Topgolf Callaway Brands (NYSE:MODG) Shares Gap Up on Earnings Beat

Key Points

• Topgolf Callaway Brands shares experienced a significant increase, opening at $9.71 after closing at $8.79, following a quarterly earnings report that beat expectations.
• The company reported earnings of $0.24 per share, surpassing estimates of $0.03, along with a revenue of $1.11 billion, despite a year-over-year decline of 4.1% in revenue.
• Several analysts have adjusted their price targets for the stock, with the average target now at $10.14, while the stock has received a mix of ratings, including sell, hold, and buy.

Topgolf Callaway Brands Corp. (NYSE:MODG - Get Free Report)'s stock price gapped up prior to trading on Thursday after the company announced better than expected quarterly earnings. The stock had previously closed at $8.79, but opened at $9.71. Topgolf Callaway Brands shares last traded at $9.75, with a volume of 1,044,499 shares.

The company reported $0.24 EPS for the quarter, beating the consensus estimate of $0.03 by $0.21. The firm had revenue of $1.11 billion during the quarter, compared to analysts' expectations of $1.08 billion. Topgolf Callaway Brands had a positive return on equity of 0.37% and a negative net margin of 36.08%. The company's revenue for the quarter was down 4.1% on a year-over-year basis. During the same quarter in the prior year, the firm posted $0.42 EPS.

Analyst Upgrades and Downgrades

A number of research firms recently weighed in on MODG. Truist Financial dropped their price target on Topgolf Callaway Brands from $12.00 to $7.00 and set a "buy" rating for the company in a report on Monday, April 14th. JPMorgan Chase & Co. reduced their price target on Topgolf Callaway Brands from $8.00 to $7.00 and set a "neutral" rating on the stock in a research report on Tuesday, May 27th. Morgan Stanley started coverage on Topgolf Callaway Brands in a report on Friday, July 18th. They set an "equal weight" rating and a $9.50 target price on the stock. Cfra reissued a "hold" rating and issued a $9.00 price target on shares of Topgolf Callaway Brands in a research note on Friday, July 11th. Finally, B. Riley reissued a "neutral" rating and issued a $9.50 price target (up previously from $7.00) on shares of Topgolf Callaway Brands in a research note on Monday. One research analyst has rated the stock with a sell rating, eight have assigned a hold rating and three have issued a buy rating to the stock. Based on data from MarketBeat.com, Topgolf Callaway Brands has an average rating of "Hold" and an average price target of $10.00.

Insiders Place Their Bets

In related news, Director Russell L. Fleischer purchased 30,000 shares of the business's stock in a transaction that occurred on Wednesday, May 14th. The stock was acquired at an average cost of $6.41 per share, for a total transaction of $192,300.00. Following the completion of the purchase, the director owned 116,187 shares in the company, valued at approximately $744,758.67. This represents a 34.81% increase in their position. The transaction was disclosed in a filing with the Securities & Exchange Commission, which is available through the SEC website. Also, Director Adebayo O. Ogunlesi purchased 384,731 shares of the business's stock in a transaction that occurred on Friday, June 6th. The stock was bought at an average price of $6.48 per share, with a total value of $2,493,056.88. Following the completion of the purchase, the director owned 768,432 shares of the company's stock, valued at $4,979,439.36. This trade represents a 100.27% increase in their position. The disclosure for this purchase can be found here. Over the last ninety days, insiders have acquired 905,284 shares of company stock worth $5,922,500. Company insiders own 2.40% of the company's stock.

Institutional Inflows and Outflows

Institutional investors have recently bought and sold shares of the business. Signaturefd LLC grew its holdings in Topgolf Callaway Brands by 1,669.0% during the 2nd quarter. Signaturefd LLC now owns 3,078 shares of the company's stock worth $25,000 after acquiring an additional 2,904 shares during the period. Sterling Capital Management LLC lifted its position in Topgolf Callaway Brands by 821.5% in the 4th quarter. Sterling Capital Management LLC now owns 4,543 shares of the company's stock valued at $36,000 after acquiring an additional 4,050 shares in the last quarter. GAMMA Investing LLC bought a new position in Topgolf Callaway Brands in the 2nd quarter valued at about $36,000. CWM LLC lifted its position in Topgolf Callaway Brands by 124.0% in the 2nd quarter. CWM LLC now owns 4,679 shares of the company's stock valued at $38,000 after acquiring an additional 2,590 shares in the last quarter. Finally, Public Employees Retirement System of Ohio lifted its position in shares of Topgolf Callaway Brands by 24.6% during the 2nd quarter. Public Employees Retirement System of Ohio now owns 6,275 shares of the company's stock worth $51,000 after buying an additional 1,240 shares in the last quarter. Institutional investors and hedge funds own 84.69% of the company's stock.

Topgolf Callaway Brands Stock Performance

The company's 50-day simple moving average is $8.51 and its 200 day simple moving average is $7.36. The company has a current ratio of 1.85, a quick ratio of 1.25 and a debt-to-equity ratio of 0.48. The stock has a market cap of $1.53 billion, a P/E ratio of -1.02 and a beta of 1.26.

About Topgolf Callaway Brands

Topgolf Callaway Brands Corp. designs, manufactures, and sells golf equipment, golf and lifestyle apparel, and other accessories in the United States, Europe, Asia, and Internationally. The Topgolf segment operates Topgolf venues equipped with technology-enabled hitting bays, bars, dining areas, and event spaces, as well as Toptracer ball-flight tracking technology; and World Golf Tour digital golf game.