Callaway Golf (ELY) Gains But Lags Market: What You Should Know

Callaway Golf (ELY) closed the most recent trading day at $21.27, moving +0.85% from the previous trading session. This change lagged the S&P 500's 1.06% gain on the day. Elsewhere, the Dow gained 0.83%, while the tech-heavy Nasdaq added 1.72%.

Prior to today's trading, shares of the maker of golf equipment and accessories had lost 11.87% over the past month. This has lagged the Consumer Discretionary sector's loss of 2.23% and the S&P 500's loss of 2.09% in that time.

ELY will be looking to display strength as it nears its next earnings release, which is expected to be February 6, 2019. In that report, analysts expect ELY to post earnings of -$0.32 per share. This would mark a year-over-year decline of 113.33%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $176.49 million, down 7.92% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $1.05 per share and revenue of $1.24 billion, which would represent changes of +98.11% and +18.11%, respectively, from the prior year.

It is also important to note the recent changes to analyst estimates for ELY. These revisions help to show the ever-changing nature of near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection has moved 5.1% higher. ELY currently has a Zacks Rank of #2 (Buy).

Investors should also note ELY's current valuation metrics, including its Forward P/E ratio of 20.07. Its industry sports an average Forward P/E of 15.27, so we one might conclude that ELY is trading at a premium comparatively.

It is also worth noting that ELY currently has a PEG ratio of 0.8. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. Leisure and Recreation Products stocks are, on average, holding a PEG ratio of 0.95 based on yesterday's closing prices.

The Leisure and Recreation Products industry is part of the Consumer Discretionary sector. This industry currently has a Zacks Industry Rank of 30, which puts it in the top 12% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Make sure to utilize Zacks. Com to follow all of these stock-moving metrics, and more, in the coming trading sessions.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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