Boston Beer Inc. (SAM) is fresh off the heels of another strong quarter, sending shares higher in spite of the company’s somewhat cautious tone about tough competition and a tepid consumer environment.

Company Description

The Boston Beer Company, Inc. produces and sells alcohol beverages in the United States and worldwide. The company’s flagship product is its Sam Adams beer. The Boston Beer Company was founded in 1984 and has a market cap of $577 million.

The Boston Beer Company reported solid second-quarter results on August 4 that were better than expected, but the company did acknowledge that it continues to face competitive pressure from other specialty distributors and the weaker consumer environment.

Second-Quarter Results

For the quarter, sales were up 1% from last year to $118 million. But earnings came in much better than expected at 83 cents per share, easily beating the Zacks Consensus Estimate of 60 cents.

Competitive Pressures Pose Threat

The company held its previous full-year earnings guidance between $1.40 and $1.70 per share, but did reference the previously mentioned issues, saying that “We continue to face increased competition from expanded distribution of domestic specialty brands and regional craft brands, and adverse economic pressures that could be affecting our drinkers’ willingness to trade up as often.”

Analysts Raise

The analysts were encouraged by the company’s results and proceeded to lift their earnings guidance. The current-year estimate is up 22 cents to $1.66 per share. The next-year estimate is pegged at $1.82, a solid 10% growth projection.


In light of the upward momentum, this stock has become a bit pricey, trading with a P/E multiple of 24.5X, a premium to the markets 18X.

The Chart

Shares of SAM have been on a big rally over the last 4 months as optimism has moved back into the market. This stock is up more than 100% in that time, having recently crossed the $40 mark. Take a look below.


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