Topgolf Callaway Brands stock sees tailwinds following Jon Rahm’s Masters victory

Yahoo Finance Live checks out shares of the sports brand after its sponsored athlete Jon Rahm won the Masters Tournament this past weekend.

Video Transcript

SEANA SMITH: Kicking off my play today is Topgolf Callaway brand. Shares are moving to the upside. Now, Masters winner Jon Rahm put the brand on display all weekend while playing at Augusta National and then winning. Jefferies analyst Randy Konik thinks that the stock still has room to run. We're talking more than about 170% upside in a note Konik wrote that the market has yet to, quote, "fully appreciate Topgolf Callaway brand's transformation into a golf entertainment platform." And that is going to widen the company's total addressable market.

Konik also thinks that the tailwinds here for golf remain favorable, and also that Topgolf Callaway will capitalize on that growing interest that we have seen in golf. Josh, I got to tell you, there's lots and lots of talk, obviously, about golf today the Monday after the Masters. That makes a lot of sense, but people love going to Topgolf. And I think that's really helping get more people interested in the sport and then maybe eventually go out and play 9 and 18 holes.

JOSH SCHAFER: Yeah, there was a chart in there about offcourse-only golf participants, so people that only play off the course and don't actually go and play 18. That number has tripled in the last seven years, and that's sort of where Top Golf falls into. So that was interesting to see. And Seana, they talked also about the larger ecosystem there. And when you look at Travis Matthew, I thought it was interesting to look at how that apparel brand has grown. That's grown from net sales of 61 million in 2017 to over $300 million in 2022. So you see that Travis Matthew brand really growing. And then, Jared, I did bring a chart with me today--

JARED BLIKRE: Oh, right

JOSH SCHAFER: --because I know you're our chart master. They had one other fun chart in there. This is the average age of golf participants, the average round that they play per year. And it's hard to maybe see any support levels that I know you like, but I thought it was funny. You can see from 30 to 39, it actually ticks down a little bit maybe as--

SEANA SMITH: Kids.

JOSH SCHAFER: --some of our-- yeah, I was gonna say, some golfers started to have kids.

SEANA SMITH: I'm in now. I'm in that case right now, yes.

JOSH SCHAFER: And then you see it really rise. So you see that demographic still very popular in the sport, obviously, in the elder generation there, where it looks like people are probably retiring.

JARED BLIKRE: Love it, Josh. I got another chart for you. It's on the YFi Interactive, by the way. And it's Top Golf over the last five years. Let's chart this real quickly. Then we'll get into my top take. Here we go. This is over the last five years. Interesting that we have this breakout from this multi-year trend line. We've had that big decline over the last year and a half, as a lot of stocks falter there.

But here's the max chart on this. And it goes back basically 40 years. It looks like they IPO'ed in the early '90s and over the pandemic, managed to double top there. Huge, huge double top spanning about 25 years. You don't see those often. I don't know what it means in particular, but there you go.