MODG
Topgolf Callaway Brands Corp.
$14.68
Platform & Compounding FCF
50%
Two-stage FCF DCF
Strong
·
Conviction
Overvalued
Trading 47.2% above fair value
You pay
$14.68
Bear
$8.57
Fair
$9.97
Bull
$11.49
Bear
$8.57
-41.6%
3% stage 1 growth, 11% discount
Fair
$9.97
-32.1%
4% stage 1 growth, 11% discount
Bull
$11.49
-21.7%
6% stage 1 growth, 11% discount
Adjust Assumptions
4.3%
11.0%
3.0%
Key Value Driver
FCF growth rate (4% base case)
Terminal Value % of EV
34%
Implied Market Multiple
18.6x
Market is pricing in (growth)
8.0%
vs 4.3% base
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (23 analysts)
$15.38
Divergence from AlphaVal
35%
Summary
Using a two-stage FCF DCF with 4% growth decelerating over 15 years, discounted at 11%, the base-case intrinsic value is $9.97 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 35% 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