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Five Below (FIVE) Stock Sinks As Market Gains: What You Should Know

Zacks Equity Research

Five Below (FIVE) closed the most recent trading day at $146.43, moving -0.73% from the previous trading session. This change lagged the S&P 500's daily gain of 0.1%. Meanwhile, the Dow gained 0.15%, and the Nasdaq, a tech-heavy index, lost 0.66%.

Prior to today's trading, shares of the discount retailer had gained 22.17% over the past month. This has outpaced the Retail-Wholesale sector's gain of 3.75% and the S&P 500's gain of 3.95% in that time.

Wall Street will be looking for positivity from FIVE as it approaches its next earnings report date. The company is expected to report EPS of $1.57, up 348.57% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $365.52 million, up 23.35% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $3.08 per share and revenue of $1.89 billion. These totals would mark changes of +15.79% and +21.26%, respectively, from last year.

Investors should also note any recent changes to analyst estimates for FIVE. These revisions typically reflect the latest short-term business trends, which can change frequently. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 0.03% higher. FIVE is currently a Zacks Rank #3 (Hold).

Digging into valuation, FIVE currently has a Forward P/E ratio of 47.95. For comparison, its industry has an average Forward P/E of 11.56, which means FIVE is trading at a premium to the group.

It is also worth noting that FIVE currently has a PEG ratio of 1.65. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. Retail - Miscellaneous stocks are, on average, holding a PEG ratio of 1.9 based on yesterday's closing prices.

The Retail - Miscellaneous industry is part of the Retail-Wholesale sector. This group has a Zacks Industry Rank of 80, putting it in the top 32% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.


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