- Golf was already making a comeback, adding players in 2018 for the first time in 14 years.
- Jefferies analyst Randal Konik thinks Calloway Golf will capitalize on the sport's resurgence.
- Watch Calloway Golf trade live .
Many observers quickly began speculating that Woods' long-awaited comeback would ignite a golf renaissance after years of declining participation. But truth be told, golf was making a comeback even before Woods' big win.
The number of on-course golf participants in the US rose 2% in 2018 to 24.2 million, making for the first increase in 14 years, according Jefferies analyst Randal Konik. Still, the sport has a long way to go to get back to the 29.8 million golfers in 2006, the year after Woods won his fourth green jacket.
"Sure, 2% growth may not sound heroic, but for those who view the sport of golf as 'dead,' we believe this should serve as a potent correction, particularly given that it was driven by a healthy, sustained level of beginners to the sport," he wrote.
More than 2.5 million Americans started golfing last year, the highest since at least 1987, eclipsing the levels seen during the "Tigermania" of the late 1990s and early 2000s, according to Konik.
And while more players are heading to the golf course, the real growth for the sport is coming in the form of off-course play. The number of off-course golfers surged 12% last year to 23 million, nearly equal to the number of on-course golfers.
Konik says the entertainment venue Topgolf , which provides golf games for players of all skill levels, a full-service bar and restaurant, and a climate-controlled setting, has been a boon for the game. He estimates half of Topgolf's visitors, or about 13 million annually, are trying out golf for the first time.
"We conducted a scenario analysis to quantify this potential impact, leading us to estimate that Topgolf could add 100-200bps to golf equipment/gear industry growth by 2021, a view that could prove conservative given the steep ramp in offcourse participants seen in 2018," Konik wrote.
He sees Callaway Golf, which owns a 14% stake in Topgolf, as a big winner in the space. In a deep dive into the golf industry that he conducted in February, Konik pointed to strong demand for its golf clubs and golf balls and the growth potential for Topgolf as reasons for his excitement.
He has a "buy" rating and $26 price target 53% above where shares settled on Thursday.