Is Now An Opportune Moment To Examine Fevertree Drinks PLC (LON:FEVR)?

Fevertree Drinks PLC (LON:FEVR), might not be a large cap stock, but it led the AIM gainers with a relatively large price hike in the past couple of weeks. The recent rally in share prices has nudged the company in the right direction, though it still falls short of its yearly peak. With many analysts covering the stock, we may expect any price-sensitive announcements have already been factored into the stock’s share price. However, could the stock still be trading at a relatively cheap price? Today we will analyse the most recent data on Fevertree Drinks’s outlook and valuation to see if the opportunity still exists.

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Is Fevertree Drinks Still Cheap?

Great news for investors – Fevertree Drinks is still trading at a fairly cheap price. Our valuation model shows that the intrinsic value for the stock is £12.77, but it is currently trading at UK£8.81 on the share market, meaning that there is still an opportunity to buy now. Although, there may be another chance to buy again in the future. This is because Fevertree Drinks’s beta (a measure of share price volatility) is high, meaning its price movements will be exaggerated relative to the rest of the market. If the market is bearish, the company's shares will likely fall by more than the rest of the market, providing a prime buying opportunity.

See our latest analysis for Fevertree Drinks

What kind of growth will Fevertree Drinks generate?

Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. Buying a great company with a robust outlook at a cheap price is always a good investment, so let’s also take a look at the company's future expectations. Fevertree Drinks' earnings over the next few years are expected to increase by 74%, indicating a highly optimistic future ahead. This should lead to more robust cash flows, feeding into a higher share value.

What This Means For You

Are you a shareholder? Since FEVR is currently undervalued, it may be a great time to accumulate more of your holdings in the stock. With an optimistic outlook on the horizon, it seems like this growth has not yet been fully factored into the share price. However, there are also other factors such as capital structure to consider, which could explain the current undervaluation.

Are you a potential investor? If you’ve been keeping an eye on FEVR for a while, now might be the time to make a leap. Its buoyant future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy FEVR. But before you make any investment decisions, consider other factors such as the strength of its balance sheet, in order to make a well-informed buy.

It can be quite valuable to consider what analysts expect for Fevertree Drinks from their most recent forecasts. So feel free to check out our free graph representing analyst forecasts.

If you are no longer interested in Fevertree Drinks, you can use our free platform to see our list of over 50 other stocks with a high growth potential.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.