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3rd Quarter 2025 Financial Results
Newton Golf (NASDAQ:NWTG) revenues increased 113% to $2.58 million during the 3rd quarter of 2025, compared to $1.2 million in the prior year period. The increase was driven by the continued adoption of the Newton Motion driver shaft product line, the Newton Motion fairway shaft product line in April 2024, and the Newton Fast Motion driver product line introduced in April 2025. During the 3rd quarter, $2,553,000 of net sales were from Newton Motion shafts and approximately 95% of the net sales were made through direct-to-consumer websites. Demand for Fast Motion shafts continue to exceed internal company forecasts. The Fast Motion shafts have powerful market appeal, exceptional performance, and is seeing strong demand from golfers at all levels.
During the quarter, approximately $2.37 million of net sales were direct-to-consumer and generated through company related websites. The remaining $209,000 was derived from various distribution partners. The company engages a wide variety DTC offerings including the Shopify platform, email, affiliate marketing, Meta platforms, and many others.
The company’s focus remains on Fast Motion, Motion, and Fairway Wood shafts which has provided nearly 100% of revenue growth. During 2025, ad spending was demphasized on the putter products because of lower prevailing ROI’s on ad spend. We expect this trend to reverse and expect better growth in putter products in 2026. The company will rollout new sales efforts for putters in 2026.
Gross profit in the 3rd quarter of 2025 was $1.7 million compared to $805,000 in the prior year period. Gross margin was 67.2% in the quarter compared to 66.5% in the 3rd quarter of 2024. The increase in gross margin was due to the change in product mix sold and additional volume which lowered per unit cost as compared to the prior year period.
In 2026, the company will expand into more retail locations as well as strike deals with OEMs. These arrangements would create lower gross margins on a segment basis, but would likely increase revenue growth above current expectations.
SG&A expenses increased to $3.05 million during the 3rd quarter of 2025 compared to $1.7 million during the prior year period. SG&A was higher than previous quarters in 2025 due to increased investment in professional services to modernize back-office systems, improve data accuracy, and build various processes that support growth strategies as well as lower future operating costs.
R&D expenses were $182,000 during the 3rd quarter compared to $201,000 during the prior year period.
Net loss for the 3rd quarter of 2025 was ($1.58) million compared to a net loss of ($1.07) million in the prior year period.
Cash balances as of 9/30/25 stood at $2.5 million and there was no outstanding debt. Working capital at the end of the 3rd quarter of 2025 was positive $2.1 million.
Valuation and Estimates
The company maintained its full-year 2025 revenue guidance to a range of $7.0 million to $7.5 million reflecting stronger-than-anticipated demand and continued momentum across key channels.
Our primary valuation tool utilizes a Discounted Cash Flow process. Based on growth and profitability projections, our DCF-based valuation target is approximately $6.00 per share. Our target price may be conservative as it incorporates a high discount rate of 15.0% due to the unpredictability of earnings, prevailing interest rates, and the timeline for reaching net profitability on an annual basis.
Recently, popular putter manufacturer L.A.B. Golf was acquired by a private equity firm in a deal reportedly valued at over $200 million. Reports indicate that L.A.B. Golf may sell almost 400,000 units in 2025 with putters priced at approximately $500, 2025 revenues could be in the range of $200 million.
Based on 1x our 2026 estimated revenues of approximately $11.1 million, a theoretical acquisition would show 68.2% upside in NWTG stock.
Our 2025 full year revenue estimate is $7.44 million. Our 2025 GAAP EPS estimate is a loss of ($1.61). For 2026, we believe the company can continue to generate strong double-digit revenue growth and our revenue estimate for 2026 is $12.7 million and our 2026 EPS estimate is a loss of ($0.14).
We expect the company to reach cash flow breakeven at some point in calendar year 2026.
The company is selling at 40% of 2026 estimated revenues which is a significant discount to other fast growing sporting goods companies.
The current market cap of only $5.7 million appears to be irrational and more reflective of the ongoing microcap stock malaise as opposed to company fundamentals.
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