Five Below
FIVE
$203.19
+0.93%
Five Below is a specialty value retailer that offers a broad assortment of trend-right, high-quality products targeting tweens, teens, and the young-at-heart, operating in the discount retail industry. The company distinguishes itself through a unique 'edited assortment' model, curating a mix of select brands and licensed merchandise across categories like fashion, leisure, and party snacks, while maintaining a price point that appeals to value-conscious consumers. The current investor narrative centers on Five Below's ability to sustain robust growth amid macroeconomic headwinds, with recent quarterly revenue surging over 30% year-over-year, though the stock has experienced volatility due to concerns over consumer spending and tariff impacts. The company's strong Q4 performance and bullish guidance have reinforced confidence in its turnaround strategy under new leadership, making it a focal point for debates on retail resilience.…
FIVE
Five Below
$203.19
Related headlines
Investment Opinion: Should I buy FIVE Today?
Rating: Buy. Five Below's accelerating revenue growth, expanding margins, and attractive forward valuation support a bullish thesis. The consensus analyst rating is Buy with an average target of $260.48, implying 28.2% upside.
Supporting Evidence: Q1 2026 revenue grew 32.5% YoY to $1.286B, net margin improved to 9.57% from 4.24% a year ago, and forward P/E of 20.81x is below the trailing 29.44x, indicating expected earnings growth. The PEG ratio of 0.71 suggests the stock is undervalued relative to its growth rate. Free cash flow TTM of $505M provides financial flexibility.
Risks & Conditions: Key risks include macro headwinds pressuring consumer spending, high debt-to-equity of 0.93, and potential tariff impacts. This Buy rating would be downgraded to Hold if revenue growth decelerates below 15% or if the forward P/E expands above 25x. Conversely, it could be upgraded if the stock pulls back to $180 without deterioration in fundamentals. Overall, Five Below appears fairly valued to slightly undervalued relative to its growth prospects.
Sign up to view all
FIVE 12-Month Price Forecast
Five Below's strong operational momentum and attractive valuation support a bullish stance, but macro risks and high debt temper confidence. The base case of 20-25% growth and $230-260 target is most likely. An upgrade would require sustained revenue growth above 30% and margin expansion; a downgrade would follow if growth decelerates below 15% or the forward P/E exceeds 25x.
Wall Street consensus
Most Wall Street analysts maintain a constructive view on Five Below's 12-month outlook, with a consensus price target around $260.48 and implied upside of +28.2% versus the current price.
Average Target
$260.48
0 analysts
Implied Upside
+28.2%
vs. current price
Analyst Count
—
covering this stock
Price Range
$210 - $325
Analyst target range
Five Below is covered by 21 analysts, with a consensus recommendation of 'Buy' (mean score 1.72 on a 1-5 scale where 1 is Strong Buy). The average target price is $260.48, implying approximately 28.2% upside from the current price of $203.19. The distribution shows a bullish lean, with no sell ratings and a majority of buy-equivalent ratings. Recent upgrades from Mizuho (Neutral to Outperform) and consistent Buy ratings from Guggenheim and Loop Capital reinforce positive sentiment, though Wolfe Research's downgrade from Outperform to Peer Perform introduces some caution.
Bulls vs Bears: FIVE Investment Factors
Five Below presents a compelling bull case with accelerating revenue growth (32.5% YoY), expanding margins, and a consensus Buy rating with 28% upside. However, bearish concerns center on macro headwinds, elevated debt, and post-earnings volatility that suggests market skepticism. The single most important tension is whether the company can sustain its growth trajectory amid consumer spending uncertainty and tariff risks. Currently, the bull case has stronger evidence given the tangible financial momentum, but the stock's high beta (1.002) and sensitivity to macro shifts warrant caution.
Bullish
- Revenue Growth Accelerating: Q1 2026 revenue surged 32.46% YoY to $1.286B, up from 6.0% growth in the prior-year quarter, signaling a successful turnaround and market share gains.
