February 28, 2016
NYSE: SAM
BOSTON BEER INC
BUY
A+
A
A-
HOLD
B+
B
Annual Dividend Rate
NA
B-
C+
C
Annual Dividend Yield
NA
SELL
C-
D+
D
D-
Beta
0.81
SAM BUSINESS DESCRIPTION
The Boston Beer Company, Inc. produces and sells
alcohol beverages primarily in the United States.
The company's flagship beer is Samuel Adams
Boston Lager.
STOCK PERFORMANCE (%)
3 Mo.
Price Change
-9.87
E
E-
F
Market Capitalization
$1.8 Billion
Sector: Consumer Non-Discretionary
Weekly Price: (US$)
E+
Sub-Industry: Brewers
SMA (50)
HOLD
52-Week Range
$160.84-$282.62
RATING SINCE
02/03/2016
Price as of 2/25/2016
$191.92
Source: S&P
SMA (100)
1 Year
2 Years
325
300
275
250
1 Yr.
-31.12
3 Yr (Ann)
6.76
12 Mo.
6.30
8.45
8.22
3 Yr CAGR
18.27
18.28
18.06
225
200
GROWTH (%)
Last Qtr
-1.24
-15.52
-13.58
Revenues
Net Income
EPS
RETURN ON EQUITY (%)
SAM
Q4 2015
21.33
Q4 2014
20.80
Q4 2013
23.30
175
150
Rating History
BUY
Ind Avg
19.52
16.03
15.48
S&P 500
12.28
14.59
13.97
Volume in Millions
2014
26.51
26.37
21.53
SAM
Ind Avg
S&P 500
HIGHLIGHTS
SAM's debt-to-equity ratio is very low at 0.00 and is currently below that of the industry average, implying that
there has been very successful management of debt levels. Along with the favorable debt-to-equity ratio, the
company maintains an adequate quick ratio of 1.37, which illustrates the ability to avoid short-term cash
problems.
2014
Q4 1.21
Q3 2.85
Q2 2.18
Q1 1.00
Q4 1.40
Q3 2.79
Q1 0.62
The return on equity has improved slightly when compared to the same quarter one year prior. This can be
construed as a modest strength in the organization. Compared to other companies in the Beverages industry
and the overall market, BOSTON BEER INC's return on equity exceeds that of both the industry average and
the S&P 500.
Q2 1.88
Q4 1.33
Q3 1.89
Q1 0.51
0
2016
RECOMMENDATION
We rate BOSTON BEER INC (SAM) a HOLD. The primary factors that have impacted our rating are mixed some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a
positive or negative performance for this stock relative to most other stocks. The company's strengths can
be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most
measures, notable return on equity and expanding profit margins. However, as a counter to these strengths,
we also find weaknesses including a generally disappointing performance in the stock itself, weak operating
cash flow and unimpressive growth in net income.
EPS ANALYSIS¹ ($)
Q2 1.45
2015
COMPUSTAT for Price and Volume, TheStreet Ratings, Inc. for Rating History
P/E COMPARISON
2013
3
2015
NA = not available NM = not meaningful
1 Compustat fiscal year convention is used for all fundamental
data items.
BOSTON BEER INC's earnings per share declined by 13.6% in the most recent quarter compared to the same
quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised
for EPS growth in the coming year. During the past fiscal year, BOSTON BEER INC increased its bottom line by
earning $7.24 versus $6.69 in the prior year. This year, the market expects an improvement in earnings ($7.81
versus $7.24).
Looking at the price performance of SAM's shares over the past 12 months, there is not much good news to
report: the stock is down 31.12%, and it has underformed the S&P 500 Index. In addition, the company's
earnings per share are lower today than the year-earlier quarter. Although its share price is down sharply
from a year ago, do not assume that it can now be tagged as cheap and attractive. The reality is that, based
on its current price in relation to its earnings, SAM is still more expensive than most of the other companies in
its industry.
Net operating cash flow has decreased to $26.21 million or 32.18% when compared to the same quarter last
year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is
significantly lower.
This report is for information purposes only and should not be considered a solicitation to buy or sell any security. Neither TheStreet Ratings nor any other party guarantees its accuracy
or makes warranties regarding results from its usage. Redistribution is prohibited without the express written consent of TheStreet Ratings. Copyright(c) 2006-2015. All rights reserved.
