There aren't many stocks that have survived the selling onslaught during the 2022 bear market. Many stocks deserved these price cuts because of their absurdly high valuation multiples and/or uncertain business models. However, investors have thrown out the proverbial baby with the bath water when selling stocks this year.
Golf conglomerate Topgolf Callaway Brands (MODG 2.17%) is one of these companies (it is down 25% this year), and it now trades at a cheap valuation. Here's why Topgolf Callaway is an easy buy for investors looking to hold for many years.
In early 2021, Callaway completed its merger with Topgolf, an innovative driving range and entertainment concept that is rapidly growing across the United States. Topgolf locations offer a fun atmosphere for golfers of all skill ranges, along with serving food and drinks, providing a perfect venue for parties and group events. Last quarter the segment did $414 million in revenue even though there are less than 100 locations open around the world.
With so few locations, Topgolf Callaway has an opportunity to open tons of new venues this decade. Management plans to open around 10 new venues a year (11 are slated to open in 2022) for the foreseeable future. Topgolf is also seeing strong growth from its existing venues, with same-store sales up 11% last quarter vs. 2019. 2020 and 2021 were tough periods for Topgolf, with customer volumes down due to the COVID-19 pandemic, and are not good comparisons for a normalized operating environment.
Topgolf will soon be doing $2 billion in revenue a year. If it can double its venue count sometime this decade while also achieving consistent same-store sales growth, the segment looks to be well on its way to hitting $5 billion in annual revenue before 2030. Assuming it can hit a 10% profit margin, that equates to $500 million in annual profits for Topgolf Callaway.
Outside of Topgolf, there is the namesake Callaway golf equipment brand, and a few apparel brands that the company has acquired over the years. The golf equipment business is steady but not a fast grower, with revenue only up 2.5% year-over-year last quarter. However, it does have solid profit margins, which allowed it to achieve just shy of $50 million in operating income last quarter. Over the first nine months of 2022, the Callaway equipment segment brought in $250 million in operating income.
Right now, Topgolf Callaway has a market capitalization of $3.8 billion. Adding back net debt of $1.54 billion, the stock currently trades at an enterprise value (EV) of $5.34 billion. Compared to its net income of $204 million, the stock trades at a trailing EV-to-earnings (EV/E) of 26, which is slightly above the market average. The company is also burning tons of free cash flow due to its heavy investments to grow the Topgolf segment.
But investors shouldn't look at Topgolf Callaway's earnings multiple in a vacuum. Management is still investing heavily for growth at the moment, which is depressing earnings. If you combine the potential earnings power of Topgolf, the equipment business, and the active apparel brands, Topgolf Callaway has an potential road to generating over $1 billion in annual profits sometime this decade.
MerchandiseThe Golf Shop at Paxon Hollow stocks a wide variety of Apparell and Accessories to help you to play your best golf, and look good doing it. We carry some of the most popular brands in golf and several very good value brands.
When it comes to your new Yamaha golf car, using Yamaha Genuine Parts and Accessories ensures they run the same as day one. In fact, the same team of engineers that designed your Yamaha golf car worked hand-in-hand with Yamaha product planners to guarantee our accessories look right, fit right and perform right.
Golf Car Specialties provides a level of customer service that I have never experienced with a golf car company. Their professional and responsive operation is the reason we chose Yamaha Golf Cars for all nine of our facilities.
Fountains has been with Yamaha for over seven years now. We purchased the golf course in 2007, and inherited Yamaha Golf Cars from Boylan. We have had outstanding service. Typically, a cart or two that may have been damaged will be fixed within a couple of days after we call. Your service technician that comes to our golf course, Kevin, is extremely knowledgeable, friendly and cooperative. I would highly recommend Golf Cars + and Yamaha Golf Cars to any facility in need of a new fleet.
I have owned my own golf courses for over the past 25 years. During this time I have owned and leased golf cars from all the major companies in the industry. Joe Ronewicz has provided the best service and follows up far better than anyone else. I am finishing my 6th year with my Yamaha gas cars and they still look brand new and performance is outstanding. I also have over 400 other Yamaha Golf Cars at my other courses that are a mix of electric and gas, with no concerns about reliability.
