The bullish thesis on Topgolf Callaway Brands Corp. by Dominick D’Angelo highlights the potential upside in the remain‑co post the spin-off of its TopGolf Entertainment business. The company’s share price was $9.12 on September 4th, with trailing and forward P/E ratios of 98.91 and 156.25 respectively. The remain‑co trades at 5× 2027 EPS of $1.57 and 1.2× EV/Sales, offering substantial upside potential.

The upcoming spin-off of TopGolf Entertainment presents an attractive investment opportunity in the core golf business of Callaway. The company benefits from COVID-era demand tailwinds, an impending club replacement cycle, and increased golf participation among women and juniors. TopTracer technology provides a high-margin recurring revenue stream, with opportunities for growth and pricing power. The recent Jack Wolfskin sale enhances financial flexibility, while strong market positioning and consumer demand for core brands are observed.

Despite risks such as elevated retailer inventories and potential delays in the spin-off, the remain‑co’s earnings power and free cash flow offer compelling upside potential of 70%–125% over the next two to three years. Callaway’s core business delivers attractive value, a clean deleveraging path, and significant upside optionality in the golf and active-lifestyle sectors. Previous coverage in September 2024 emphasized the separation of TopGolf and strong performance of golf equipment and apparel segments.

Read more at Yahoo Finance: Topgolf Callaway Brands Corp. (MODG): A Bull Case Theory