Report Date: February 28, 2016
PAGE 1
February 28, 2016
NYSE: SAM
BOSTON BEER INC
Sector: Consumer Non-Discretionary Brewers Source: S&P
Annual Dividend Rate
NA
Annual Dividend Yield
NA
PEER GROUP ANALYSIS
V
FA
30%
AB
OR
LE
CRVP
BF.B
CCU
LE
AB
-20%
R
VO
FA
TAP
TAP.A
5%
40%
EBITDA Margin (TTM)
Companies with higher EBITDA margins and
revenue growth rates are outperforming companies
with lower EBITDA margins and revenue growth
rates. Companies for this scatter plot have a market
capitalization between $156.4 Million and $192.1
Billion. Companies with NA or NM values do not
appear.
*EBITDA – Earnings Before Interest, Taxes, Depreciation and
Amortization.
30%
V
FA
COKE
AB
OR
LE
CCU
R
VO
FA
LE
AB
-20%
BF.B
KO
UN
Revenue Growth (TTM)
STZ.B
SAM
CRVP
-4%
Health and convenience remain major challenges and play a significant role in shaping product strategies.
Beverages have been in the spotlight over the last five years because of research that links ingredients, such
as sugars and acids, with prevalent chronic diseases, such as obesity, diabetes, and dental decay. Rising
environmental concerns also present a challenge. The production, distribution, and sale of beverages in the
United States are subject to the Federal Food, Drug, and Cosmetic Act, the Dietary Supplement Health and
Education Act of 1994, and the Occupational Safety and Health Act. These acts, various environmental
statutes, and numerous other federal, state, and local statutes are applicable to the production,
transportation, sale, safety, advertisement, and ingredients. Industry fragmentation also poses a major threat.
To overcome this, companies are acquiring smaller players or developing independent plants. Coca-Cola’s
Monster distribution will help bottlers realize economies of scale in their direct store distribution system.
PEER GROUP: Beverages
REVENUE GROWTH AND EARNINGS YIELD
BREW
Price as of 2/25/2016
$191.92
Faced with limited volume growth in developed markets, high-growth developing markets are increasingly
important to the bottom line. Mergers, acquisitions, and partnerships are on the rise as food and drink brands
look to establish or expand their presence in international markets. PepsiCo and Pepsi Bottling Group Inc.
acquired a 75% stake in Russia’s Lebedyansky JSC for around $2.0 billion in March 2008 and Coca-Cola bid
$2.3 billion for China Huiyuan Juice Group Ltd. in September 2008.
KO
UN
Revenue Growth (TTM)
BREW
52-Week Range
$160.84-$282.62
The non-alcoholic beverage segment represents 60% of the market. Premium wineries revenue has
registered annual growth of 8% over recent years and energy drink volume continues to surge.
STZ.B
SAM
Market Capitalization
$1.8 Billion
INDUSTRY ANALYSIS
The US beverage industry is broadly divided into alcoholic and non-alcoholic segments. The alcoholic
segment includes beer, wine, and spirits. The non-alcoholic segment includes carbonated soft drinks (CSDs),
fruit beverages, bottled water, milk, sports drinks, energy drinks, ready-to-drink (RTD) tea, and RTD coffee.
The industry has around 4000 manufactures and distributors generating upwards of $140 billion in annual
revenue. The industry is highly competitive on pricing, packaging, marketing, and developing new products.
The two biggest players are Coca-Cola (KO) and PepsiCo (PEP), which together hold more than 50% of the
market.
REVENUE GROWTH AND EBITDA MARGIN*
COKE
Beta
0.81
TAP.A TAP
ABEV 5%
Ticker
SAM
ABEV
CCU
STZ.B
BF.B
KO
TAP
TAP.A
CRVP
BREW
COKE
Recent
Company Name
Price ($)
BOSTON BEER INC
191.92
AMBEV SA
4.46
COMPANIA CERVECERIAS UNIDAS 19.38
CONSTELLATION BRANDS
139.10
BROWN FORMAN CORP
103.39
COCA-COLA CO
44.16
MOLSON COORS BREWING CO
86.63
MOLSON COORS BREWING CO
86.12
CRYSTAL ROCK HOLDINGS INC
0.75
CRAFT BREW ALLIANCE INC
8.16
COCA-COLA BTLNG CONS
176.69
Market
Cap ($M)
1,817
70,101
3,580
28,513
21,559
192,051
16,958
16,958
16
156
1,262
Price/
Earnings
26.51
22.30
21.07
27.49
31.81
26.44
45.59
45.33
NM
90.67
28.54
Net Sales
TTM ($M)
959.93
11,800.09
2,115.70
6,361.40
3,103.00
44,294.00
3,567.50
3,567.50
73.90
202.37
2,127.38
Net Income
TTM ($M)
98.41
3,137.88
170.58
1,026.10
682.00
7,351.00
359.50
359.50
-0.60
1.68
57.70
The peer group comparison is based on Major Brewers companies of comparable size.
