$19.77
$45.99
bear $19.77
base $35.04
bull $45.99
margin of safety $24.00
market price* $80.25
Acushnet makes and sells golf equipment and apparel. Its Titleist golf balls and clubs are the core of the business (about $1.6 billion of 2025 sales, split between golf balls at $821 million and clubs at $775 million). FootJoy shoes, gloves and apparel added $570 million and golf gear such as bags and accessories added $245 million, for total 2025 sales of $2,559 million, up 4.1%. About 60% of sales are in the United States ($1,523 million); Europe/Middle East/Africa, Korea, Japan and the rest of the world make up the remainder. The company reports that Titleist balls accounted for 72% of all golf balls used on the worldwide professional tours in 2025. How we measure earnings. We look at the cash the business actually generates for its owners: operating cash flow, minus the swings from inventory, receivables and payables, minus stock-based pay (a real cost), minus the capital spending needed just to keep the factories and distribution network running. On that basis, per-year owner earnings were about $134 million in 2017, $138 million in 2018, $149 million in 2019, $119 million in 2020, $235 million in 2021, $198 million in 2022, $201 million in 2023, $177 million in 2024 and $176 million in 2025. The 2022 cash flow was negative (about minus $68 million) because the company built up $276 million of inventory and receivables rose by $59 million; stripping out that timing shows a normal earnings year. In 2020, the pandemic year, a $105 million working-capital inflow flattered cash flow and was removed as well. Anchor. We treat 2022 through 2025 as the current run rate, with owner earnings of about $188 million a year (the midpoint of $177 million to $198 million). We left out 2021, which was the peak of the pandemic golf boom, and the earlier years, when capital spending was $25 to $38 million a year rather than the $74 to $75 million spent every year from 2023 through 2025. Owner earnings fell 0.7% in 2025 ($176 million versus $177 million); the base case starts from $188 million, which is above 2025. The reason is dated: the six months to June 30, 2026 show net sales of $1,573 million versus $1,424 million a year earlier (up 10.5%), with second-quarter sales up about 14% and net income for the half up to $206 million from $175 million. Two consecutive quarters of growth support treating 2025 as a low year rather than a new level, and we credit no growth beyond that. Base case, about $35 per share. Owner earnings stay flat at about $188 million for ten years, then fade in a straight line to zero over the following twenty years, discounted at 6%, on roughly 59 million diluted shares (58.4 million were outstanding at July 31, 2026). We credit no growth because none is contracted or locked in: golf demand, share gains and new club and ball launches are not things we can name and verify in advance. What keeps the earnings going is the business the company already runs: three company-owned golf ball plants (two in the United States, one in Thailand), a brand with the largest professional-tour usage in golf balls, and nine straight years of positive owner earnings in our record. We fade the earnings after year ten because we cannot point to evidence beyond that horizon. Bear case, about $20 per share. Two disclosed facts drive it. First, the company expects about $95 million of capital spending in 2026, up from $74 million in 2025; if that becomes the new normal, owner earnings on the 2025 base fall by about $21 million to roughly $155 million. Second, in 2020, when sales dipped 4% to $1,612 million, owner earnings fell about 20%; we apply a similar drop, giving about $124 million a year for ten years, then a straight-line fade to zero over ten years. Higher tariffs on goods coming from Thailand and Vietnam, where the company manufactures, are a disclosed pressure too, and the company says it cannot be sure it can offset them through pricing or sourcing. Leverage is a further consideration: long-term debt was about $937 million at June 30, 2026, including $500 million of 5.625% notes due 2033 issued in November 2025 to redeem $350 million of 7.375% notes due 2028. Interest is already paid out of the cash flow we measure, and the company reported compliance with its covenants and $514.7 million available on its revolving credit line at year-end 2025, so we do not see a solvency threat, but debt makes a weak year harder to absorb. Bull case, about $46 per share. The company keeps doing what it has already done: raising average selling prices (2025 clubs and gear sales rose on higher prices) and keeping golf ball volumes growing. We start from about $201 million, the 2023 owner earnings, and grow 3% a year for ten years (to about $271 million), below the 4.1% annual sales growth of 2022 through 2025. After year ten we fade in a straight line to zero over twenty years. We do not add growth from new markets, margin expansion or golf participation. Share count. The company has bought back shares steadily: 3.1 million shares for $211.5 million in 2025 (including 1.9 million from Magnus Holdings for $125 million), with $240.7 million left on its authorization. Diluted shares fell from 75.3 million in 2021 to 60.6 million in 2025. We use the current share count rather than an average, so buybacks are reflected by using fewer shares, and we do not assume more buybacks. What could make this wrong. The upside case would need pricing to keep outpacing costs; the downside would come from a golf slowdown, tariffs the company cannot pass through, or capital spending staying near $95 million. Owner earnings per share have stayed between $2.73 and $3.12 since 2021 even as sales rose 19%, and total owner earnings fell from $235 million to $176 million, because capital spending roughly doubled and gross margin slipped from 48.3% in 2024 to 47.7% in 2025 (which includes tariff costs), while a shrinking share count lifted the per-share figure. We have not assumed margins improve. Margin-of-safety price. The margin-of-safety price is around $24 per share, about 31% below the base case and about 21% above the bear case. Golf is discretionary, the earnings are tied to consumer spending, and the company carries moderate debt, so the margin-of-safety price sits at a meaningful discount to the base case.