As of July 10, 2025, Callaway Golf Co has a Discounted Cash Flow (DCF) derived fair value of $30.03 per share. With the current market price at $21.33, this represents a potential upside of 40.8%.
| Key Metrics | Value |
|---|---|
| DCF Fair Value (5-year) | $19.31 |
| DCF Fair Value (10-year) | $30.03 |
| Potential Upside (5-year) | -9.5% |
| Potential Upside (10-year) | 40.8% |
| Discount Rate (WACC) | 9.6% - 14.5% |
Revenue is projected to grow from $3133 million in 12-2021 to $7204 million by 12-2031, representing a compound annual growth rate of approximately 8.7%.
| Fiscal Year | Revenue (USD millions) | Growth |
|---|---|---|
| 12-2021 | 3133 | 97% |
| 12-2022 | 3541 | 13% |
| 12-2023 | 3720 | 5% |
| 12-2024 | 4184 | 12% |
| 12-2025 | 4662 | 11% |
| 12-2026 | 5276 | 13% |
| 12-2027 | 5761 | 9% |
| 12-2028 | 6145 | 7% |
| 12-2029 | 6515 | 6% |
| 12-2030 | 6861 | 5% |
| 12-2031 | 7204 | 5% |
Net profit margin is expected to improve from 10% in 12-2021 to 18% by 12-2031, driven by operational efficiency and economies of scale.
| Fiscal Year | Net Profit (USD millions) | Profit Margin |
|---|---|---|
| 12-2021 | 322 | 10% |
| 12-2022 | 387 | 11% |
| 12-2023 | 466 | 13% |
| 12-2024 | 587 | 14% |
| 12-2025 | 722 | 15% |
| 12-2026 | 889 | 17% |
| 12-2027 | 985 | 17% |
| 12-2028 | 1067 | 17% |
| 12-2029 | 1148 | 18% |
| 12-2030 | 1226 | 18% |
| 12-2031 | 1305 | 18% |
with a 5-year average of $96 million. Projected CapEx is expected to maintain at approximately 4% of revenue.
Depreciation is based on an average useful life of 5 years for capital assets.
| Fiscal Year | D&A (USD millions) |
|---|---|
| 12-2022 | 121 |
| 12-2023 | 146 |
| 12-2024 | 170 |
| 12-2025 | 203 |
| 12-2026 | 183 |
| 12-2027 | 202 |
Net working capital is expected to increase gradually, with projected changes affecting free cash flow.
| Components | Average Days |
|---|---|
| Days Receivables | 25 |
| Days Inventory | 157 |
| Days Payables | 31 |
| Fiscal Year | EBITDA | Tax | CapEx | Change in NWC | FCF |
|---|---|---|---|---|---|
| 3M/2022 | 106 | 20 | 38 | 52 | (4) |
| 2023 | 537 | 97 | 159 | (39) | 319 |
| 2024 | 687 | 123 | 179 | 32 | 353 |
| 2025 | 859 | 151 | 200 | 94 | 414 |
| 2026 | 1013 | 186 | 226 | 58 | 544 |
| Valuation Method | Fair Price (USD) | Potential Upside |
|---|---|---|
| 5-Year DCF (Growth) | 19.31 | -9.5% |
| 10-Year DCF (Growth) | 30.03 | 40.8% |
| 5-Year DCF (EBITDA) | 24.65 | 15.6% |
| 10-Year DCF (EBITDA) | 32.72 | 53.4% |
Is Callaway Golf Co (ELY) a buy or a sell? Callaway Golf Co is definitely a buy. Based on our DCF analysis, Callaway Golf Co (ELY) appears to be significantly undervalued with upside potential of 40.8%. The company's strong projected growth in revenue and profitability, coupled with consistent capital expenditure, supports our positive outlook on its intrinsic value.
Key investment drivers include:
Investors should consider a strong buy at the current market price of $21.33.