My name is Justin Cirbo, and I am the PGA General Manager of Spring Valley Golf Club in Elizabeth Colorado. I have the distinct pleasure of doing business with Masek and Yamaha for nearly 15 years. During this time frame, I have come to appreciate working with all aspects if the Masek/Yamaha operation. From their sales force to customer service all the way up to ownership, Yamaha/Masek are truly first class originations. After leasing carts through Yamaha and Masek for over a decade now, we have decided to purchase our first fleet. This was a big decision for our business, but one that was made confidently due to our working relationship and respect for the Masek/Yamaha companies. It has been our privilege working with these companies, and we look forward to continuing this relationship into the future as our business continues to grow. With seamless transition in fleets, I would recommend this company to anyone looking to help their golf cart operation.
Other publicly traded companies in the golf industry include Acushnet Holdings Corp., TaylorMade Golf Company, and Mizuno USA, Inc. It is important to note that the list of publicly traded golf companies may change over time, and it is always a good idea to research and carefully consider any investment before making a decision.
Last year, we created a survey that let disc golfers with the UDisc disc golf app share their opinions on a variety of disc golf topics, and one section focused on disc golf disc brands. Here you can find out how thousands of disc golfers rated the plastic quality, mold consistency, and availability of brands along with other related topics.
When disc golfers talk about \"consistency\" from a manufacturer, they're referring to how much they can rely on new discs of the same mold in the same plastic and weight to fly the same way. This is important when players lose discs or when discs beat in and their flight patterns alter (frequently-used discs tend to get more understable over time).
The pandemic has made it hard for manufacturers to keep discs in stock for two main reasons: 1) The sport saw a huge influx of players during the first year of the pandemic and 2) the pandemic caused supply issues for disc golf companies just like it did for so many other businesses.Because of those conditions, it's worth noting which brands survey takers said they could find most reliably.
Another great way to learn which discs might suit you best is to visit a local disc golf store should you be lucky enough to have one nearby. You can find out using UDisc Stores, an international directory of disc golf shops.We frequently put out posts similar to this one with data and statistics that can help and interest disc golfers along with stories from disc golf communities across the world. Make sure to never miss one by subscribing to our Release Point newsletter.
Located within the clubhouse is the Trump Turnberry Professional Shop. One of the largest of its kind in Europe, the shop is an impressive 3,600 square feet and stocks the latest in golfing apparel.If you are looking for a memento or a souvenir of your time at Trump Turnberry, or are in need of some additional golf wear, then head to the professional shop and choose from branded merchandise from names such as Polo Ralph Lauren, Galvin Green and more. A range of indigenous gifts are also available to purchase. Our friendly and knowledgeable staff are also on hand to assist with any queries you may have about your purchase or golf at Trump Turnberry. Additionally, we are proud to introduce the Turnberry Collection, available for our U.S. customers to purchase at trumpstore.com.All golfers are required to check in here ahead of their round on any of our golf courses.
Gadsden Golf Carts also stocks over 10,000 parts in our Gadsden Warehouse, so give us a call if you are looking for any parts or accessories. We also have a service Center with a full staff of trained technicians to take care of your yearly maintenance and repair needs.
Global Golf Sales, in Cooper City, Fla. (Fort Lauderdale), is the leading golf distributor in the country specializing in golf grips, repair supplies, golf accessories and custom printed items. Global Golf stocks all the major golf grip brands such as Golf Pride, Winn, Super Stroke and Lamkin. Global Golf Sales is your source for Golf Pride Grips and are the only authorized Golf Pride distributor in Florida.
The team at Global Golf Sales is lead by owner, Steve Sponder. Sponder's team is comprised of golfers, and they are there to service the golfers and the golf professionals of Florida. Sponder, an avid golfer himself, teamed up with Marc Rosenbaum, also on staff at Global Golf, to capture the FSGA's Super-Senior Four-Ball Championship in 2018. Two other Global Golf employees, Kasey Denesevich and Scott Jacobs, regularly compete in FSGA and USGA Championships. Denesevich's 2018 season was highlighted by capturing the FSGA's Two-Man Shoot-Out, earning an automatic selection on the Florida Cup South Team, and qualifying in the fall of 2018 for the 2019 USGA Four-Ball Championship. If you need excellent service, one-day in state shipping, and to talk to your peers who both know golf, and know golf supplies, Global Golf Sales is the team to turn to. 59ce067264