Earnings Yield (TTM)
Companies that exhibit both a high earnings yield
and high revenue growth are generally more
attractive than companies with low revenue growth
and low earnings yield. Companies for this scatter
plot have revenue growth rates between -17.7% and
25.1%. Companies with NA or NM values do not
appear.
This report is for information purposes only and should not be considered a solicitation to buy or sell any security. Neither TheStreet Ratings nor any other party guarantees its accuracy
or makes warranties regarding results from its usage. Redistribution is prohibited without the express written consent of TheStreet Ratings. Copyright(c) 2006-2015. All rights reserved.
Report Date: February 28, 2016
PAGE 2
February 28, 2016
NYSE: SAM
BOSTON BEER INC
Sector: Consumer Non-Discretionary Brewers Source: S&P
Annual Dividend Rate
NA
Annual Dividend Yield
NA
COMPANY DESCRIPTION
The Boston Beer Company, Inc. produces and sells
alcohol beverages in the United States, Canada, Europe,
Israel, Australia, New Zealand, the Caribbean, the Pacific
Rim, Mexico, and Central and South America. The
company sells approximately 60 beers under the Samuel
Adams or the Sam Adams brands; 11 flavored malt
beverages under the Twisted Tea brand; and 10 hard
cider beverages under the brand Angry Orchard, as well
as approximately 20 beers under other brand names. It
markets its products to a network of approximately 350
wholesalers, who in turn sell to retailers, such as pubs,
restaurants, grocery stores, convenience stores, package
stores, stadiums, and other retail outlets. The Boston
Beer Company, Inc. was founded in 1984 and is based in
Boston, Massachusetts.
BOSTON BEER INC
One Design Center Place, Suite 850
Boston, MA 02210
USA
Phone: 617-368-5000
http://www.bostonbeer.com
Beta
0.81
Market Capitalization
$1.8 Billion
52-Week Range
$160.84-$282.62
Price as of 2/25/2016
$191.92
STOCK-AT-A-GLANCE
Below is a summary of the major fundamental and technical factors we consider when determining our
overall recommendation of SAM shares. It is provided in order to give you a deeper understanding of our
rating methodology as well as to paint a more complete picture of a stock's strengths and weaknesses. It is
important to note, however, that these factors only tell part of the story. To gain an even more comprehensive
understanding of our stance on the stock, these factors must be assessed in combination with the stock’s
valuation. Please refer to our Valuation section on page 5 for further information.
FACTOR
SCORE
4.5
Growth
out of 5 stars
weak
Measures the growth of both the company's income statement and
cash flow. On this factor, SAM has a growth score better than 80% of
the stocks we rate.
strong
2.5
Total Return
out of 5 stars
weak
Measures the historical price movement of the stock. The stock
performance of this company has beaten 40% of the companies we
cover.
strong
5.0
Efficiency
out of 5 stars
weak
Measures the strength and historic growth of a company's return on
invested capital. The company has generated more income per dollar of
capital than 90% of the companies we review.
strong
2.5
Price volatility
out of 5 stars
weak
Measures the volatility of the company's stock price historically. The
stock is less volatile than 40% of the stocks we monitor.
strong
5.0
Solvency
out of 5 stars
weak
Measures the solvency of the company based on several ratios. The
company is more solvent than 90% of the companies we analyze.
strong
0.5
Income
out of 5 stars
weak
Measures dividend yield and payouts to shareholders. This company
pays no dividends.
strong
THESTREET RATINGS RESEARCH METHODOLOGY
TheStreet Ratings' stock model projects a stock's total return potential over a 12-month period including both
price appreciation and dividends. Our Buy, Hold or Sell ratings designate how we expect these stocks to
perform against a general benchmark of the equities market and interest rates. While our model is
quantitative, it utilizes both subjective and objective elements. For instance, subjective elements include
expected equities market returns, future interest rates, implied industry outlook and forecasted company
earnings. Objective elements include volatility of past operating revenues, financial strength, and company
cash flows.
Our model gauges the relationship between risk and reward in several ways, including: the pricing drawdown
as compared to potential profit volatility, i.e.how much one is willing to risk in order to earn profits; the level of
acceptable volatility for highly performing stocks; the current valuation as compared to projected earnings
growth; and the financial strength of the underlying company as compared to its stock's valuation as
compared to projected earnings growth; and the financial strength of the underlying company as compared
to its stock's performance. These and many more derived observations are then combined, ranked, weighted,
and scenario-tested to create a more complete analysis. The result is a systematic and disciplined method of
selecting stocks.
This report is for information purposes only and should not be considered a solicitation to buy or sell any security. Neither TheStreet Ratings nor any other party guarantees its accuracy
or makes warranties regarding results from its usage. Redistribution is prohibited without the express written consent of TheStreet Ratings. Copyright(c) 2006-2015. All rights reserved.
Report Date: February 28, 2016
PAGE 3
February 28, 2016
NYSE: SAM
BOSTON BEER INC
Sector: Consumer Non-Discretionary Brewers Source: S&P
Annual Dividend Rate
NA
Annual Dividend Yield
NA
Consensus EPS Estimates² ($)
IBES consensus estimates are provided by Thomson Financial
0.95
Q1 FY16
7.81 E
8.37 E
2016(E)
2017(E)
Beta
0.81
Market Capitalization
$1.8 Billion
52-Week Range
$160.84-$282.62
Price as of 2/25/2016
$191.92
FINANCIAL ANALYSIS
BOSTON BEER INC's gross profit margin for the fourth quarter of its fiscal year 2015 is essentially unchanged
when compared to the same period a year ago. Sales and net income have dropped, however the growth has
outpaced the average competitor within the industry. BOSTON BEER INC has average liquidity. Currently, the
Quick Ratio is 1.37 which shows that technically this company has the ability to cover short-term cash needs.
The company's liquidity has increased from the same period last year.
During the same period, stockholders' equity ("net worth") has increased by 5.75% from the same quarter last
year. Together, the key liquidity measurements indicate that it is relatively unlikely that the company will face
financial difficulties in the near future.
STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the
next 12-months. To learn more visit www.TheStreetRatings.com.
INCOME STATEMENT
Net Sales ($mil)
EBITDA ($mil)
EBIT ($mil)
Net Income ($mil)
Q4 FY15
215.13
37.68
26.38
16.12
Q4 FY14
217.82
42.38
32.24
19.07
Q4 FY15
94.19
645.40
0.53
461.22
Q4 FY14
76.40
605.16
0.58
436.14
Q4 FY15
55.81%
17.51%
12.26%
1.49
15.24%
21.33%
Q4 FY14
54.43%
19.45%
14.80%
1.49
14.99%
20.80%
Q4 FY15
2.01
0.00
NA
NA
Q4 FY14
1.88
0.00
NA
NA
Q4 FY15
13
0.00
1.21
36.16
NA
179,692
Q4 FY14
13
0.00
1.40
33.37
NA
150,686
BALANCE SHEET
Cash & Equiv. ($mil)
Total Assets ($mil)
Total Debt ($mil)
Equity ($mil)
PROFITABILITY
Gross Profit Margin
EBITDA Margin
Operating Margin
Sales Turnover
Return on Assets
Return on Equity
DEBT
Current Ratio
Debt/Capital
Interest Expense
Interest Coverage
SHARE DATA
Shares outstanding (mil)
Div / share
EPS
Book value / share
Institutional Own %
Avg Daily Volume
2 Sum of quarterly figures may not match annual estimates due to
use of median consensus estimates.
This report is for information purposes only and should not be considered a solicitation to buy or sell any security. Neither TheStreet Ratings nor any other party guarantees its accuracy
or makes warranties regarding results from its usage. Redistribution is prohibited without the express written consent of TheStreet Ratings. Copyright(c) 2006-2015. All rights reserved.
Report Date: February 28, 2016
PAGE 4
February 28, 2016
NYSE: SAM
BOSTON BEER INC
Sector: Consumer Non-Discretionary Brewers Source: S&P
Annual Dividend Rate
NA
Annual Dividend Yield
NA
Beta
0.81
Market Capitalization
$1.8 Billion
52-Week Range
$160.84-$282.62
Price as of 2/25/2016
$191.92
VALUATION
HOLD. BOSTON BEER INC's P/E ratio indicates a premium compared to an average of 26.37 for the Beverages
industry and a premium compared to the S&P 500 average of 21.53. To use another comparison, its
price-to-book ratio of 5.31 indicates a significant premium versus the S&P 500 average of 2.56 and a
significant discount versus the industry average of 7.81. The price-to-sales ratio is well above the S&P 500
average, but well below the industry average.
2 Year Chart
$350
Price/Earnings
$300
SAM 26.51
Peers 26.37
• Average. An average P/E ratio can signify an
industry neutral price for a stock and an average
growth expectation.
• SAM is trading at a valuation on par with its peers.
HOLD: $180.23
BUY: $235.18
RATINGS HISTORY
Our rating for BOSTON BEER INC was recently
downgraded from Buy to Hold on 2/3/2016. As of
2/25/2016, the stock was trading at a price of
$191.92 which is 32.1% below its 52-week high of
$282.62 and 19.3% above its 52-week low of $160.84.
$250
$200
2014
2015
1
2
3
premium
Price/Projected Earnings
1
2
From
Buy
Buy
To
Hold
Buy
5
3
4
5
SAM 22.93
Peers 23.25
• Average. An average price-to-projected earnings
ratio can signify an industry neutral stock price and
average future growth expectations.
• SAM is trading at a valuation on par with its peers.
Price/Book
(as of 2/25/2016)
32.19% Buy - We believe that this stock has the
opportunity to appreciate and produce a total return of
more than 10% over the next 12 months.
35.29% Hold - We do not believe this stock offers
conclusive evidence to warrant the purchase or sale of
shares at this time and that its likelihood of positive total
return is roughly in balance with the risk of loss.
32.52% Sell - We believe that this stock is likely to
decline by more than 10% over the next 12 months, with
the risk involved too great to compensate for any
possible returns.
1
2
3
premium
4
5
Price/Sales
1
2
premium
3
4
5
Price to Earnings/Growth
4
5
discount
1
2
3
premium
4
5
discount
SAM 3.43
Peers 1.67
• Premium. The PEG ratio is the stock’s P/E divided by
the consensus estimate of long-term earnings
growth. Faster growth can justify higher price
multiples.
• SAM trades at a significant premium to its peers.
Earnings Growth
1
2
3
4
lower
5
higher
SAM 8.22
Peers -3.10
• Higher. Elevated earnings growth rates can lead to
capital appreciation and justify higher
price-to-earnings ratios.
• SAM is expected to have an earnings growth rate
that significantly exceeds its peers.
Sales Growth
discount
SAM 2.55
Peers 4.15
• Discount. In the absence of P/E and P/B multiples,
the price-to-sales ratio can display the value
investors are placing on each dollar of sales.
• SAM is trading at a significant discount to its
industry on this measurement.
3
SAM 14.51
Peers 18.03
• Discount. The P/CF ratio, a stock’s price divided by
the company's cash flow from operations, is useful
for comparing companies with different capital
requirements or financing structures.
• SAM is trading at a discount to its peers.
discount
SAM 5.31
Peers 7.81
• Discount. A lower price-to-book ratio makes a
stock more attractive to investors seeking stocks
with lower market values per dollar of equity on the
balance sheet.
• SAM is trading at a significant discount to its peers.
2
premium
discount
Price reflects the closing price as of the date listed, if available
RATINGS DEFINITIONS &
DISTRIBUTION OF THESTREET RATINGS
1
Price/CashFlow
discount
premium
MOST RECENT RATINGS CHANGES
Date
Price
Action
2/3/16
$180.23 Downgrade
2/25/14
$235.18 No Change
4
1
2
3
lower
4
5
higher
SAM 6.30
Peers -4.21
• Higher. A sales growth rate that exceeds the
industry implies that a company is gaining market
share.
• SAM has a sales growth rate that significantly
exceeds its peers.
DISCLAIMER:
TheStreet Ratings
14 Wall Street, 15th Floor
New York, NY 10005
www.thestreet.com
Research Contact: 212-321-5381
Sales Contact: 866-321-8726
The opinions and information contained herein have been obtained or derived from sources believed to be reliable, but
TheStreet Ratings cannot guarantee its accuracy and completeness, and that of the opinions based thereon. Data is provided
via the COMPUSTAT® Xpressfeed product from Standard &Poor's, a division of The McGraw-Hill Companies, Inc., as well as
other third-party data providers.
TheStreet Ratings is a division of TheStreet, Inc., which is a publisher. This research report contains opinions and is provided
for informational purposes only. You should not rely solely upon the research herein for purposes of transacting securities or
other investments, and you are encouraged to conduct your own research and due diligence, and to seek the advice of a
qualified securities professional, before you make any investment. None of the information contained in this report constitutes,
or is intended to constitute a recommendation by TheStreet Ratings of any particular security or trading strategy or a
determination by TheStreet Ratings that any security or trading strategy is suitable for any specific person. To the extent any of
the information contained herein may be deemed to be investment advice, such information is impersonal and not tailored to the
investment needs of any specific person. Your use of this report is governed by TheStreet, Inc.'s Terms of Use found at
http://www.thestreet.com/static/about/terms-of-use.html.
This report is for information purposes only and should not be considered a solicitation to buy or sell any security. Neither TheStreet Ratings nor any other party guarantees its accuracy
or makes warranties regarding results from its usage. Redistribution is prohibited without the express written consent of TheStreet Ratings. Copyright(c) 2006-2015. All rights reserved.
Report Date: February 28, 2016
PAGE 5