MODG
Topgolf Callaway Brands Corp.
$14.68
Platform & Compounding FCF
50%
Two-stage FCF DCF
Moderate
·
Conviction
Overvalued
Trading 39.7% above fair value
You pay
$14.68
Bear
$8.12
Fair
$10.51
Bull
$12.59
Bear
$8.12
-44.7%
3% stage 1 growth, 11% discount
Fair
$10.51
-28.4%
5% stage 1 growth, 11% discount
Bull
$12.59
-14.3%
7% stage 1 growth, 11% discount
Key Value Driver
FCF growth rate (5% base case)
Terminal Value % of EV
35%
Implied Market Multiple
21.5x
Market is pricing in (growth)
10.0%
vs 5.3% base
Summary
Our base-case estimate uses a two-stage discounted cash flow model based on free cash flow. We then blend that result with the average analyst price target of $15.38 from 23 analysts, using a 25% weight on analyst consensus. That produces an estimated intrinsic value of $10.51 per share.
Warnings
Stock-based employee pay equals 61% of profits. This dilutes existing shareholders, so cash flow alone overstates what owners really earn.
Wall Street's average price target is $15.38 (from 23 analysts). Our estimate is 42% below the consensus -- consider that gap carefully.
Key Risks
- P/E alone misleads — earnings depressed by growth investment
- Cyclical or commodity businesses may be misclassified as platforms
- Terminal value dominance suggests sensitivity to long-run assumptions