Boston Beer Co.
(
SAM
) posts four positive earnings surprises in a row and becomes a
Zacks #2 Rank (Buy). With Cinco de Mayo right around the corner, a
cold Sam Adams may find its way into an aggressive growth investors
hands near you!
Company Description
The Boston Beer Company, Inc. makes and sells alcohol beverages.
The company sells approximately 50 beers under the Samuel Adams or
the Sam Adams brand names as well as a few other brands. The Boston
Beer Company, Inc. was founded in 1984 and is based in Boston,
Massachusetts.
Boston Beer Tops Earnings Estimates in Four Straight
Quarters
Boston Beer has topped earnings estimates in each of the last four
quarters. The average beat over that same time frame has been
almost $0.03 or 30% ahead of the Zacks Consensus Estimate. Skewing
that average is the huge beat in the June 2011 quarter.
The June 2011 quarter saw the company miss on the topline,
reporting sales of $134 million, $4 million less than the Zacks
Consensus Estimate and EPS of $1.97, $0.80 ahead of the Zacks
Consensus Estimate of $1.17. That translates into a beat of more
than 68%. The stock, however, fell in the session following the
earnings report by more than 3%.
Over the four quarter positive surprise streak, the stock moved the
most following the September 2011 quarter. The company again missed
on the top line, but the miss was approximately $1 million while
the bottom line outperformed by 9%. Coming in $0.10 higher than the
Zacks Consensus Estimate helped push Boston Beer's stock higher by
nearly 12% following the release.
Boston Beer Most Recent Reported Earnings
On May 2, 2012 the company reported revenue of $113 million,
roughly $2 million ahead of the Zacks Consensus Estimate and up
from $102 million reported in year ago quarter. In addition,
earnings per share came in at $0.56, $0.16 higher than the Zacks
Consensus Estimate of $0.40. The beat of 40% was a reacceleration
of earnings that aggressive growth investors tend to look for.
Valuations
The valuation "pitcher" for Boston Beer is not as frothy as one
might expect given the recent history of solid positive earnings
surprises. A trailing PE multiple of 23x is just a little above the
industry average of 19.9x, while the forward PE has bubbled up to
26x compared to a 17x industry average. The price to book multiple,
generally a more conservative measure, has Boston Beer trading at
5x, just under the industry average of 5.3x. The intoxicating
metric is the price to sales, with the company trading at 1.8x
compared to a 3.2x industry average. Given the recent solid
execution, aggressive growth investors will likely drink to this
valuation.
The Chart
The price and consensus chart for Boston Beer shows why this stock
is a Zacks #2 Rank (Buy) instead of a Zacks #1 Rank (strong Buy).
Throughout 2009 and 2010 the company brewed up some good earnings
and the stock moved higher as a result. Toward the end of 2010 the
estimates started to come down for 2011 as shown in the blue line
and for future estimates as well. Those lower earnings projects
cause the stock to fall, but the company has since returned to
growing its earnings. Boston Beer is Zacks #2 Rank (Buy).
Brian Bolan is the Aggressive Growth Stock Strategist for
Zacks.com. He is also the Editor in charge of the
Zacks Home
Run Investor service
Follow Brian Bolan
on twitter
at @BBolan1
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BOSTON BEER INC (SAM): Free Stock Analysis
Report
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