Callaway Golf Company Common Stock (CALY)

FairStock Score: 28/100 — RISKY

Key Financials

Strengths

• Established organization with 28,000 employees providing operational scale

Concerns

• Trades significantly above Graham Number ($7) with negative 108% margin of safety—limited downside protection
• Currently unprofitable—sustained losses could lead to dilutive capital raises or balance sheet deterioration
• Revenue declining at 216.5% year-over-year signals potential demand weakness or market share loss
• Altman Z-Score of 0.2 places it in the financial distress zone—elevated bankruptcy risk

AI Analysis

Callaway Golf Company Common Stock is a small-cap consumer cyclical company valued at $2.8 billion. Revenue stands at $2.1 billion, though the company is currently unprofitable. From a quality standpoint, Callaway shows distressed Altman Z-Score of 0.2 warrants caution and modest 2% ROE. On valuation, the stock is commanding a steep 72.1x multiple, with trades far above its Graham Number ($7) with no margin of safety. Growth dynamics show revenue growing at -216.5% and profit growth of 72.4%. Our composite FairStock Score of 28/100 reflects below-average fundamentals overall. Without profitability, this remains speculative—suitable only for those with high risk tolerance and a long time horizon.

Bull Case

Improving fundamentals and sector tailwinds could drive meaningful earnings growth, compressing the effective multiple for patient investors. Operational leverage in the business model means incremental revenue growth could disproportionately boost bottom-line profitability.

Bear Case

At 72x earnings, any growth disappointment triggers rapid multiple compression—a 20% earnings miss plus multiple contraction to 20x implies 40%+ downside. Regulatory changes, input cost inflation, or demand normalization represent underappreciated risks that could materially impact forward estimates.

Data from SEC filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer