Topgolf Callaway Brands (US:MODG) ZACKS·2026-01-07 16:20Core Insights - Shares of Topgolf Callaway Brands Corp. (MODG) have surged 45.1% compared to the industry and S&P 500's growth of 1.1% and 3.4% respectively [1] - The company reported better-than-expected results in Q3 2025, driven by a rebound in Topgolf traffic and positive same-venue sales [2] Performance Highlights - Topgolf's same-venue sales turned positive, with high-teens traffic growth in the core 1-2 bay segment due to value-driven initiatives [7][8] - The Golf Equipment segment also showed strong performance, with revenue growth despite fewer major product launches [9] - Overall, Topgolf Callaway's shares have outperformed other companies in the sector, such as Acushnet Holdings Corp. (GOLF) and American Outdoor Brands, Inc. (AOUT), which gained 6.1% and 2% respectively [3] Factors Supporting Growth - Management emphasized a return to positive same-venue sales and strong execution in the Golf Equipment segment, which contributed to the operational turnaround [7][10] - The company raised its full-year revenue and EBITDA guidance, indicating confidence in sustained traffic trends and cost controls [11] - Improved balance sheet metrics, including reduced net leverage and strengthened free cash flow, further supported investor confidence [11] Valuation Metrics - MODG is currently trading at a forward 12-month price-to-sales (P/S) ratio of 0.62, which is lower than industry peers like Acushnet Holdings and American Outdoor, trading at P/S ratios of 1.96 and 0.52 respectively [12] Earnings Estimates - The Zacks Consensus Estimate for MODG's 2026 loss has narrowed in the past 60 days, indicating improving expectations [15] Conclusion - Topgolf Callaway presents an attractive investment opportunity as its core business shows demand recovery, supported by strong brand performance in the Golf Equipment segment and disciplined cost management [16]