When The Boston Beer Company, Inc. (NYSE:SAM) released its most recent earnings update (28 September 2019), I wanted to understand how these figures stacked up against its past performance. The two benchmarks I used were Boston Beer Company's average earnings over the past couple of years, and its industry performance. These are useful yardsticks to help me gauge whether or not SAM actually performed well. Below is a quick commentary on how I see SAM has performed.
How Did SAM's Recent Performance Stack Up Against Its Past?
SAM's trailing twelve-month earnings (from 28 September 2019) of US$117m has jumped 16% compared to the previous year.
Furthermore, this one-year growth rate has exceeded its 5-year annual growth average of 3.1%, indicating the rate at which SAM is growing has accelerated. What's the driver of this growth? Let's take a look at whether it is only owing to industry tailwinds, or if Boston Beer Company has seen some company-specific growth.
In terms of returns from investment, Boston Beer Company has fallen short of achieving a 20% return on equity (ROE), recording 16% instead. However, its return on assets (ROA) of 11% exceeds the US Beverage industry of 10%, indicating Boston Beer Company has used its assets more efficiently. Though, its return on capital (ROC), which also accounts for Boston Beer Company’s debt level, has declined over the past 3 years from 25% to 19%.
What does this mean?
While past data is useful, it doesn’t tell the whole story. Companies that have performed well in the past, such as Boston Beer Company gives investors conviction. However, the next step would be to assess whether the future looks as optimistic. I recommend you continue to research Boston Beer Company to get a more holistic view of the stock by looking at:
- Future Outlook: What are well-informed industry analysts predicting for SAM’s future growth? Take a look at our free research report of analyst consensus for SAM’s outlook.
- Financial Health: Are SAM’s operations financially sustainable? Balance sheets can be hard to analyze, which is why we’ve done it for you. Check out our financial health checks here.
- Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.
NB: Figures in this article are calculated using data from the trailing twelve months from 28 September 2019. This may not be consistent with full year annual report figures.
If you spot an error that warrants correction, please contact the editor at email@example.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.