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Highlights

  • MODG's revenue soared from USD 1.7 billion in 2019 to USD 4.3 billion by 2023
  • Gross profit for MODG rose from USD 766.8 million to USD 2.65 billion over the same period
  • MODG's gross margin improved significantly from 45.08% in 2019 to 61.94% in 2023
  • In Q1 FY24, MODG achieved a gross margin of 60.3% and an EBITDA margin of 12.2%, surpassing industry averages

Topgolf Callaway Brands Corp. (NYSE: MODG), a golf and active lifestyle company, has a market capitalization of USD 2.89bn. Its segments include Golf Equipment, Topgolf, and Active Lifestyle.

From 2019 to 2023, MODG has been achieving significant revenue growth, increasing from USD 1,701.1 million to USD 4,284.8 million. During this period, the company's gross profit also rose from USD 766.8 million to USD 2,654.1 million. This improvement led to an impressive increase in MODG's gross margin, which went from 45.08% in 2019 to 61.94% in 2023, demonstrating enhanced efficiency and profitability over the years.

In Q1 FY24, MODG achieved a gross margin of 60.3%, surpassing the industry average of 42.9%. This indicates effective cost management and pricing strategies by MODG. Additionally, MODG's EBITDA margin for the same period was 12.2%, slightly higher than the industry median of 11.8%, showcasing strong operational performance despite market challenges.

Recent business update

As per the company’s announcement dated July 15 2024, one of its brands Callaway Golf has introduced the Opus and Opus Platinum Wedges, featuring the innovative Spin Gen Face TechnologyTM for exceptional spin and control.

Company outlook

For 2024, the company forecasts consolidated net revenues between USD 4,435 million and USD 4,475 million. Topgolf revenue is estimated at around USD 1,960 million. Consolidated adjusted EBITDA is projected to be between USD 620 million and USD 640 million, while Topgolf adjusted EBITDA is expected to be around USD 350 million. Non-GAAP diluted earnings per share are anticipated to range from USD 0.31 to USD 0.39, with approximately 200 million diluted shares outstanding.

Top 10 shareholders

Approximately 60.72% of MODG's total shareholding is held by its top 10 shareholders. Providence Equity Partners LLC., holds the largest stake in the company, at approximately 11.54%, followed by BlackRock Institutional Trust Company, N.A.  with about 11.45% stake.

Stock performance

Over the past three months, the stock has delivered a modest return of 0.44%, while over the last six months, it has achieved a more substantial return of 17.46%. Currently, the stock is trading at the upper end of its 52-week range, which spans from a low of USD 9.84 to a high of USD 20.14.

Note 1: Past performance is not a reliable indicator of future performance.

Note 2: The reference date for all price data, currency, technical indicators, support, and resistance levels is July 17, 2024. The reference data in this report has been partly sourced from EODHD/Others.