- Strong Analyst Consensus: 21 analysts rate the stock a Buy (mean 1.72/5), with an average target of $260.48, implying 28.2% upside from the current $203.19.
- Improving Profitability: Net margin expanded to 9.57% in Q1 2026 from 4.24% a year ago, while operating margin rose to 12.0% from 5.24%, reflecting operating leverage.
- Low Forward P/E: Forward P/E of 20.81x is well below the trailing 29.44x, implying expected earnings growth of 41.5%, and the PEG ratio of 0.71 suggests undervaluation relative to growth.
Bearish
- Stock Volatility Post-Earnings: Shares dropped 12% after Q1 earnings despite strong results, indicating investor anxiety over consumer spending and tariff risks.
- High Debt-to-Equity: Debt-to-equity of 0.93 is elevated for a retailer, increasing financial risk if sales growth slows or interest rates remain high.
- Macro Headwinds: Stagflation fears from surging oil and hawkish Fed could pressure consumer discretionary spending, directly impacting Five Below's core tween/teen demographic.
- Valuation Near 52-Week High: At $203.19, the stock sits at 60.4% of its 52-week range, with a trailing P/E of 29.44x, leaving limited margin of safety if growth disappoints.
FIVE Technical Analysis
Five Below is in a clear long-term uptrend, with the stock price up 48.27% over the past year, significantly outperforming the S&P 500's 16.47% gain. The current price of $203.19 sits at 60.4% of its 52-week range ($130.00 low to $251.63 high), indicating the stock has pulled back from its highs but remains well above the lows. This positioning suggests a consolidation phase after a strong run, with potential for further upside if momentum resumes, but also risk of extended weakness if support levels break. The 1-year relative strength of 31.80% versus the S&P 500 underscores the stock's strong relative performance over the long term.
Beta
1.00
1.00x market volatility
Max Drawdown
-28.9%
Largest decline past year
52-Week Range
$130-$252
Price range past year
Annual Return
+48.3%
Cumulative gain past year
| Period | FIVE Return | S&P 500 |
|---|---|---|
| 1m | +8.2% | +1.4% |
| 3m | -13.2% | +3.3% |
| 6m | +6.7% | +6.3% |
| 1y | +48.3% | +16.0% |
| ytd | +5.0% | +8.4% |
Bobby - Your AI Investment Partner
Get real-time data, AI-driven personalized investment analysis to make smarter investment decisions
FIVE Fundamental Analysis
Five Below's revenue trajectory is accelerating, with the most recent quarter (Q1 2026) reporting revenue of $1.2856 billion, a 32.46% year-over-year increase, up from 6.0% growth in the prior-year quarter. This acceleration is driven by strong performance across all segments, particularly Leisure ($620.9M) and Fashion & Home ($352.6M), indicating broad-based demand. The multi-quarter trend shows revenue growth improving from 6.0% in Q1 2025 to 32.5% in Q1 2026, signaling a successful turnaround and market share gains. This growth trajectory supports the investment case for a retailer executing well in a challenging consumer environment.
Quarterly Revenue
$1.3B
2026-05
Revenue YoY Growth
+32.5%
YoY Comparison
Gross Margin
33.3%
Latest Quarter
Free Cash Flow
$505269000.0B
Last 12 Months
Revenue & Net Income Trends (2 Years)
Revenue Breakdown
Open an Account, get $2 TSLA now!
Valuation Analysis: Is FIVE Overvalued?
Since Five Below has positive net income ($123.056M in Q1 2026), the primary valuation metric is the P/E ratio. The trailing P/E is 29.44x, while the forward P/E is 20.81x, implying the market expects significant earnings growth. The gap between trailing and forward P/E suggests analysts anticipate a 41.5% earnings increase over the next year, reflecting optimism about margin expansion and continued revenue growth. This forward discount is typical for growth retailers with improving profitability.
