Boston Beer’s stock price has taken a beating over the past six months, shedding 24.3% of its value and falling to $191.38 per share. This might have investors contemplating their next move.

Is there a buying opportunity in Boston Beer, or does it present a risk to your portfolio? Check out our in-depth research report to see what our analysts have to say, it’s free.

Why Is Boston Beer Not Exciting?

Even though the stock has become cheaper, we're cautious about Boston Beer. Here are three reasons why there are better opportunities than SAM and a stock we'd rather own.

1. Long-Term Revenue Growth Disappoints

A company’s long-term performance is an indicator of its overall quality. Any business can have short-term success, but a top-tier one grows for years. Over the last three years, Boston Beer grew its sales at a sluggish 1.7% compounded annual growth rate. This was below our standards.

2. Fewer Distribution Channels Limit its Ceiling

With $2.04 billion in revenue over the past 12 months, Boston Beer is a small consumer staples company, which sometimes brings disadvantages compared to larger competitors benefiting from economies of scale and negotiating leverage with retailers.

3. Projected Revenue Growth Shows Limited Upside

Forecasted revenues by Wall Street analysts signal a company’s potential. Predictions may not always be accurate, but accelerating growth typically boosts valuation multiples and stock prices while slowing growth does the opposite.

Over the next 12 months, sell-side analysts expect Boston Beer’s revenue to stall, a slight deceleration versus This projection is underwhelming and suggests its products will face some demand challenges.

Final Judgment

Boston Beer isn’t a terrible business, but it doesn’t pass our quality test. After the recent drawdown, the stock trades at 18.9× forward P/E (or $191.38 per share). Beauty is in the eye of the beholder, but we don’t really see a big opportunity at the moment. We're fairly confident there are better investments elsewhere. We’d recommend looking at the most entrenched endpoint security platform on the market.

Stocks We Like More Than Boston Beer

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