Boston Beer Company (SAM): Assessing Valuation After $50 Million Share Buyback Authorization

Boston Beer Company (SAM) just revealed that its Board has approved a new share buyback program, giving it the green light to purchase up to $50 million of its own stock by December 2025. For investors, these kinds of buyback authorizations can stand out, as they often hint that management believes shares might be undervalued or that there are currently better uses for capital than spending on growth. The announcement follows a period where Boston Beer has been recalibrating its business, and this move could be read as a signal of internal confidence amid shifting industry trends.

Shares of Boston Beer have had a rocky ride lately. While the stock is up about 4% over the past month, it is down 21% for the year and off 36% over the past three years. The share repurchase news comes after a tough stretch for the company, with modest sales growth but a sharp rise in net income this past year. These factors might help shift investor sentiment if buybacks succeed in lending support to the stock price.

This raises a critical question for anyone eyeing Boston Beer today: does the buyback mark a turning point and highlight value, or is the market already pricing in whatever growth is ahead?

Most Popular Narrative: 8.3% Undervalued

According to community narrative, Boston Beer Company is currently valued below its estimated fair value, based on analyst expectations of future earnings and profit margin expansion.

Ongoing productivity initiatives (brewery efficiency, procurement and waste reduction) are structurally raising gross margins. These efforts are expected to continue benefiting earnings as volume normalizes and as new, margin-accretive products (such as Sun Cruiser) scale. Strong brand equity and resilient premiumization across core portfolios including Twisted Tea, Truly, Samuel Adams, and Sun Cruiser support pricing power and encourage repeat purchasing. This enables both revenue stability and net margin protection, even during periods of temporary volume pressure.

Think Boston Beer's future looks ordinary? Think again. Behind this valuation is a story of margin improvements and a brewing transformation in profitability. Interested in which factors analysts anticipate will drive this turnaround and which future metric makes this price especially notable? Explore the narrative to uncover the key financial forecasts supporting today's fair value target.

Result: Fair Value of $243.94 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, persistent declines in beer demand or disappointing sales from new product launches could quickly challenge this optimistic view of Boston Beer's outlook.

Find out about the key risks to this Boston Beer Company narrative.

Another View: DCF Model Suggests a Bigger Discount

Looking through the lens of our DCF model, a different story emerges. This approach points to Boston Beer being even more undervalued than what the standard valuation ratios indicate. Could the market be missing something deeper here?

Look into how the SWS DCF model arrives at its fair value.

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Boston Beer Company for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover undervalued stocks based on their cash flows. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Build Your Own Boston Beer Company Narrative

If you have a different take or want to analyze the numbers for yourself, you can build a fresh perspective in just a few minutes, so do it your way.

A great starting point for your Boston Beer Company research is our analysis highlighting 2 key rewards and 1 important warning sign that could impact your investment decision.

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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.

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