Boston Beer (SAM)

Beer company Boston Beer (NYSE:SAM) met Wall Street’s revenue expectations in Q4 CY2025, but sales fell by 4.1% year on year to $385.7 million. Its GAAP loss of $2.12 per share was 15.3% above analysts’ consensus estimates.

Company Overview

Known for its flavorful beverages challenging the status quo, Boston Beer (NYSE:SAM) is a pioneer in craft brewing and a symbol of American innovation in the alcoholic beverage industry.

These companies' performance is influenced by brand strength, marketing strategies, and shifts in consumer preferences. Changing consumption patterns are particularly relevant and can be seen in the rise of cannabis, craft beer, and vaping or the steady decline of soda and cigarettes. Companies that spend on innovation to meet consumers where they are with regards to trends can reap huge demand benefits while those who ignore trends can see stagnant volumes. Finally, with the advent of the social media, the cost of starting a brand from scratch is much lower, meaning that new entrants can chip away at the market shares of established players.

Competitors include Anheuser-Busch Inbev (NYSE:BUD), Constellation Brands (NYSE:STZ), and Molson Coors (NYSE:TAP) along with international companies such as Asahi, Carlsberg, and Heineken.

Examining a company’s long-term performance can provide clues about its quality. Any business can put up a good quarter or two, but many enduring ones grow for years.

With $1.96 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.

As you can see below, Boston Beer’s revenue declined by 2% per year over the last three years, a rough starting point for our analysis.

This quarter, Boston Beer reported a rather uninspiring 4.1% year-on-year revenue decline to $385.7 million of revenue, in line with Wall Street’s estimates.

Looking ahead, sell-side analysts expect revenue to remain flat over the next 12 months. While this projection suggests its newer products will fuel better top-line performance, it is still below the sector average.

All else equal, we prefer higher gross margins because they make it easier to generate more operating profits and indicate that a company commands pricing power by offering more differentiated products.

Boston Beer has great unit economics for a consumer staples company, giving it ample room to invest in areas such as marketing and talent to grow its brand. As you can see below, it averaged an excellent 46.4% gross margin over the last two years. That means for every $100 in revenue, only $53.59 went towards paying for raw materials, production of goods, transportation, and distribution.

Boston Beer produced a 43.5% gross profit margin in Q4 , marking a 3.5 percentage point increase from 39.9% in the same quarter last year. Boston Beer’s full-year margin has also been trending up over the past 12 months, increasing by 4.1 percentage points. If this move continues, it could suggest better unit economics due to some combination of stable to improving pricing power and input costs (such as raw materials).

Boston Beer was profitable over the last two years but held back by its large cost base. Its average operating margin of 5.6% was weak for a consumer staples business. This result is surprising given its high gross margin as a starting point.

On the plus side, Boston Beer’s operating margin rose by 3.6 percentage points over the last year.

This quarter, Boston Beer generated an operating margin profit margin of negative 8.6%, up 5.4 percentage points year on year. The increase was solid, and because its operating margin rose more than its gross margin, we can infer it was more efficient with expenses such as marketing, and administrative overhead.

We track the long-term change in earnings per share (EPS) for the same reason as long-term revenue growth. Compared to revenue, however, EPS highlights whether a company’s growth is profitable.

Boston Beer’s EPS grew at a spectacular 21.5% compounded annual growth rate over the last three years, higher than its 2% annualized revenue declines. However, this alone doesn’t tell us much about its business quality because its operating margin didn’t improve.

In Q4, Boston Beer reported EPS of negative $2.12, up from negative $3.38 in the same quarter last year. This print easily cleared analysts’ estimates, and shareholders should be content with the results. Over the next 12 months, Wall Street expects Boston Beer’s full-year EPS of $9.77 to grow 6.6%.

Although earnings are undoubtedly valuable for assessing company performance, we believe cash is king because you can’t use accounting profits to pay the bills.

Boston Beer has shown robust cash profitability, driven by its attractive business model that enables it to reinvest or return capital to investors. The company’s free cash flow margin averaged 10.2% over the last two years, quite impressive for a consumer staples business. The divergence from its underwhelming operating margin stems from the add-back of non-cash charges like depreciation and stock-based compensation. GAAP operating profit expenses these line items, but free cash flow does not.

EPS and free cash flow tell us whether a company was profitable while growing its revenue. But was it capital-efficient? Enter ROIC, a metric showing how much operating profit a company generates relative to the money it has raised (debt and equity).

Boston Beer historically did a mediocre job investing in profitable growth initiatives. Its five-year average ROIC was 6.3%, somewhat low compared to the best consumer staples companies that consistently pump out 20%+.

We enjoyed seeing Boston Beer beat analysts’ gross margin expectations this quarter. We were also glad its EPS outperformed Wall Street’s estimates. Overall, this print had some key positives. The stock remained flat at $227.46 immediately after reporting.

Updated: February 24, 2026 at 4:23 PM EST

Before investing in or passing on Boston Beer, we urge you to understand the company’s business quality (or lack thereof), valuation, and the latest quarterly results - in that order.

Boston Beer isn’t a terrible business, but it doesn’t pass our bar. To begin with, its revenue has declined over the last three years. While its EPS growth over the last three years has been fantastic, the downside is its brand caters to a niche market. On top of that, its mediocre ROIC lags the market and is a headwind for its stock price.

Boston Beer’s P/E ratio based on the next 12 months is 21.7x. Investors with a higher risk tolerance might like the company, but we think the potential downside is too great. We're pretty confident there are superior stocks to buy right now.

Wall Street analysts have a consensus one-year price target of $240.15 on the company (compared to the current share price of $227.46).