Discounted Cash Flow (DCF) Analysis Unlevered

Callaway Golf Company (ELY)

$21.33

-0.62 (-2.82%)

All numbers are in Millions, Currency in USD

Stock DCF: -49.55 | 21.33 | overvalue

Operating Data

Year A/P	2017 Actual	2018 Actual	2019 Actual	2020 Actual	2021 Actual	2022 Projected	2023 Projected	2024 Projected	2025 Projected	2026 Projected
Revenue	1,048.74	1,242.83	1,701.06	1,589.46	3,133.45	4,276.81	5,837.37	7,967.37	10,874.58	14,842.59
Revenue (%)
EBITDA	89.16	156.25	170.20	-40.55	622.03	413.82	564.82	770.92	1,052.22	1,436.16
EBITDA (%)
EBIT	71.56	136.30	135.25	-80.05	466.21	304.36	415.42	567	773.90	1,056.29
EBIT (%)
Depreciation	17.60	19.95	34.95	39.51	155.82	109.46	149.40	203.91	278.32	379.88
Depreciation (%)

Balance Sheet Data

Year A/P	2017 Actual	2018 Actual	2019 Actual	2020 Actual	2021 Actual	2022 Projected	2023 Projected	2024 Projected	2025 Projected	2026 Projected
Total Cash	85.67	63.98	106.67	477.56	352.22	520.69	710.69	970.01	1,323.96	1,807.06
Total Cash (%)
Account Receivables	95.27	72.09	150.37	139.11	156.05	320.39	437.30	596.86	814.65	1,111.91
Account Receivables (%)
Inventories	262.49	338.06	456.64	352.54	533.46	1,011.71	1,380.87	1,884.73	2,572.45	3,511.11
Inventories (%)
Accounts Payable	63.20	42.47	67.84	66.28	138.68	188.42	257.17	351.01	479.09	653.90
Accounts Payable (%)
Capital Expenditure	-26.20	-36.82	-54.70	-39.26	-322.27	-183.32	-250.22	-341.52	-466.14	-636.22
Capital Expenditure (%)

Weighted Average Cost Of Capital

Share price	$ 21.33
Beta	1.764
Diluted Shares Outstanding	176.93
Cost of Debt
Tax Rate	8.17
After-tax Cost of Debt	3.59%
Risk-Free Rate
Market Risk Premium
Cost of Equity	11.806
Total Debt	2,952.70
Total Equity	3,773.81
Total Capital	6,726.51
Debt Weighting	43.90
Equity Weighting	56.10
Wacc

Build Up Free Cash

Year A/P	2017 Actual	2018 Actual	2019 Actual	2020 Actual	2021 Actual	2022 Projected	2023 Projected	2024 Projected	2025 Projected	2026 Projected
Revenue	1,048.74	1,242.83	1,701.06	1,589.46	3,133.45	4,276.81	5,837.37	7,967.37	10,874.58	14,842.59
EBITDA	89.16	156.25	170.20	-40.55	622.03	413.82	564.82	770.92	1,052.22	1,436.16
EBIT	71.56	136.30	135.25	-80.05	466.21	304.36	415.42	567	773.90	1,056.29
Tax Rate	40.04%	20.21%	17.08%	0.43%	8.17%	17.19%	17.19%	17.19%	17.19%	17.19%
EBIAT	42.91	108.75	112.14	-79.71	428.11	252.05	344.02	469.56	640.89	874.75
Depreciation	17.60	19.95	34.95	39.51	155.82	109.46	149.40	203.91	278.32	379.88
Accounts Receivable	-	23.18	-78.29	11.26	-16.94	-164.33	-116.91	-159.56	-217.79	-297.26
Inventories	-	-75.57	-118.58	104.10	-180.91	-478.25	-369.16	-503.86	-687.72	-938.66
Accounts Payable	-	-20.74	25.38	-1.56	72.40	49.74	68.75	93.84	128.08	174.81
Capital Expenditure	-26.20	-36.83	-54.70	-39.26	-322.27	-183.32	-250.22	-341.52	-466.14	-636.22
UFCF	34.31	18.75	-79.10	34.33	136.20	-414.66	-174.11	-237.64	-324.35	-442.71
WACC
PV UFCF						-383.23	-148.72	-187.60	-236.65	-298.52
SUM PV UFCF										-1,254.73

Terminal Value

Growth in perpetuity method:
Long-term growth rate
WACC (%)	8.20
Free cash flow (t + 1)	-451.56
Terminal Value	-7,283.23
Present Value of Terminal Value	-4,911.20

Intrinsic Value

Enterprise Value	-6,165.93
Net Debt	2,600.48
Equity Value	-8,766.41
Shares Outstanding	176.93
Equity Value Per Share	-49.55