Callaway Golf Company (CALY)
NYSE:CALY
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Callaway Golf
(NYSE:CALY)
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Rating:70Outperform
Price Target:
$17.50
▲(13.93% Upside)
Action:Upgraded
Date:05/12/26
The score is driven primarily by improving (but still mixed) fundamentals—stronger cash flow and reduced leverage, offset by a sharp TTM revenue decline and thin operating margins. Valuation is a major positive due to the low P/E and high dividend yield. Technicals are supportive (uptrend and positive MACD) but moderated by an elevated RSI, and the earnings call was constructive on raised guidance with notable H2 pressure and tariff/input-cost risks.
Positive Factors
Cash generation
Sustained positive operating and free cash flow in 2025 and the trailing twelve months indicate durable cash conversion. That cash supports capex, buybacks and debt repayment, providing financial flexibility to invest through cycles and fund shareholder returns even if earnings remain uneven.
Negative Factors
Revenue decline & thin profitability
A sharp TTM revenue decline and thin operating margins reduce slack to absorb shocks. Volatile profitability (large 2024 loss then modest profits) increases execution risk, limits reinvestment capacity and makes earnings more sensitive to demand swings over the next several quarters.
Read all positive and negative factors
Positive Factors
Negative Factors
Cash generation
Sustained positive operating and free cash flow in 2025 and the trailing twelve months indicate durable cash conversion. That cash supports capex, buybacks and debt repayment, providing financial flexibility to invest through cycles and fund shareholder returns even if earnings remain uneven.
Read all positive factors
Callaway Golf Key Performance Indicators (KPIs)
Callaway Golf (CALY) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$2.76B
Dividend YieldN/A
Average Volume (3M)3.07M
Price to Earnings (P/E)6.8
Beta (1Y)1.17
Revenue Growth-25.98%
EPS Growth80.02%
CountryUS
Employees30,000
SectorConsumer Cyclical
Sector Strength84
IndustryLeisure
Share Statistics
EPS (TTM)0.18
Shares Outstanding179,757,570
10 Day Avg. Volume3,240,139
30 Day Avg. Volume3,071,508
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 Cap1.06
Enterprise Value/Revenue0.95
Enterprise Value/Gross Profit1.66
Enterprise Value/Ebitda7.98
Forecast
1Y Price Target
$17.40Price Target Upside13.28% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering6
EPS Forecast (FY)0.65
Revenue Forecast (FY)$2.06B
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
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Callaway Golf Earnings Call Summary
Earnings Call Date:May 07, 2026
(Q1-2026)
| % Change Since: |
Next Earnings Date:Aug 12, 2026
Earnings Call Sentiment Positive
The call conveyed strong operational performance in Q1 with notable top-line growth (+9%), significant adjusted EBITDA expansion (+31%), meaningful gross margin improvement (+260 bps), record green-grass ball share gains, improved liquidity and active capital return through buybacks and debt repayment. Management raised full-year revenue and EBITDA guidance and lowered tariff expense expectations, reflecting confidence in near-term demand and structural margin progress. Offsetting these positives are ongoing tariff uncertainty, rising commodity/petrochemical cost pressures, and deliberate strategic actions (product launch shifts and SKU rationalization) expected to depress the back half of the year. While some margin benefits included one-time items and timing effects, the overall narrative emphasized sustained improvement and a disciplined path to higher profitability and shareholder returns.Positive Updates
Revenue Growth
Consolidated revenue of $688 million in Q1 2026, up 9% year-over-year, driven by strong demand for 2026 product lines and better-than-expected supply chain execution.
Negative Updates
Tariff Uncertainty and Incremental Tariff Costs
Q1 included approximately $18M of incremental tariff expense; tariff environment remains dynamic — temporary Section 122 tariffs (10%) expire in July and management assumes reversion to prior ~20% rates in H2, with full-year gross tariff expense forecast at ~$50M (previously $75M) but subject to change.
Read all updates
Q1-2026 Updates
Positive
Negative
Revenue Growth
Consolidated revenue of $688 million in Q1 2026, up 9% year-over-year, driven by strong demand for 2026 product lines and better-than-expected supply chain execution.
