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Five Below (FIVE) Dips More Than Broader Markets: What You Should Know

Zacks Equity Research
Comfort Systems (FIX) doesn't possess the right combination of the two key ingredients for a likely earnings beat in its upcoming report. Get prepared with the key expectations.

Five Below (FIVE) closed at $97.33 in the latest trading session, marking a -1.72% move from the prior day. This move lagged the S&P 500's daily loss of 1.54%. Elsewhere, the Dow lost 1.49%, while the tech-heavy Nasdaq lost 2.17%.

Coming into today, shares of the discount retailer had lost 4.67% in the past month. In that same time, the Retail-Wholesale sector lost 6.13%, while the S&P 500 lost 6.77%.

FIVE will be looking to display strength as it nears its next earnings release, which is expected to be March 20, 2019. On that day, FIVE is projected to report earnings of $1.57 per share, which would represent year-over-year growth of 33.05%. Our most recent consensus estimate is calling for quarterly revenue of $599.75 million, up 18.8% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $2.63 per share and revenue of $1.56 billion, which would represent changes of +46.93% and +21.66%, respectively, from the prior year.

It is also important to note the recent changes to analyst estimates for FIVE. These revisions help to show the ever-changing nature of near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection has moved 1.48% higher. FIVE is currently sporting a Zacks Rank of #3 (Hold).

Looking at its valuation, FIVE is holding a Forward P/E ratio of 37.61. This valuation marks a premium compared to its industry's average Forward P/E of 9.68.

Investors should also note that FIVE has a PEG ratio of 1.25 right now. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. FIVE's industry had an average PEG ratio of 1.44 as of yesterday's close.

The Retail - Miscellaneous industry is part of the Retail-Wholesale sector. This group has a Zacks Industry Rank of 78, putting it in the top 30% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

You can find more information on all of these metrics, and much more, on Zacks.com.

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