Is Topgolf Callaway (MODG) stock a good buy?

• Founded: Topgolf was founded in 2000, and Callaway Golf Company was founded in 1982.
• Topgolf Founders: Brothers Steve and Dave Jolliffe started Topgolf in Watford, UK.
• Callaway Founder: Ely Reeves Callaway Jr. started Callaway Golf Company in Carlsbad, California.
• Topgolf Concept: Revolutionized golf entertainment with a blend of driving range and interactive games.
• Growth: Expanded to over 70 locations worldwide, attracting millions of visitors annually.
• Callaway Products: Known for high-quality golf clubs, balls, bags, apparel, and accessories.
• Merger: In 2021, Callaway Golf acquired Topgolf, creating a leading global golf entertainment and equipment company.
• Innovation: Combines Topgolf’s tech-driven entertainment with Callaway’s cutting-edge golf equipment.
• Global Reach: Presence in the USA, UK, Australia, Mexico, and more, with plans for further international expansion.
• Experiences: Topgolf venues offer climate-controlled hitting bays, food, drinks, and events, appealing to golfers and non-golfers alike.
• Technology: Utilizes advanced tracking technology to enhance the golf experience at Topgolf venues.
• Market Position: Strengthens Callaway’s position as a leader in the golf industry by merging sports equipment with entertainment.
• Mission: To inspire more people to enjoy the game of golf through innovative products and engaging experiences.
• Customer Engagement: Focuses on creating memorable experiences and fostering a community of golf enthusiasts.
• Sustainability: Committed to sustainable practices in both product development and operations.

2. MOS (Margin of Safety)

When investing in a company, the first step is to look at the financials. Fortunately, Tykr does this for us automatically. The higher the score, the stronger the financials and the safer the investment. The higher the MOS, the higher the potential returns you can make.

• Summary: Overpriced
• Score: 22
• MOS: 1%

To see the most up-to-date Summary, Score, and MOS, please log into Tykr.

3. Meaning

When investing in a company, it’s important to know how a company makes money. A mature business model has multiple streams of revenue which allow the company to weather downturns in the economy.

Here is how Topgolf Callaway (MODG) makes money:

• Entertainment Revenue: Earns income from customers visiting Topgolf venues, paying for golfing games, food, and beverages.
• Membership Fees: Generates revenue from memberships, offering perks such as discounts, priority booking, and exclusive events.
• Event Hosting: Hosts corporate events, parties, and tournaments at Topgolf venues, earning fees for venue rental and services.
• Merchandise Sales: Sells branded merchandise, including apparel, accessories, and golf equipment, at Topgolf locations and online.
• Food and Beverage Sales: Generates income from food and beverage sales at Topgolf venues, offering a variety of menu items and drinks.
• Technology Services: Offers technology solutions for golf entertainment, such as interactive games, scoring systems, and mobile apps, earning licensing fees.
• Advertising and Sponsorship: Earns revenue from advertising placements and sponsorships with brands seeking exposure to Topgolf’s audience.
• Golf Equipment Sales: Benefits from synergies with Callaway Golf, selling golf clubs, balls, bags, and accessories through Topgolf venues and online channels.
• Corporate Partnerships: Forms partnerships with companies for co-branded events, promotions, and product placements, generating additional revenue streams.
• Gaming and Virtual Reality: Expands revenue opportunities through gaming and virtual reality experiences offered at Topgolf venues.
• International Expansion: Expands revenue streams by opening new Topgolf venues in international markets and partnering with local investors and operators.
• Digital Subscriptions: Offers premium digital content, tutorials, and online lessons for golf enthusiasts, generating subscription revenue.

4. Moat

When investing in a company, it’s important to understand how a company ranks against other companies in the same sector and industry. Based on the Score, here is how Topgolf Callaway stacks up against other companies.

1. Planet Fitness, Inc.(PLNT) – 89
2. YETI Holdings, Inc.(YETI) – 67
3. Acushnet Holdings Corp. (GOLF) – 61
4. Xponential Fitness, Inc.(XPOF) – 56
5. Carnival Corporation & plc. (CUK) – 50
6. Topgolf Callaway (MODG) – 22

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5. Management

When investing in a company, it’s important to understand who the CEO is, what they have accomplished in the past, and how they have helped this company grow. Good leaders typically have stronger cultures, less turnover, and better returns in the stock market.

6. 4M Score

All of our homework on this company leads up to the 4M Score. A lot of investors only look at the numbers. Yes, it’s important to look at the first M (MOS) which is the math part of investing but it’s also important to look past the numbers and also look at the Meaning, Moat, and Management. If all 4Ms pass, we should have high confidence in buying this stock.

What 4M score are we going for?

• 80-100 = High confidence – Yay! You should have high confidence buying this stock. It passes all 4M!
• 60-79 = Moderate confidence – Alert! There may be better stocks in the market. Only buy this stock if you truly believe the company will improve!
• 0-59 = Low confidence – Warning! There are better stocks in the market. Due to the low score, you should consider looking at other stocks.

👉 The 4M Score of Topgolf Callaway (MODG) is 38/100.

To see the most up-to-date 4M Score, please log into Tykr.

7. Is Topgolf Callaway (MODG) stock a good buy?

Some of the top questions investors can have is Topgolf Callaway (MODG) stock a good buy or should I buy Topgolf Callaway (MODG) stock?

Topgolf Callaway could be a good investment for several reasons. The company combines Callaway’s strong golf equipment brand with Topgolf’s popular entertainment venues, creating a diverse revenue stream. The demand for outdoor and socially engaging activities, like Topgolf, has grown, boosting potential profits. Additionally, Callaway’s acquisition of Topgolf shows strategic growth and adaptation to changing market trends.

However, there are also risks. The entertainment industry can be volatile, and Topgolf’s success depends on maintaining its appeal and managing high operational costs. Economic downturns could impact discretionary spending on entertainment, affecting revenue. Overall, while Topgolf Callaway shows promise with its unique market position, it also faces challenges that could impact its investment potential.