DB:CLY

Stock Analysis Report

Executive Summary

Callaway Golf Company, together with its subsidiaries, designs, manufactures, and sells golf clubs, golf balls, golf bags, and other golf-related accessories.


Snowflake Analysis

Mediocre balance sheet with limited growth.


Similar Companies

Share Price & News

How has Callaway Golf's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: CLY has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

0%

CLY

3.8%

DE Leisure

0.06%

DE Market


1 Year Return

33.3%

CLY

26.6%

DE Leisure

14.8%

DE Market

Return vs Industry: CLY exceeded the German Leisure industry which returned 26% over the past year.

Return vs Market: CLY exceeded the German Market which returned 17.1% over the past year.


Shareholder returns

CLYIndustryMarket
7 Day0%3.8%0.06%
30 Day5.3%7.2%1.8%
90 Day7.7%21.9%7.1%
1 Year33.6%33.3%30.3%26.6%18.4%14.8%
3 Year89.1%87.6%82.3%66.0%17.4%7.0%
5 Year185.7%181.1%125.8%95.8%27.9%10.4%

Price Volatility Vs. Market

How volatile is Callaway Golf's share price compared to the market and industry in the last 5 years?


Simply Wall St News

No news available

Valuation

Is Callaway Golf undervalued compared to its fair value and its price relative to the market?

25.96x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: CLY (€20) is trading above our estimate of fair value (€12.56)

Significantly Below Fair Value: CLY is trading above our estimate of fair value.


Price To Earnings Ratio

PE vs Industry: CLY is poor value based on its PE Ratio (25.6x) compared to the Leisure industry average (16.8x).

PE vs Market: CLY is poor value based on its PE Ratio (25.6x) compared to the German market (20.6x).


Price to Earnings Growth Ratio

PEG Ratio: CLY is poor value based on its PEG Ratio (1.5x)


Price to Book Ratio

PB vs Industry: CLY is overvalued based on its PB Ratio (2.6x) compared to the XE Leisure industry average (2.2x).


Next Steps

Future Growth

How is Callaway Golf forecast to perform in the next 1 to 3 years based on estimates from 12 analysts?

17.0%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: CLY's forecast earnings growth (17% per year) is above the savings rate (-0.4%).

Earnings vs Market: CLY's earnings (17% per year) are forecast to grow faster than the German market (13.2% per year).

High Growth Earnings: CLY's earnings are forecast to grow, but not significantly.

Revenue vs Market: CLY's revenue (4.2% per year) is forecast to grow slower than the German market (4.8% per year).

High Growth Revenue: CLY's revenue (4.2% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: CLY's Return on Equity is forecast to be low in 3 years time (14.1%).


Next Steps

Past Performance

How has Callaway Golf performed over the past 5 years?

29.7%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: CLY has high quality earnings.

Growing Profit Margin: CLY's current net profit margins (5.1%) are lower than last year (9.1%).


Past Earnings Growth Analysis

Earnings Trend: CLY's earnings have grown significantly by 29.7% per year over the past 5 years.

Accelerating Growth: CLY's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: CLY had negative earnings growth (-29.6%) over the past year, making it difficult to compare to the Leisure industry average (-5.6%).


Return on Equity

High ROE: CLY's Return on Equity (10.3%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Callaway Golf's financial position?


Financial Position Analysis

Short Term Liabilities: CLY's short term assets ($731.8M) exceed its short term liabilities ($407.9M).

Long Term Liabilities: CLY's short term assets ($731.8M) exceed its long term liabilities ($674.4M).


Debt to Equity History and Analysis

Debt Level: CLY's debt to equity ratio (73.8%) is considered high.

Reducing Debt: CLY's debt to equity ratio has increased from 32% to 73.8% over the past 5 years.

Debt Coverage: CLY's debt is not well covered by operating cash flow (6.1%).

Interest Coverage: CLY's interest payments on its debt are well covered by EBIT (4.3x coverage).


Balance Sheet

Inventory Level: CLY has a high level of physical assets or inventory.

Debt Coverage by Assets: CLY's debt is covered by short term assets (assets are 1.3x debt).