Read all positive updates
Company Guidance
Callaway raised its 2026 outlook, now forecasting full‑year net sales of $2.015–$2.070 billion (≈$28M higher at the midpoint) and adjusted EBITDA of $211–$233M (≈$40M higher at the midpoint, with ~$25M from lower tariffs and ~$15M from flow‑through), and now expects gross margin to be up year‑over‑year (revised from ~flat). Management expects full‑year gross tariff expense of about $50M (down from prior $75M), has applied for >$10M of refunds in Phase 1 with potential refunds up to just under $50M, and noted Q1 incurred roughly $18M of incremental tariff expense; Q1 results were net sales $688M (up 9%), adjusted EBITDA $164M (up 31%), and gross margin 47.7% (+260 bps). Q2 guidance is net sales $585–$610M and adjusted EBITDA $98–$108M (implied H1 net sales up mid‑single digits at the midpoint), while the back half is expected to be pressured (≈$70M lower net sales year‑over‑year at the midpoint, with >$50M of that from fewer product launches and rationalizations and a ~$12M EBITDA headwind from lower dividend income). Other metrics: capex $35–$40M, repurchased $79M of stock in the first 4 months under a $200M program with $125M remaining, paid off $258M of convertible notes May 1, ended Q1 with $500M cash, $474M debt and total liquidity of $996M (up $224M YoY), and expect adjusted EBITDA growth to generally flow through to additional free cash flow though no specific FCF guide was provided.Callaway Golf Financial Statement Overview
Summary
Income Statement
52
Neutral
Balance Sheet
58
Neutral
Cash Flow
66
Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 3.10B | 2.06B | 4.24B | 4.28B | 4.00B | 3.13B |
| Gross Profit | 1.77B | 867.60M | 2.65B | 2.65B | 2.41B | 1.86B |
| EBITDA | 368.30M | 172.20M | -973.60M | 484.70M | 477.50M | 622.00M |
| Net Income | 32.70M | 38.80M | -1.45B | 95.00M | 157.90M | 322.00M |
Balance Sheet | ||||||
| Total Assets | 3.18B | 7.29B | 7.64B | 9.12B | 8.59B | 7.75B |
| Cash, Cash Equivalents and Short-Term Investments | 499.50M | 903.20M | 445.00M | 393.50M | 180.20M | 352.20M |
| Total Debt | 675.10M | 1.67B | 4.14B | 4.07B | 3.57B | 4.48B |
| Total Liabilities | 1.06B | 5.22B | 5.23B | 5.24B | 4.82B | 4.06B |
| Stockholders Equity | 2.12B | 2.07B | 2.41B | 3.88B | 3.77B | 3.68B |
Cash Flow | ||||||
| Free Cash Flow | 279.40M | 301.20M | 83.40M | -118.10M | -570.60M | -44.00M |
| Operating Cash Flow | 249.20M | 333.00M | 382.00M | 364.70M | -35.10M | 278.30M |
| Investing Cash Flow | 903.40M | 21.60M | -297.30M | -542.90M | -535.10M | -161.90M |
| Financing Cash Flow | -979.00M | 92.50M | -23.60M | 375.80M | 425.30M | -124.10M |
Callaway Golf Technical Analysis
Positive
15.36
Price Trends
14.57
Positive
14.33
Positive
12.21
Positive
Market Momentum
0.22
Positive
52.14
Neutral
48.47
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 15.36 is above the 20-day moving average (MA) of 15.32, above the 50-day MA of 14.57, and above the 200-day MA of 12.21, indicating a bullish trend. The MACD of 0.22 indicates Positive momentum. The RSI at 52.14 is Neutral, neither overbought nor oversold. The STOCH value of 48.47 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 |
|---|---|---|---|---|---|---|---|
78 Outperform | $2.44B | 27.43 | 14.09% | 0.79% | 9.47% | 18.45% | |
72 Outperform | $451.50M | 12.84 | -3.57% | 3.22% | 17.59% | 68.88% | |
71 Outperform | $3.43B | 69.50 | 22.54% | ― | 3.16% | -4.60% | |
70 Outperform | $2.76B | 6.85 | 1.43% | ― | -25.98% | 80.02% | |
61 Neutral | $18.38B | 12.79 | -2.54% | 3.03% | 1.52% | -15.83% | |
58 Neutral | $5.18B | 17.18 | 20.87% | 1.15% | 6.34% | -21.30% | |
42 Neutral | $253.90M | -77.46 | 14.36% | ― | -5.80% | 32.11% |
* Consumer Cyclical Sector Average
CALY
Callaway Golf
15.38
9.13
146.08%
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XPOF
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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.