At US$334, Is It Time To Put The Boston Beer Company, Inc. (NYSE:SAM) On Your Watch List?

While The Boston Beer Company, Inc. (NYSE:SAM) might not be the most widely known stock at the moment, it saw a decent share price growth in the teens level on the NYSE over the last few months. With many analysts covering the mid-cap stock, we may expect any price-sensitive announcements have already been factored into the stock’s share price. However, could the stock still be trading at a relatively cheap price? Today I will analyse the most recent data on Boston Beer Company’s outlook and valuation to see if the opportunity still exists.

View our latest analysis for Boston Beer Company

Is Boston Beer Company Still Cheap?

According to my valuation model, Boston Beer Company seems to be fairly priced at around 14% below my intrinsic value, which means if you buy Boston Beer Company today, you’d be paying a fair price for it. And if you believe the company’s true value is $390.22, then there’s not much of an upside to gain from mispricing. Furthermore, Boston Beer Company’s low beta implies that the stock is less volatile than the wider market.

What does the future of Boston Beer Company look like?

Future outlook is an important aspect when you’re looking at buying a stock, especially if you are an investor looking for growth in your portfolio. Although value investors would argue that it’s the intrinsic value relative to the price that matter the most, a more compelling investment thesis would be high growth potential at a cheap price. With revenues expected to grow by a double-digit 20% over the next couple of years, the outlook is positive for Boston Beer Company. If the level of expenses is able to be maintained, it looks like higher cash flow is on the cards for the stock, which should feed into a higher share valuation.

What This Means For You

Are you a shareholder? SAM’s optimistic future growth appears to have been factored into the current share price, with shares trading around its fair value. However, there are also other important factors which we haven’t considered today, such as the track record of its management team. Have these factors changed since the last time you looked at the stock? Will you have enough confidence to invest in the company should the price drop below its fair value?

Are you a potential investor? If you’ve been keeping an eye on SAM, now may not be the most optimal time to buy, given it is trading around its fair value. However, the positive outlook is encouraging for the company, which means it’s worth diving deeper into other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.

If you'd like to know more about Boston Beer Company as a business, it's important to be aware of any risks it's facing. While conducting our analysis, we found that Boston Beer Company has 1 warning sign and it would be unwise to ignore it.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.