Five Below
FIVE
$244.54
+1.17%
Five Below, Inc. is a specialty value retailer that offers a broad assortment of trend-right, high-quality products—including select brands and licensed merchandise—at price points primarily under $5, targeting tweens, teens, and the 'kid in all of us.' The company operates over 1,700 stores across the United States, positioning itself as a dominant player in the extreme-value retail segment, competing with dollar stores and mass merchandisers through a differentiated treasure-hunt shopping experience. The current investor narrative centers on Five Below's remarkable turnaround under CEO Winnie Park, highlighted by a 32.5% revenue surge in the latest quarter and a 70.5% stock price appreciation over the past year, yet tempered by concerns over consumer spending fragility, tariff impacts, and a post-earnings selloff in June 2026 that raised questions about valuation sustainability. The market is debating whether the company's strong execution and growth trajectory can justify its premium valuation amid macroeconomic headwinds.…
FIVE
Five Below
$244.54
Related headlines
Investment Opinion: Should I buy FIVE Today?
Based on the analysis, FIVE is rated a Buy. The company's accelerating revenue growth, strong execution, and attractive PEG ratio of 0.71 support a positive outlook. The average analyst target of $260.48 implies a 12.7% upside, and the consensus recommendation is 'Buy'.
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FIVE 12-Month Price Forecast
The AI assessment is bullish with medium confidence. The company's exceptional growth and attractive valuation on a PEG basis support a positive outlook. However, the medium confidence reflects the uncertainty around consumer spending and tariff impacts. If the company can sustain growth above 25% and maintain margins, the stock is likely to outperform. Key developments to watch include Q2 earnings and holiday sales, which will provide clarity on the sustainability of growth.
Wall Street consensus
Most Wall Street analysts maintain a constructive view on Five Below's 12-month outlook, with a consensus price target around $269.29 and implied upside of +10.1% versus the current price.
Average Target
$269.29
0 analysts
Implied Upside
+10.1%
vs. current price
Analyst Count
—
covering this stock
Price Range
$220 - $350
Analyst target range
The target range spans from $210 to $325, a spread of $115, indicating moderate uncertainty about the stock's future performance. The high target of $325 implies a 40.6% upside, likely assuming that Five Below can sustain its 30%+ revenue growth and expand operating margins beyond the current 12.0% level, potentially through improved supply chain efficiencies and private label penetration. The low target of $210, which is 9.1% below the current price, suggests that if consumer spending weakens or tariffs materially impact costs, the stock could correct. Recent institutional ratings show a mixed but generally positive trend, with Mizuho upgrading from Neutral to Outperform in July 2026, while Wolfe Research downgraded from Outperform to Peer Perform in June, reflecting some divergence in near-term expectations. The wide range highlights the market's uncertainty regarding the sustainability of Five Below's growth in a challenging macroeconomic environment.
Bulls vs Bears: FIVE Investment Factors
Five Below presents a compelling growth story with accelerating revenue, strong execution, and a PEG ratio suggesting undervaluation. However, the post-earnings selloff and high valuation highlight concerns about sustainability in a fragile consumer environment. Currently, the bull case has stronger evidence due to the company's proven ability to grow and manage costs, but the key tension lies in whether consumer spending and tariff impacts will derail the growth trajectory. If growth continues at 30%+, the stock is undervalued; if it decelerates, the premium valuation could lead to a sharp correction.
Bullish
- Revenue Growth Accelerating to 32.5%: Q1 FY2026 revenue surged 32.5% YoY to $1.286B, up from 15.4% in the prior-year quarter, marking a significant acceleration. This growth is driven by strong performance across all segments, including Leisure ($620.9M) and Fashion & Home ($352.6M), and new store openings.
- PEG Ratio of 0.71 Signals Undervaluation: With a forward PE of 23.7x and expected EPS growth of ~24%, the PEG ratio of 0.71 suggests the stock is undervalued relative to its growth rate. This implies the market is not fully pricing in the company's earnings acceleration, offering upside potential.