PE
29.4x
Latest Quarter
vs. Historical
Low-End
5-Year PE Range 7x~129x
vs. Industry Avg
N/A
Industry PE ~N/A*
EV/EBITDA
17.7x
Enterprise Value Multiple
Investment Risk Disclosure
Financial & Operational Risks: Five Below's debt-to-equity of 0.93 is high for a discount retailer, increasing vulnerability to rising interest rates or a downturn. While the current ratio of 2.01 provides liquidity, the company's net margin of 9.57% is still below the prior Q4's 13.78%, indicating margin pressure from cost inflation. Revenue concentration in seasonal and trend-driven categories could lead to earnings volatility if consumer preferences shift. The company's reliance on continued store growth and comparable sales increases to justify its forward P/E of 20.81x adds execution risk.
Market & Competitive Risks: The stock's beta of 1.002 implies high correlation with the broader market, making it susceptible to sector rotation out of consumer cyclicals. Competitors like Dollar General and Dollar Tree offer similar value propositions, and Five Below's higher price points (up to $5) may face resistance if inflation persists. Recent news highlights tariff concerns and stagflation fears, which could compress the stock's multiple from its current trailing P/E of 29.44x. The 12% post-earnings drop despite strong results underscores fragile investor sentiment.
Worst-Case Scenario: A prolonged consumer spending slowdown combined with tariff cost increases could cause revenue growth to decelerate below 10%, leading to multiple compression. In this scenario, the stock could fall to its 52-week low of $130.00, representing a 36% decline from the current price of $203.19. This would imply a trailing P/E of roughly 18.8x based on current earnings, a level not seen since 2023. The max drawdown of -28.85% over the past year provides a reference for potential downside.
FAQ
The primary risks are: 1) Macroeconomic headwinds pressuring consumer spending, especially among its tween/teen demographic; 2) High debt-to-equity of 0.93, increasing financial vulnerability; 3) Tariff exposure that could compress margins if costs cannot be passed through; 4) Stock volatility, as evidenced by the 12% post-earnings drop despite strong results. The most severe risk is a recession causing revenue growth to decelerate below 10%, potentially driving the stock to its 52-week low of $130.
Analysts forecast a base case price target of $260.48 (28.2% upside), with a bull case of $325 (60% upside) if growth accelerates and margins expand, and a bear case of $130 (36% downside) if macro headwinds intensify. The base case assumes 20-25% revenue growth and stable margins, with a 50% probability. The bull case (30% probability) requires sustained 30%+ growth, while the bear case (20% probability) reflects a recession scenario.
Based on a forward P/E of 20.81x and a PEG ratio of 0.71, Five Below appears undervalued relative to its expected earnings growth of 41.5%. The trailing P/E of 29.44x is above the broader market but reasonable for a growth retailer. Compared to discount store peers, Five Below trades at a premium, but its superior growth trajectory justifies the multiple. The market is pricing in continued strong execution, and any disappointment could lead to multiple compression.
Five Below presents a favorable risk/reward profile for growth-oriented investors. With a consensus Buy rating, 28.2% upside to the average analyst target of $260.48, and a forward P/E of 20.81x that is below its trailing multiple, the stock appears attractively valued. However, the 12% post-earnings drop highlights market anxiety over macro headwinds. It is a good buy for those willing to tolerate volatility and who believe the company can sustain 20%+ revenue growth. Conservative investors may prefer to wait for a pullback to $180 or confirmation of margin expansion.
Five Below is better suited for long-term investment given its growth trajectory and the time needed for its turnaround to fully materialize. The stock's beta of 1.002 and recent volatility make it risky for short-term trading. A minimum holding period of 12-18 months is recommended to allow the company to execute on its growth plans and for the market to recognize its value. The absence of a dividend means returns are entirely dependent on price appreciation, aligning with a growth-oriented strategy.