Just a few years ago, Boston Beer (SAM 1.86%) was a high-flying stock.

Gone now are the days of double-digit revenue growth, and we’re now looking at a business that is moving at a much slower pace. Based on the guidance for 2025, the stock is conservatively trading at around 28 times forward earnings. That’s not the worst valuation, but this story still needs more meaningful top-line gains if the maker of Samuel Adams and other brands is to get its mojo back.

My overall take is that the sluggish top-line growth demonstrated by the brewer over the last few years makes it a difficult buy — despite how much I like their beer. Here’s why.

A slowing game

Boston Beer’s revenue chart over the last five years paints a picture of slowing dynamics. The company went from more than 39% top-line growth in 2020 to a 3.9% decline in 2023, and a mere 0.2% increase in 2024 to $2.01 billion. This isn’t the type of performance that sparks long-term confidence. In order for Boston Beer to continue creating value for shareholders, it will have to produce revenue growth.

In terms of earnings for 2024, it will be more useful for investors to look at adjusted results than those based on generally accepted accounting principles (GAAP), as the company incurred a major brand impairment charge/settlement expense amounting to $4.37 per share. On a non-GAAP basis, Boston Beer earned $9.43 per diluted share. That’s a 31.5% gain year over year. Its 2025 earnings guidance, which excludes impairments and is on a GAAP basis, doesn’t point to a ton of change.

GAAP earnings are anticipated to be in the range of $8.00 to $10.50 per share, which isn’t very different from the 2024 results including the impairment charge. Management expects depletions (the number of units sold by distributors) to land in a range of down by a single-digit percentage point to up by a single-digit percentage point, while prices of goods are anticipated to increase by 1% to 2%.

A tougher market

In recent years, Boston Beer has focused on diversifying its lineup with beverages such as Truly hard seltzer. This seems like an essential strategy given the sales trends in craft beer. According to an estimate by the Brewers Association, craft beer production declined by 2% in 2024 following a 1% decline in 2023.

Now, it’s fair to say that Boston Beer as a whole has arguably grown beyond the scale of what many might consider a “craft” brewer, but it’s still heavily dependent on its Sam Adams brand. Weakness on that front will make it difficult for Boston Beer to grow meaningfully.

Valuation issues

In its fourth-quarter earnings release, the company noted that it plans to increase its advertising spending. Hopefully, that will prove beneficial, but my main argument against buying Boston Beer stock is that there are simply better places to put your money.

Analysts’ consensus estimates are for it to deliver earnings of $10.26 per share in 2025. That’s not far from the high end of the company’s guidance, and would give it a forward P/E ratio of around 22.8. Ordinarily, I’d call that a good buy. The problem is, there’s just not a lot happening to drive this stock upward. Revenue is arguably stagnant, and if the craft beer market remains stagnant, there’s not a lot to be expected on that front.

On a balance sheet basis, things aren’t looking that stellar either. Total stockholders equity declined to $916 million, but the stock is trading at a market capitalization of nearly $2.7 billion.

In many ways, Boston Beer is a victim of the trends it helped propel. It pioneered a boom in craft beer sales in the United States, and inspired thousands of upstarts to take their own swings at creating the next big craft brew. Now, it’s competing in a much more saturated craft beer market. Overall, I think it’s better to invest in companies that have greater competitive advantages.

Naysayers of my bearish stance might point to the company’s soon-to-launch Sun Cruiser brand of vodka and iced tea cocktails. These new canned mixed drinks will indeed further diversify Boston Beer’s lineup, but it’s unclear if it will do much to help the broader picture. If the company is to grow, it still needs its craft beer brands to do well.