Boston Beer Co. (NYSE:SAM) is set to report FQ1 2014 earnings after the market closes on Wednesday, April 30th. Boston Beer Co. are the producers of Sam Adams beer. The craft beer movement has taken off over the past 5 years and Sam Adams has been a leader in that category. Boston Beer has reported year over revenue growth in each of the past 8 quarters and Wall Street expects that trend to continue on Wednesday. Here’s what investors are expecting from the makers of Sam Adams on Wednesday.
The information below is derived from data submitted to the Estimize.com platform by a set of Buy Side and Independent analyst contributors.
The current Wall Street consensus expectation is for Boston Beer to report 71c EPS and $170.67M revenue, while the current Estimize.com consensus from 9 Buy Side and Independent contributing analysts is 72c EPS and $172.74M in revenue. This quarter the buy-side as represented by the Estimize.com community is expecting Boston Beer to beat Wall Street’s expectations by a small margin on both EPS and revenue.
Over the past 6 quarters, the consensus from Estimize.com has been more accurate than Wall Street in forecasting Boston Beer’s EPS and revenue 2 and 4 times respectively. By tapping into a wider range of contributors including hedge-fund analysts, asset managers, independent research shops, students, and non-professional investors, Estimize has created a data set that is more accurate than Wall Street up to 69.5% of the time, but more importantly it does a better job of representing the market’s actual expectations. It has been confirmed by Deutsche Bank Quant. Research and an independent academic study from Rice University that stock prices tend to react with a more strongly associated degree to the expectation benchmark from Estimize than from the Wall Street consensus.
The magnitude of the difference between the Wall Street and Estimize consensus numbers often identifies opportunities to take advantage of expectations that may not have been priced into the market. In this case, we are seeing a small differential between the two groups’ expectations on Boston Beer’s earnings.
The distribution of estimates published by analysts on the Estimize.com platform range from 69c to 76c EPS and from $166.78M to $180.00M in revenues. This quarter we’re seeing a narrow range of estimates on Boston Beer’s EPS and wide range of revenue predictions.
The size of the distribution of estimates relative to previous quarters often signals whether or not the market is confident that it has priced in the expected earnings already. A narrower distribution of EPS estimates signals more agreement in the market, which could mean less volatility post earnings.
This quarter the Wall Street EPS consensus increased from 70c to 71c, while the Estimize consensus rose from 69c to 72c. Meanwhile, the Wall Street revenue consensus remained flat, while the Estimize consensus surged from $168.79M to $172.74M. Timeliness is correlated with accuracy and upward analyst revenue revisions going into an earnings report are often a bullish indicator. (click to enlarge)
The analyst with the highest estimate confidence rating this quarter is turbinecity, who projects 75c EPS and $171.67M in revenue. turbinecity was our Winter 2014 season winner and is ranked 3rd overall among over 4,300 contributing analysts. Over the past 2 years turbinecity has been more accurate than Wall Street in forecasting EPS and revenue 59% and 54% of the time respectively throughout over 2000 estimates. Estimate confidence ratings are calculated through algorithms developed by deep quantitative research, which looks at correlations between analyst track records and tendencies as they relate to future accuracy. In this case, turbinecity is expecting Boston Beer to beat earnings estimates on a comfortable margin while reporting between the projections from Wall Street and Estimize on revenue.
This quarter contributing analysts on the Estimize.com platform are expecting Boston Beer to come in just ahead of the Street’s expectations. The community is also estimating that year over year sales will come in at a whopping 27% and that EPS will increase by 21c compared to FQ1 of last year. For now it remains a good time to be one of the largest players in the craft beer movement.