Topgolf Callaway: Why Investors Should Take A Swing

Summary

• Topgolf and Callaway will separate into two independent companies, potentially unlocking value. Callaway will focus on golf equipment, while Topgolf will operate as a debt-free entertainment brand.
• The stock has plunged 84% since its peak, largely due to the challenges of merging golf equipment manufacturing with entertainment. However, at $6 per share it is undervalued.
• Callaway is positioned for stable growth with its premium golf gear and Toptracer technology, while Topgolf presents a higher-risk, high-reward opportunity through international expansion and innovation.
• The split provides clarity for both businesses, making Callaway a safer bet and Topgolf a speculative growth play. At current levels, the stock is a strong buy.

Joe Hendrickson/iStock Editorial via Getty Images

Topgolf Callaway (NYSE: NYSE:MODG) has long been a powerhouse in the golf industry, blending tradition with modern entertainment. Yet, despite its strong brand recognition, the stock has recently underperformed, leaving many investors questioning its potential.

Analyst’s Disclosure:I/we have a beneficial long position in the shares of MODG either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.