Callaway Golf (CALY) AI Stock Analysis

• Market Cap: $2.70B
• Dividend Yield: N/A
• Average Volume (3M): 2.31M
• Price to Earnings (P/E): ―
• Beta (1Y): 1.00
• Revenue Growth: -3.58%
• EPS Growth: -12720.97%
• Country: US
• Employees: 30,000
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Leisure
• EPS (TTM): -0.05
• Shares Outstanding: 183,883,640
• 10 Day Avg. Volume: 2,433,497
• 30 Day Avg. Volume: 2,311,583
• PEG Ratio: <0.01
• Price to Book (P/B): 0.60
• Price to Sales (P/S): 0.34
• P/FCF Ratio: 16.67
• Enterprise Value/Market Cap: 1.97
• Enterprise Value/Revenue: 1.31
• Enterprise Value/Gross Profit: 2.03
• Enterprise Value/Ebitda: -5.41
• 1Y Price Target: $13.30
• Price Target Upside: -14.08% Downside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 11
• EPS Forecast (FY): -0.14
• Revenue Forecast (FY): $3.94B

• Rating: 62 Neutral
• Price Target: $16.50 ▲(6.59% Upside)

The score is held back primarily by weak profitability and deteriorating free cash flow, despite strong technical momentum. Positive catalysts from the earnings call (raised guidance) and corporate actions (Topgolf stake sale, major debt paydown, and buyback authorization) improve the outlook, while valuation remains constrained by a negative P/E and no stated dividend yield.

Positive Factors

Material debt reduction and improved liquidity

The sale generated ~$800M net proceeds and funded a $1.0B term-loan repayment, materially lowering gross borrowings. This durable reduction in leverage and higher available liquidity improves financial flexibility, lowers interest burden, and strengthens capacity for capex and strategic investments over months.

Strategic refocus on core Golf Equipment business

Management is repositioning as a pure-play golf equipment company, changing the corporate name and ticker and keeping a 40% Topgolf stake with marketing ties. This sharpens strategic focus, simplifies operations and capital allocation, while preserving exposure to Topgolf upside via a minority interest.

Resilient product-level performance and high gross margins

The equipment segment grew modestly while product categories (clubs, balls) showed consistent demand. Combined with a reported gross margin of ~64.6%, this indicates durable pricing power and production efficiency in core products, supporting sustainable segment-level earnings even if operating margins lag.

Negative Factors

Severely weakened free cash flow generation

An ~87% decline in free cash flow over the trailing period signals a structural cash-generation problem. Limited free cash constrains reinvestment, debt servicing and shareholder returns, forcing reliance on asset sales or financing to fund operations and strategic initiatives over the medium term.

Ongoing negative profitability and revenue pressure

Declining top-line and persistent negative operating and net margins show the company is not converting sales into sustainable profitability. This undermines return-on-equity and limits internal funding for growth, making long-term operating improvement and margin recovery essential for durable financial health.

Structural headwinds: tariffs, Asia weakness, and Topgolf bay declines

Rising tariff costs (forecasted at ~$40M) increase input cost pressure and compress margins. Coupled with persistent weakness in Asian markets and declines in Topgolf 3-plus bay business, these are multi-quarter structural challenges that can dampen revenue growth and require sustained strategic responses to restore global and venue-level performance.

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 Active Lifestyle. The Topgolf segment operates Topgolf venues equipped with technology-enabled hitting bays, bars, dining areas, and event spaces, as well as Toptracer ball-flight tracking technology. The Golf Equipment segment provides drivers, fairway woods, hybrids, irons, wedges and packaged sets, putters, and pre-owned golf clubs under the Callaway and Odyssey brands, and golf balls under the Callaway Golf and Strata brands. The Active Lifestyle segment offers golf apparel and footwear; golf accessories, including golf bags, golf gloves, headwear, and practice aids under the Callaway brand; men's, women's, and youth apparel as well as footwear, outerwear and accessories under the TravisMathew brand. This segment also provides storage and travel gear for sport and personal use, such as backpacks, travel bags, duffel and golf bags, and accessories under the OGIO brand. In addition, it offers outdoor apparel for men, women and children comprising jackets, trousers, dresses, skirts, and tops; and footwear and outdoor equipment, including packs and bags, travel bags, tents, sleeping bags, and accessories under the Jack Wolfskin brand. It sells its products through golf retailers, sporting goods retailers, online retailers, mass merchants, department stores, third-party distributors, and mail order stores, and directly to consumers through its retail stores and websites. The company was formerly known as Topgolf Callaway Brands Corp. and changed its name to Callaway Golf Company in January 2026. Callaway Golf Company was incorporated in 1982 and is headquartered in Carlsbad, California.

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 customers pay for access to hitting bays equipped with interactive gaming technology. Additionally, the sale of Callaway's golf equipment, including clubs and balls, serves as a significant revenue source. The company also engages in merchandise sales and partnerships, including collaborations with other brands and sponsorships, which further enhance its earnings. The combination of these diverse revenue streams and a strong brand presence in the golf industry solidifies the company's financial performance.

Callaway Golf Financial Statement Overview

Summary

Topgolf Callaway Brands faces significant financial challenges, particularly in terms of profitability and cash flow generation. While the company maintains a strong gross profit margin and has improved its leverage position, negative revenue growth and profitability metrics indicate a need for strategic adjustments. The cash flow situation is concerning, with declining free cash flow and limited cash conversion from operations.

Income Statement

Topgolf Callaway Brands has experienced declining revenue growth in recent periods, with a negative growth rate of -1.91% in the TTM. The company also faces challenges with profitability, as evidenced by negative net profit and EBIT margins. However, the gross profit margin remains relatively strong at 64.55%, indicating efficient cost management at the production level.

Balance Sheet

The company's debt-to-equity ratio has improved to 0.78 in the TTM, indicating a reduction in leverage compared to previous years. However, the return on equity remains negative, reflecting ongoing profitability challenges. The equity ratio is stable, suggesting a balanced asset structure.

Cash Flow

Cash flow performance is weak, with a significant decline in free cash flow growth of -87.49% in the TTM. The operating cash flow to net income ratio is low, indicating challenges in converting earnings into cash. The free cash flow to net income ratio is also low, reflecting limited cash generation relative to net losses.

Breakdown
Income Statement
Total Revenue
Gross Profit
EBITDA
Net Income
Balance Sheet
Total Assets
Cash, Cash Equivalents and Short-Term Investments
Total Debt
Total Liabilities
Stockholders Equity
Cash Flow
Free Cash Flow
Operating Cash Flow
Investing Cash Flow
Financing Cash Flow

Callaway Golf Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 15.48
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: Negative

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 15.48 is above the 20-day moving average (MA) of 13.20, above the 50-day MA of 12.06, and above the 200-day MA of 9.29, indicating a bullish trend. The MACD of 0.94 indicates Negative momentum. The RSI at 77.07 is Negative, neither overbought nor oversold. The STOCH value of 91.16 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for CALY.

Callaway Golf Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
YETI	78 Outperform	$3.75B	25.33	21.77%	―	1.56%	-17.21%
GOLF	70 Outperform	$5.31B	24.76	25.91%	1.15%	4.20%	24.12%
OSW	70 Outperform	$1.99B	27.56	13.53%	0.79%	7.27%	45.12%
CALY	62 Neutral	$2.70B	-1.89	-46.95%	―	-3.58%	-12720.97%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
JOUT	60 Neutral	$459.14M	-13.96	-7.78%	3.22%	-0.07%	-31.45%
XPOF	54 Neutral	$380.30M	-4.82	―	―	-3.55%	-111.90%