- Strong Analyst Consensus with 12.7% Upside: The average analyst target price is $260.48, implying a 12.7% upside from the current price of $231.12. With a 'Buy' recommendation and 21 analysts covering, the consensus is positive, and the high target of $325 suggests 40.6% upside if growth sustains.
- Successful Tariff Management: Despite Trump-era tariffs, Q4 FY2025 showed a strong earnings beat and bullish guidance, demonstrating the company's ability to manage cost pressures. This resilience reduces a key bear case risk and supports margin stability.
Bearish
- Post-Earnings Selloff Signals Valuation Concerns: After Q1 earnings on June 4, 2026, the stock dropped 12% in a single day, reflecting investor anxiety over consumer spending and tariff impacts. This suggests the market is questioning whether the premium valuation is justified.
- High Valuation with PE of 29.4x: The trailing PE of 29.4x is above the specialty retail average, indicating a premium valuation. If growth decelerates, the stock could face multiple compression, leading to significant downside.
- Consumer Spending Fragility: The selloff was driven by forward-looking fears about consumer spending, as rising inflation and economic uncertainty could pressure discretionary purchases. A slowdown in comparable sales would directly impact revenue growth.
- Wide Analyst Target Range Indicates Uncertainty: The target range spans from $210 to $325, a $115 spread, reflecting moderate uncertainty. The low target of $210 is 9.1% below the current price, suggesting that if consumer spending weakens, the stock could correct.
FIVE Technical Analysis
Five Below's stock is in a powerful long-term uptrend, with a 1-year price change of +70.5%, significantly outperforming the S&P 500's +21.5% over the same period. The current price of $231.12 sits at 91.8% of the 52-week range (between $131.40 low and $251.63 high), indicating the stock is trading near its highs, reflecting strong momentum and investor confidence, though it also suggests potential overextension. The stock's beta of 0.975 indicates volatility roughly in line with the broader market, providing some stability relative to its growth profile.
Beta
0.97
0.97x market volatility
Max Drawdown
-28.9%
Largest decline past year
52-Week Range
$132-$252
Price range past year
Annual Return
+82.0%
Cumulative gain past year
| Period | FIVE Return | S&P 500 |
|---|---|---|
| 1m | +26.7% | +2.9% |
| 3m | +14.5% | +5.0% |
| 6m | +18.7% | +13.9% |
| 1y | +82.0% | +20.4% |
| ytd | +26.4% | +13.8% |
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FIVE Fundamental Analysis
Five Below's revenue trajectory is robustly accelerating, with the most recent quarter (Q1 FY2026, ended May 2, 2026) reporting revenue of $1.286 billion, a 32.5% year-over-year increase, up from 15.4% growth in the prior year's Q1. This marks a significant acceleration from the 23.7% growth seen in Q4 FY2025 and the 10.4% growth in Q3 FY2025, driven by strong performance across all segments, particularly Leisure ($620.9M) and Fashion & Home ($352.6M), as well as new store openings and robust comparable sales. The company's growth is being fueled by its 'Five Beyond' initiative, expanding price points above $5, and successful marketing, positioning it well against competitors like Dollar Tree and Dollar General.
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
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Valuation Analysis: Is FIVE Overvalued?
Given Five Below's positive net income, the PE ratio is the primary valuation metric. The trailing PE stands at 29.4x, while the forward PE is 23.7x, implying the market expects earnings growth of approximately 24% over the next year, which is consistent with the company's recent EPS growth trajectory. The PEG ratio of 0.71 suggests the stock is undervalued relative to its growth rate, indicating that the market may not be fully pricing in the company's earnings acceleration, making the valuation appear attractive on a growth-adjusted basis.
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 risks include a debt-to-equity ratio of 0.93, indicating moderate leverage, though the current ratio of 2.01 suggests strong liquidity. The company's operating margin improved to 12.0% in Q1 FY2026, but this is still below the 17.9% seen in Q4 FY2025, showing margin volatility. Revenue concentration in discretionary categories like Leisure and Fashion & Home exposes the company to shifts in consumer spending, and the lack of dividends means investors rely solely on capital appreciation. Cash flow is positive with FCF of $505M TTM, but the high growth requires significant reinvestment, which could pressure future cash flows if growth slows.