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Fevertree’s 2018 Stock Surge Has Lost Its Fizz

Company has provided November trading update in past 3 years
Shares still trade at 46 times next year’s estimated earnings

Bottles of Fever-Tree tonic water, produced by Fevertree Drinks Plc, sit on display inside a J Sainsbury Plc supermarket in Redhill, U.K., on Tuesday, March 27, 2018. Mike Coupe, J Sainsbury chief executive officer, spoke of the importance of having a strong online presence and improving efficiency to compete with Amazon.Photographer: Simon Dawson/Bloomberg

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By Paul Jarvis and Lisa Pham

November 28, 2018 at 9:53 AM UTC

Updated on

November 28, 2018 at 11:47 AM UTC

This article is for subscribers only.

As recently as September, Fevertree Drinks Plc was the apple of investors’ eyes. Shares in the U.K. premium tonic maker were up more than 70 percent on the year and on course to repeat their feat of almost doubling in both 2016 and 2017.

Fast-forward less than three months and the situation looks very different. Concern at Fevertree’s spiraling valuation has sent it into a tailspin at a time when growth stocks generally have been in the eye of a market storm. Wednesday’s drop of as much as 6.7 percent means it has fallen into negative territory for the year. But even so, the forward price-earnings multiple remains an eye-popping 46 times, according to data compiled by Bloomberg.