NEW YORK (TheStreet) -- Boston Beer (SAM) shares are down -8.9% to $224.04 on Thursday following the release of the company's first quarter earnings report.
The Samuel Adams brand beer producer posted a 35% net revenue increase from the year ago period to $183.8 million, ahead of consensus estimates of $174 million.
However, the company posted a net income of 8.3 million for the quarter, or 62 cents per diluted share, missing analysts consensus estimates by 6 cents.
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TheStreet Ratings team rates BOSTON BEER INC as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:
"We rate BOSTON BEER INC (SAM) a BUY. This is driven by some important positives, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its robust revenue growth, growth in earnings per share, good cash flow from operations, solid stock price performance and largely solid financial position with reasonable debt levels by most measures. Although no company is perfect, currently we do not see any significant weaknesses which are likely to detract from the generally positive outlook."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The revenue growth greatly exceeded the industry average of 2.7%. Since the same quarter one year prior, revenues rose by 34.2%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- BOSTON BEER INC has improved earnings per share by 6.4% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year. We feel that this trend should continue. During the past fiscal year, BOSTON BEER INC increased its bottom line by earning $5.18 versus $4.40 in the prior year. This year, the market expects an improvement in earnings ($6.40 versus $5.18).
- Net operating cash flow has slightly increased to $33.10 million or 8.39% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -24.39%.
- Investors have apparently begun to recognize positive factors similar to those we have mentioned in this report, including earnings growth. This has helped drive up the company's shares by a sharp 42.67% over the past year, a rise that has exceeded that of the S&P 500 Index. We feel that the stock's sharp appreciation over the last year has driven it to a price level which is now somewhat expensive compared to the rest of its industry. The other strengths this company shows, however, justify the higher price levels.
- 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. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.89 is somewhat weak and could be cause for future problems.
- You can view the full analysis from the report here: SAM Ratings Report