Next Steps

Dividend

What is Callaway Golf's current dividend yield, its reliability and sustainability?

0.18%

Current Dividend Yield


Dividend Yield vs Market

company0.2%marketbottom25%1.4%markettop25%3.5%industryaverage2.5%forecastin3Years0.3%

Current dividend yield vs market & industry

Notable Dividend: CLY's dividend (0.18%) isn’t notable compared to the bottom 25% of dividend payers in the German market (1.38%).

High Dividend: CLY's dividend (0.18%) is low compared to the top 25% of dividend payers in the German market (3.53%).


Stability and Growth of Payments

Stable Dividend: CLY is not paying a notable dividend for the German market, therefore no need to check if payments are stable.

Growing Dividend: CLY is not paying a notable dividend for the German market, therefore no need to check if payments are increasing.


Current Payout to Shareholders

Dividend Coverage: CLY is not paying a notable dividend for the German market.


Future Payout to Shareholders

Future Dividend Coverage: No need to calculate the sustainability of CLY's dividend in 3 years as they are not forecast to pay a notable one for the German market.


Next Steps

Management

What is the CEO of Callaway Golf's salary, the management and board of directors tenure and is there insider trading?

7.2yrs

Average management tenure


CEO

Chip Brewer (55yo)

7.8yrs

Tenure

US$6,229,556

Compensation

Mr. Oliver G. Brewer, III, also known as Chip, has been the President and Chief Executive Officer at Callaway Golf Company. since March 5, 2012. Mr. Brewer served as the Chief Executive Officer of Adams Go ...


CEO Compensation Analysis

Compensation vs Market: Chip's total compensation ($USD6.23M) is above average for companies of similar size in the German market ($USD1.50M).

Compensation vs Earnings: Chip's compensation has increased by more than 20% whilst company earnings have fallen more than 20% in the past year.


Management Age and Tenure

7.2yrs

Average Tenure

54.5yo

Average Age

Experienced Management: CLY's management team is seasoned and experienced (7.2 years average tenure).


Board Age and Tenure

10.4yrs

Average Tenure

66.5yo

Average Age

Experienced Board: CLY's board of directors are seasoned and experienced ( 10.4 years average tenure).


Insider Trading

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

Buy€2,009,71913 Jun 19
James Lillie
EntityIndividual
Shares150,000
Max Price€13.40
Buy€180,54513 Jun 19
Cynthia Davis
EntityIndividual
Shares13,333
Max Price€13.54
Buy€1,398,20513 Jun 19
Roger Farah
EntityIndividual
Shares100,000
Max Price€13.98
Buy€013 Jun 19
JANA Partners LLC
EntityCompany
Shares8,671,810
Max Price€14.22
Buy€66,04323 May 19
Russell Fleischer
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares5,000
Max Price€13.21
Buy€89,04421 May 19
Brian Lynch
EntityIndividual
Role
Chief Financial Officer
Executive VP & CFO
Shares6,575
Max Price€13.54
Buy€135,51821 May 19
Oliver Brewer
EntityIndividual
Role
Chief Executive Officer
President
Shares10,000
Max Price€13.55
Buy€68,48713 Feb 19
Russell Fleischer
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares5,000
Max Price€13.70

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Management Team

  • Chip Brewer (55yo)

    President

    • Tenure: 7.8yrs
    • Compensation: US$6.23m
  • Chris Carroll

    Senior Vice President of Global Human Resources

    • Brian Lynch (57yo)

      Executive VP & CFO

      • Tenure: 2.8yrs
      • Compensation: US$1.53m
    • Neil Howie (56yo)

      MD & President of Europe

      • Tenure: 8.5yrs
      • Compensation: US$1.06m
    • Richard Arnett (48yo)

      Executive Vice President of Global Marketing & Callaway Brands

      • Tenure: 4yrs
      • Compensation: US$1.36m
    • Mark Leposky (54yo)

      Executive Vice President of Global Operations

      • Tenure: 7.8yrs
      • Compensation: US$1.29m
    • Alan Hocknell (47yo)

