Contrasting Peloton Interactive (NASDAQ:PTON) & Topgolf Callaway Brands (NYSE:CALY)

Topgolf Callaway Brands (NYSE:CALY) and Peloton Interactive (NASDAQ:PTON) are both mid-cap consumer discretionary companies, but which is the better investment? We will compare the two businesses based on the strength of their valuation, risk, analyst recommendations, profitability, institutional ownership, dividends and earnings.

Volatility and Risk

Topgolf Callaway Brands has a beta of 0.95, meaning that its share price is 5% less volatile than the S&P 500. Comparatively, Peloton Interactive has a beta of 2.5, meaning that its share price is 150% more volatile than the S&P 500.

Analyst Recommendations

This is a summary of current ratings for Topgolf Callaway Brands and Peloton Interactive, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Topgolf Callaway Brands	0	3	0	1	2.50
Peloton Interactive	1	8	5	0	2.29

Topgolf Callaway Brands presently has a consensus target price of $16.00, suggesting a potential upside of 5.43%. Peloton Interactive has a consensus target price of $8.25, suggesting a potential upside of 59.27%. Given Peloton Interactive’s higher possible upside, analysts clearly believe Peloton Interactive is more favorable than Topgolf Callaway Brands.

Profitability

This table compares Topgolf Callaway Brands and Peloton Interactive’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Topgolf Callaway Brands	1.05%	4.44%	1.59%
Peloton Interactive	0.94%	-6.95%	1.09%

Institutional and Insider Ownership

84.7% of Topgolf Callaway Brands shares are owned by institutional investors. Comparatively, 77.0% of Peloton Interactive shares are owned by institutional investors. 2.9% of Topgolf Callaway Brands shares are owned by company insiders. Comparatively, 1.3% of Peloton Interactive shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Earnings and Valuation

This table compares Topgolf Callaway Brands and Peloton Interactive”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Topgolf Callaway Brands	$2.06 billion	1.32	-$409.30 million	$0.14	108.40
Peloton Interactive	$2.49 billion	0.88	-$118.90 million	$0.04	129.50

Peloton Interactive has higher revenue and earnings than Topgolf Callaway Brands. Topgolf Callaway Brands is trading at a lower price-to-earnings ratio than Peloton Interactive, indicating that it is currently the more affordable of the two stocks.

Summary

Topgolf Callaway Brands beats Peloton Interactive on 9 of the 15 factors compared between the two stocks.

About Topgolf Callaway Brands

Topgolf Callaway Brands Corp. designs, manufactures, and sells golf equipment, golf and lifestyle apparel, and other accessories in the United States, Europe, Asia, and Internationally. The Topgolf segment operates Topgolf venues equipped with technology-enabled hitting bays, bars, dining areas, and event spaces, as well as Toptracer ball-flight tracking technology; and World Golf Tour digital golf game. The Golf Equipment segment provides drivers, fairway woods, hybrids, irons, wedges and packaged sets, putters, and pre-owned golf clubs under the Callaway and Odyssey brands, as well as golf balls under the Callaway Golf and Strata brands. The Active Lifestyle segment offers golf apparel and footwear; golf accessories, including golf bags, golf gloves, headwear, and practice aids under the Callaway brand; golf and lifestyle apparel, hats, luggage, and accessories under the TravisMathew brand; and footwear, belts, hats, facemasks, sunglasses, socks, and underwear under the Cuater by TravisMathew brand. This segment also provides storage and travel gear for sport and personal use, such as backpacks; travel, duffel, and golf bags; and storage gear accessories, as well as outerwear, headwear, and accessories under the OGIO brand. In addition, it offers outdoor apparel comprising jackets, trousers, dresses, skirts, and tops; and footwear and outdoor equipment, including packs and bags, travel bags, tents, sleeping bags, and accessories under the Jack Wolfskin brand. The company sells its products through golf retailers, sporting goods retailers, online retailers, mass merchants, department stores, third-party distributors, and mail order stores, as well as directly to consumers through its retail stores and websites. The company was formerly known as Callaway Golf Company and changed its name to Topgolf Callaway Brands Corp. in September 2022. Topgolf Callaway Brands Corp. was incorporated in 1982 and is headquartered in Carlsbad, California.

About Peloton Interactive

Peloton Interactive, Inc. operates interactive fitness platform in North America and internationally. The company offers connected fitness products with touchscreen that streams live and on-demand classes under the Peloton Bike, Peloton Bike+, Peloton Tread, Peloton Tread+, Peloton Guide, and Peloton Row names. The company markets and sells its interactive fitness products directly through its retail showrooms and at onepeloton.com. Peloton Interactive, Inc. was founded in 2012 and is headquartered in New York, New York.