Topgolf Callaway Brands Corp. (MODG) is a golf and lifestyle company which includes the Topgolf technology enabled entertainment experience, the design and sale of golf equipment, and the sale of apparel. Based on management’s forecast, Topgolf’s 2025 revenue (~$1.74 billion) and adjusted EBITDA (~$280 million) comprise around 45% and 60%, respectively, of MODG’s consolidated totals.1
MODG believes the stock market is undervaluing its portfolio of businesses. To remedy this, MODG plans to separate the company, on a tax-free basis, into two independent companies. As such, Topgolf will have $1.75 billion of largely recurring revenue and will generate significant free cash flow. MODG hopes investors will assign a significant multiple to Topgolf’s annual cash flow.
L2 Micro Cap Trade Commentary – August Q2 2025
Table of contents
When
August 25, 2025
Who
Matthew Malgari
Dr. Sanjeev Bhojraj
Nathan Przybylo
SUMMARY:
In this quarter’s systematic rebalance we are taking gains in one of our better performing stocks, rotating out of a few names for better opportunities while initiating a few new positions.
1. We explain our new positions in TopGolf Callaway Brands (MODG) and Viasat, Inc (VSAT)
2. Provide rationale for adding to our position in Indivior PLC (INDV)
3. We explain our decision to sell out of Cinemark Holdings, Inc. (CNK), ScanSource, Inc. (SCSC)
and RE/MAX Holdings, Inc. (RMAX) for better opportunities
SELECT NOTES ON NEW BUYS & SELLS:
Topgolf Callaway Brands Corp. (MODG) is a golf and lifestyle company which includes the Topgolf technology enabled entertainment experience, the design and sale of golf equipment, and the sale of apparel. Based on management’s forecast, Topgolf’s 2025 revenue (~$1.74 billion) and adjusted EBITDA (~$280 million) comprise around 45% and 60%, respectively, of MODG’s consolidated totals.1
MODG believes the stock market is undervaluing its portfolio of businesses. To remedy this, MODG plans to separate the company, on a tax-free basis, into two independent companies. As such, Topgolf will have $1.75 billion of largely recurring revenue and will generate significant free cash flow. MODG hopes investors will assign a significant multiple to Topgolf’s annual cash flow.