      Senior Vice President of Research & Development

      • Tenure: 10.4yrs
      • Compensation: US$1.19m
    • Jennifer Thomas (43yo)

      VP & Chief Accounting Officer

      • Tenure: 6.7yrs
    • Patrick Burke

      Vice President of Finance & Investor Relations

      • Glenn Hickey (57yo)

        Executive Vice President of Callaway Golf

        • Tenure: 1yrs

      Board Members

      • Samuel Armacost (80yo)

        Independent Director

        • Tenure: 16.8yrs
        • Compensation: US$193.63k
      • John Lundgren (68yo)

        Independent Director

        • Tenure: 10.8yrs
        • Compensation: US$191.13k
      • Tony Thornley (72yo)

        Independent Director

        • Tenure: 15.8yrs
        • Compensation: US$178.63k
      • Chip Brewer (55yo)

        President

        • Tenure: 7.8yrs
        • Compensation: US$6.23m
      • Russ Fleischer (51yo)

        Independent Director

        • Tenure: 1.7yrs
        • Compensation: US$152.26k
      • John Cushman (78yo)

        Independent Director

        • Tenure: 16.8yrs
        • Compensation: US$178.63k
      • Ron Beard (80yo)

        Independent Chairman of the Board

        • Tenure: 14.4yrs
        • Compensation: US$218.63k
      • Bayo Ogunlesi (65yo)

        Independent Director

        • Tenure: 10yrs
        • Compensation: US$188.63k
      • Linda Segre (59yo)

        Independent Director

        • Tenure: 4.4yrs
        • Compensation: US$178.63k
      • Laura Flanagan (51yo)

        Independent Director

        • Tenure: 1.2yrs
        • Compensation: US$110.05k

      Company Information

      Callaway Golf Company's company bio, employee growth, exchange listings and data sources


      Key Information

      • Name: Callaway Golf Company
      • Ticker: CLY
      • Exchange: DB
      • Founded: 1982
      • Industry: Leisure Products
      • Sector: Consumer Durables
      • Market Cap: US$2.075b
      • Listing Market Cap: US$1.871b
      • Shares outstanding: 94.11m
      • Website: https://www.callawaygolf.com

      Number of Employees


      Location

      • Callaway Golf Company
      • 2180 Rutherford Road
      • Carlsbad
      • California
      • 92008
      • United States

      Listings

      TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
      ELYNYSE (New York Stock Exchange)YesCommon StockUSUSDFeb 1992
      CLYDB (Deutsche Boerse AG)YesCommon StockDEEURFeb 1992

      Biography

      Callaway Golf Company, together with its subsidiaries, designs, manufactures, and sells golf clubs, golf balls, golf bags, and other golf-related accessories. The company operates through three segments: Golf Clubs; Golf Balls; and Gear, Accessories and Other. The Golf Clubs segment provides golf drivers and fairway woods, hybrids, irons and wedges, putters, packaged sets, and pre-owned golf clubs. The Golf Balls segment designs, manufactures, and sells golf balls. The Gear, Accessories and Other segment offers golf apparel and footwear, headwear, and other lifestyle and golf-related apparel products, as well as golf bags, golf gloves, travel gears, gears, personal storage gears, and accessories. The company sells its products through golf retailers, sporting goods retailers, mass merchants, Internet retailers, department stores, field representatives, and in-house sales representatives, as well as to third-party distributors in the United States and approximately 100 countries. Callaway Golf Company sells its products under the Callaway Golf, Odyssey, Strata, OGIO, and TravisMathew brand names. It also sells pre-owned golf products through its Website, callawaygolfpreowned.com; and Callaway Golf and Odyssey products through its Websites callawaygolf.com, odysseygolf.com, ogio.com, and travismathew.com. The company was founded in 1982 and is based in Carlsbad, California. 


      Company Analysis and Financial Data Status

      All financial data provided by Standard & Poor's Capital IQ.
      DataLast Updated (UTC time)
      Company Analysis2020/01/17 21:12
      End of Day Share Price2020/01/17 00:00
      Earnings2019/09/30
      Annual Earnings2018/12/31


      Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.