Callaway Golf manufactures and sells golf clubs and golf balls, and sells golf accessories, under the Callaway Golf and Odyssey brands worldwide. The company was founded in 1982 and is based in Carlsbad, California.
ELY Price Forecast Based on DCF Valuation
DCF Fair Value Target:
Below please find a table outlining a discounted cash flow forecast for ELY, in which we model out valuation assuming a variety of terminal growth rates. To summarize, we found that Callaway Golf Co ranked in the 41th percentile in terms of potential gain offered. Our DCF analysis suggests the stock is overvalued by about 24%. As for the metrics that stood out in our discounted cash flow analysis of Callaway Golf Co, consider:
Callaway Golf Co's effective tax rate, as measured by taxes paid relative to net income, is at 0 -- greater than just 0% of US stocks with positive free cash flow.
Callaway Golf Co's interest coverage rate -- a measure of gross earnings relative to interest payments -- comes in at -1.56. This coverage rate is greater than that of merely 18.73% of stocks we're observing for the purpose of forecasting via discounted cash flows.
The weighted average cost of capital for the company is 12. This value is greater than 72.14% stocks in the Consumer Cyclical sector that generate free cash flow.
Terminal Growth Rate in Free Cash Flow
Return Relative to Current Share Price
For other companies in the Consumer Cyclical that have a similar discounted cashflow valuation profile (and ensuing price forecasts) as ELY, try CMCSA, AXL, BSET, CCK, and SGMS.
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