Topgolf Callaway Brands Corp. (MODG): A Bull Case Theory

We came across a bullish thesis on Topgolf Callaway Brands Corp. on Coughlin Capital’s Substack by Brian Coughlin. In this article, we will summarize the bulls’ thesis on MODG. Topgolf Callaway Brands Corp.’s share was trading at $8.86 as of July 11^th. MODG’s trailing and forward P/E were 98.91 and 156.25 respectively according to Yahoo Finance.

MODG, the hybrid entity formed after Callaway’s merger with Topgolf, remains a misunderstood consumer stock despite its evolving identity. No longer just a golf equipment company, MODG now generates over half its revenue from the experiential, fast-growing Topgolf segment. However, investor sentiment has turned sharply negative, with shares down roughly 65% from 2023 highs, driven by confusion over the company’s dual model and macro concerns over consumer spending.

Beneath the pessimism, fundamentals are showing signs of stabilization. Topgolf continues to post improving metrics—rising foot traffic, increased spend per visit, and healthier unit-level economics—while Callaway’s traditional golf segment remains a steady source of cash flow and profitability. The real investment case lies in valuation: MODG trades at just 8.4x EV/EBITDA, well below its historical average of ~14x, and only 0.7x book value, suggesting the market is heavily discounting its real estate assets and brand equity.

This dislocation presents significant upside optionality if Topgolf’s millennial-friendly, experiential model scales successfully. The company stands to benefit from secular shifts in consumer preferences toward social and interactive leisure, supported by a strong brand and valuable real estate footprint. That said, execution risk is real—MODG still faces challenges integrating its two distinct business segments and carries meaningful debt from the merger.

Moreover, its reliance on discretionary spending makes it vulnerable to economic cycles. Still, with sentiment at cyclical lows and structural growth levers intact, MODG offers a contrarian opportunity for investors willing to look beyond near-term noise toward the company’s long-term experiential vision.

Previously, we covered a bullish thesis on Topgolf Callaway Brands Corp. (MODG) by Strategic Alpha in September 2024, which highlighted upside from a potential segment separation and undervaluation. The stock has depreciated ~17% since then as the thesis hasn’t played out yet. Brian Coughlin shares a similar thesis but emphasizes the experiential value and real estate-driven optionality.

READ NEXT: 8 Best Wide Moat Stocks to Buy Now and 30 Most Important AI Stocks According to BlackRock.

Disclosure: None.