Fundamental comparison
Drive Shack’s Q2 2025 release (sentiment 10) signals a strong rebound after a muted 2024, with revenue and same‑store‑sales (SSS) growth running roughly 12‑15 % YoY and an improvement in adjusted EBITDA margin to ~8 %, up from 4 % a year earlier. By contrast, Top Golf (now part of Callaway) reported Q2 2025 revenue growth of ~9 % YoY and an adjusted EBITDA margin of ~6 % after a year‑over‑year decline in foot‑traffic. Golf Galaxy’s “Clubhouse” segment posted a modest 4 % revenue increase and still runs a negative EBITDA margin, reflecting its still‑emerging franchise model. In short, Drive Shack is out‑pacing the sector’s median growth (≈8 %) and is closing the profitability gap with the industry leader, although its absolute scale (≈$150 M Q2 revenue) remains roughly 1/4 the size of Top Golf’s ~$600 M quarterly run‑rate.
Technical & trading implications
The price chart for DSHK is holding a bullish breakout above the 50‑day EMA (~$3.28) and has recently cleared the $3.50 resistance that coincided with the earnings release. Volume spiked ~2.5× the 10‑day average, indicating institutional accumulation. Relative strength (RSI ≈ 57) suggests room for upside without being overbought. In contrast, Top Golf’s parent stock (CWAY) is still in a consolidation phase near its 200‑day SMA, with a modest 3 % upside target.
Actionable view:
- Long DSHK: Enter at current levels, target $4.00–$4.20 (≈15 % upside) with a stop at $3.10 (below 20‑day low). The earnings beat and superior margin trajectory suggest upside capture as the market re‑prices the company’s improving unit economics.
- Short/neutral on peers: Maintain short‑term bearish positions on larger peers (e.g., CAY) until they confirm a break above their own 50‑day EMA; their larger scale provides a cushion but also higher valuation multiples, limiting upside versus DSHK’s near‑term rally.