The Fever-Tree Drinks share price is down 10% today. Here’s what I’d do now

first_img Click here to claim your copy now — and we’ll tell you the name of this Top US Share… free of charge! Our 6 ‘Best Buys Now’ Shares Image source: Getty Images. The AIM stock Fever-Tree Drinks (LSE: FEVR) is one of the worst performers today. The Fever-Tree Drinks share price has fallen 10% as I write, after it released its full-year 2020 results earlier today. Its revenues are down 3%. The mixer drinks manufacturer’s earning per share is down a whole 29% too. Yet, I think the Fever-Tree share price dip is an opportunity to buy the share. Here are two reasons why:5G is here – and shares of this ‘sleeping giant’ could be a great way for you to potentially profit!According to one leading industry firm, the 5G boom could create a global industry worth US$12.3 TRILLION out of thin air…And if you click here we’ll show you something that could be key to unlocking 5G’s full potential…#1. Future looks better for Fever-Tree DrinksThe foreseeable future looks much better for the company. First, the UK is coming out of lockdown. The UK is Fever-Tree Drinks’ biggest market, accounting for around half its total revenues. It saw a 22% fall in revenues in 2020, which can hopefully be turned around now. As the economy gets back on track, I think it is reasonable to assume an increase in demand for products like alcohol and mixers. They will definitely get a fillip from the reopening of bars and restaurants, which are also a significant source of revenue for the company.In line with this, it expects 12%–16% revenue growth in 2021, which is strong considering that in 2019, the last pre-Covid-19 year, revenue grew by a smaller 10%. #2. Expanding into new marketsWhile this growth can indeed be boosted from the UK’s re-opening, I also like Fever-Tree Drinks’ expansion into new markets. Specifically, the 23% growth in US markets is notable. The US accounts for more than 20% of its revenues already. With the US economy having made a smart comeback now, I reckon this market will continue to show strong growth. Further, 58% growth in the ‘rest of the world’, which means markets other than the UK, US, and Europe, reflects huge potential too. So far, the segment accounts for 10% of revenues but if it continues to expand at this rate, I think we can expect it to become more important in the years to come for the company. What can go wrong for the Fever-Tree Drinks share priceWhile all this bodes well for the Fever-Tree Drinks share price, I think it is important to look at the potential downside to the stock too. First, consider its price-to-earnings (P/E) ratio of 55 times. Despite its strong prospects, I think the ratio is a bit high. Stocks with strong performance in 2020 and continued prospects in 2021, like FTSE 100 miners for instance, are available at lower valuations. Two, the Fever-Tree Drinks share price is prone to volatility. The latest dip is one example, I have written about other instances in the past. Such fluctuations may not be every investor’s cup of tea (or cocktail, in this case). ConclusionThe Fever-Tree Drinks share price has a way of bouncing back. Since the lows of last March, it is up 2.5 times.While there is still much debate about whether we are heading for a slowdown or a boom, there is likely to be undeniable pent-up demand for outside entertainment, with drinks in the mix. I would still buy the stock. I’m sure you’ll agree that’s quite the statement from Motley Fool Co-Founder Tom Gardner.But since our US analyst team first recommended shares in this unique tech stock back in 2016, the value has soared.What’s more, we firmly believe there’s still plenty of upside in its future. In fact, even throughout the current coronavirus crisis, its performance has been beating Wall St expectations.And right now, we’re giving you a chance to discover exactly what has got our analysts all fired up about this niche industry phenomenon, in our FREE special report, A Top US Share From The Motley Fool. “This Stock Could Be Like Buying Amazon in 1997” Manika Premsingh | Thursday, 18th March, 2021 | More on: FEVR Enter Your Email Addresscenter_img Simply click below to discover how you can take advantage of this. Renowned stock-picker Mark Rogers and his analyst team at The Motley Fool UK have named 6 shares that they believe UK investors should consider buying NOW.So if you’re looking for more stock ideas to try and best position your portfolio today, then it might be a good day for you. Because we’re offering a full 33% off your first year of membership to our flagship share-tipping service, backed by our ‘no quibbles’ 30-day subscription fee refund guarantee. I would like to receive emails from you about product information and offers from The Fool and its business partners. Each of these emails will provide a link to unsubscribe from future emails. More information about how The Fool collects, stores, and handles personal data is available in its Privacy Statement. Manika Premsingh has no position in any of the shares mentioned. The Motley Fool UK has recommended Fevertree Drinks. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors. The Fever-Tree Drinks share price is down 10% today. Here’s what I’d do now See all posts by Manika Premsinghlast_img

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