Boston Beer Company Inc. (The) Common Stock (SAM) fair value

ACCE thesis

Boston Beer makes Samuel Adams, Truly hard seltzer, Angry Orchard cider, Dogfish Head and the Twisted Tea and Sun Cruiser brands, and it is one of the few U.S. brewers with a real premium craft franchise in both beer and flavored malt beverages. The gross margin of 48.9% and operating margin of 9.3% show the brand pricing power still holds, even as revenue fell 3.3% and return on equity is negative at -8.6%. The thesis rests on whether the core beer and seltzer volumes stabilize after a difficult stretch for U.S. alcohol consumption, which would let operating leverage on that gross margin come through. At a forward P/E of 16.4 the stock is priced for a recovery that has not yet shown up in reported revenue, and the 37/100 score and absence from any major index reflect that unresolved question. It is worth a deeper look mainly to test volume trends and cost discipline against the margin base before anything else.