Is Boston Beer Co., Inc. overvalued or undervalued?

As of 31 January 2025, the valuation grade for Boston Beer Co., Inc. has moved from expensive to very expensive, indicating a significant shift in its market perception. The company is currently overvalued, with a P/E ratio of 19, which is higher than the industry average of approximately 17.28. Additionally, the EV to EBITDA stands at 8.84, suggesting a premium valuation compared to its peers, where the average is around 8.16. The PEG ratio of 0.65 further highlights the disconnect between growth expectations and current pricing.
In comparison to its peers, Boston Beer Co. is positioned unfavorably, as evidenced by its higher P/E ratio relative to the industry average and its EV to EBIT of 13.71, which is above the peer average. The company's recent stock performance has also been poor, with a year-to-date return of -34.10%, significantly underperforming the S&P 500's return of 2.44% for the same period. This combination of high valuation ratios and disappointing stock performance reinforces the conclusion that Boston Beer Co., Inc. is overvalued in the current market environment.