow
62
Positive
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 2.06B | 4.24B | 4.28B | 4.00B | 3.13B |
| Gross Profit | 867.60M | 2.65B | 2.65B | 2.41B | 1.86B |
| EBITDA | 172.20M | -973.60M | 484.70M | 477.50M | 622.00M |
| Net Income | 38.80M | -1.45B | 95.00M | 157.90M | 322.00M |
Balance Sheet | |||||
| Total Assets | 7.29B | 7.64B | 9.12B | 8.59B | 7.75B |
| Cash, Cash Equivalents and Short-Term Investments | 903.20M | 445.00M | 393.50M | 180.20M | 352.20M |
| Total Debt | 1.67B | 4.14B | 4.07B | 3.57B | 4.48B |
| Total Liabilities | 5.22B | 5.23B | 5.24B | 4.82B | 4.06B |
| Stockholders Equity | 2.07B | 2.41B | 3.88B | 3.77B | 3.68B |
Cash Flow | |||||
| Free Cash Flow | 301.20M | 83.40M | -118.10M | -570.60M | -44.00M |
| Operating Cash Flow | 333.00M | 382.00M | 364.70M | -35.10M | 278.30M |
| Investing Cash Flow | 21.60M | -297.30M | -542.90M | -535.10M | -161.90M |
| Financing Cash Flow | 92.50M | -23.60M | 375.80M | 425.30M | -124.10M |
Callaway Golf Technical Analysis
Positive
14.10
Price Trends
13.94
Positive
13.24
Positive
11.28
Positive
Market Momentum
0.13
Negative
53.35
Neutral
72.54
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CALY, the sentiment is Positive. The current price of 14.1 is above the 20-day moving average (MA) of 13.72, above the 50-day MA of 13.94, and above the 200-day MA of 11.28, indicating a bullish trend. The MACD of 0.13 indicates Negative momentum. The RSI at 53.35 is Neutral, neither overbought nor oversold. The STOCH value of 72.54 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for CALY.
Callaway Golf Risk Analysis
Callaway Golf disclosed 53 risk factors in its most recent earnings report. Callaway Golf reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Callaway Golf Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
72 Outperform | $2.47B | 29.88 | 13.18% | 0.79% | 7.27% | 45.12% | |
69 Neutral | $533.93M | -33.91 | -5.18% | 3.22% | -0.07% | -31.45% | |
67 Neutral | $2.78B | 21.84 | 22.66% | ― | 1.56% | -17.21% | |
63 Neutral | $5.73B | 25.34 | 23.39% | 1.15% | 4.20% | 24.12% | |
61 Neutral | $18.38B | 12.79 | -2.54% | 3.03% | 1.52% | -15.83% | |
56 Neutral | $2.60B | -8.13 | -2.47% | ― | -3.58% | -12720.97% | |
47 Neutral | $372.21M | -2.45 | ― | ― | -3.55% | -111.90% |
* Consumer Cyclical Sector Average
CALY
Callaway Golf
14.10
7.78
123.10%
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Callaway Golf Corporate Events
Business Operations and StrategyFinancial DisclosuresM&A Transactions
Callaway Golf Reorganizes Segments After Strategic Divestitures
Neutral
Feb 27, 2026
Following a 2025 strategic realignment that included selling its Jack Wolfskin and Topgolf businesses, Callaway has reorganized into two reportable segments: Golf Equipment and Apparel, Gear and Other. The company has reclassified Jack Wolfskin an...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.