Callaway Story

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ELY -- USA Stock  

USD 20.41  0.79  4.03%

As many millenniums are trying to avoid consumer cyclical space, it makes sense to break down Callaway Golf a little further and try to understand its current market patterns. We will evaluate why we are still confident in anticipation of a recovery. Is the stock valuation justified? Here we go over Callaway Golf perspective on valuation to give you a better outlook on taking a position in this stock.
Published over a month ago
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Should I rely on Callaway Golf management in November 2020?
Callaway Golf has 915.59 M in debt with debt to equity (D/E) ratio of 1.47, which is OK given its current industry classification. The entity has a current ratio of 2.4, demonstrating that it is liquid and is capable to disburse its financial commitments when the payables are due. The asset utilization indicator refers to the revenue earned for every dollar of assets a company currently reports. Callaway Golf has an asset utilization ratio of 234.47 percent. This suggests that the company is making $2.34 for each dollar of assets. An increasing asset utilization means that Callaway Golf is more efficient with each dollar of assets it utilizes for everyday operations.
We determine the current worth of Callaway Golf using both absolute as well as relative valuation methodologies to arrive at its intrinsic value. In general, an absolute valuation paradigm, as applied to this company, attempts to find the value of Callaway Golf based exclusively on its fundamental and basic technical indicators. By analyzing Callaway Golf's financials, quarterly and monthly indicators, and related drivers such as dividends, operating cash flow, and various types of growth rates, we attempt to find the most accurate representation of Callaway Golf's intrinsic value. In some cases, mostly for established, large-cap companies, we also incorporate more traditional valuation methods such as dividend discount, discounted cash flow, or asset-based models. As compared to an absolute model, our relative valuation model uses a comparative analysis of Callaway Golf. We calculate exposure to Callaway Golf's market risk, different technical and fundamental indicators, relevant financial multiples and ratios, and then comparing them to Callaway Golf's related companies.

Callaway Golf Investment Alerts

Callaway investment alerts and warnings help investors to get more proficient at understanding not only critical technical and fundamental signals but also the significant portfolio-centered indicators. These indicators include beta, alpha, and other risk-related measures that will help you in monitoring Callaway Golf performance across your portfolios.Please check all investment alerts for Callaway

Callaway Golf Valuation Ratios as Compared to Competition

Our valuation model uses many indicators to compare Callaway value to that of its competitors to determine the firm's financial worth. You can analyze the relationship between different fundamental ratios across Callaway Golf competition to find correlations between indicators driving the intrinsic value of Callaway.

What do experts say?

Stock analysis is a method for investors and traders to make buying and selling decisions. By studying and evaluating past and current data, investors and traders attempt to gain an edge in the markets by making informed decisions. It is good to see analyst projects for Callaway Golf, but it might be worth checking our own buy vs. sell analysis

Exercise or conversion by Laura Flanagan of 5889 shares of Callaway Golf subject to Rule 16b-3

Legal trades by Callaway Golf insiders are very common, as founders, directors, or employees of any publicly traded firm often have stock or stock options. These trades are made public in the United States through the filing of Form 4 of the Securities and Exchange Commission. Below entry was recorded recently and is publicly available as an insider trade:
Callaway insider trading alert for exercise of common stock by Laura Flanagan, the corporate stakeholder, on 23rd of August 2020. This event was filed by Callaway Golf Co with SEC on 2020-05-08. Statement of changes in beneficial ownership - SEC Form 4 [view details]   
Note, although insider trading is legal, in the United States, Canada, Australia, and Germany, for mandatory reporting purposes, corporate insiders are defined as a company's officers, directors, and any beneficial owners of more than 10% of a class of the company's equity securities.

Breaking down Callaway Golf Indicators

The firm reported the last year's revenue of 1.48 B. Reported Net Loss for the year was (136.96 M) with profit before taxes, overhead, and interest of 766.79 M.

Margins Breakdown

Callaway profit margins show the degree to which it makes money. Margin indicators are used not only by investors but also by creditors or Callaway Golf itself as indicators of financial health and management effectiveness. Please look more closely at the different varieties of Callaway Golf profit margins.
Operating Margin8.42
EBITDA Margin0.13
Gross Margin0.47
Profit Margin0.0507

Callaway Golf Earnings Before Interest Taxes and Depreciation Amortization USD is increasing over the last 8 years. Moreover, Callaway Golf Earnings Before Interest Taxes and Depreciation Amortization EBITDA is fairly stable at the moment.

Callaway Golf has 62 percent chance to slide under $19.69 in the coming weeks

Callaway Golf current downside variance rises over 8.19. Callaway Golf currently demonstrates below-verage downside deviation. It has Information Ratio of 0.0 and Jensen Alpha of 0.04. However, we do advice investors to further question Callaway Golf expected returns to ensure all indicators are consistent with the current outlook about its relatively low value at risk.

The Bottom Line

While other entities within the leisure industry are still a little expensive, even after the recent corrections, Callaway Golf may offer a potential longer-term growth to investors. To conclude, as of the 23rd of October 2020, our actual 30 days 'Buy-vs-Sell' recommendation on the company is Hold. We believe Callaway Golf is currently fairly valued with low odds of financial distress for the next two years.

About Contributor

This story should be regarded as informational only and should not be considered a solicitation to sell or buy any financial products. Macroaxis does not express any opinion as to the present or future value of any investments referred to in this post. This post may not be reproduced without the consent of Macroaxis LLC. Macroaxis LLC and Gabriel Shpitalnik do not own shares of Callaway Golf. Please refer to our Terms of Use for any information regarding our disclosure principles.

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