One-glance verdict
Within fair range
$271.66 our estimate vs market $234.14
Wall Street consensus: $310.95 (14.5% higher than our fair-value estimate)
14% below our estimate
Fundamentals snapshot
Five Below, Inc.
FIVE · NMS · Consumer Cyclical · Specialty Retail
Current price
$234.14
52-week range
$137.77 - $263.88
Market cap
$12.89B
Balance sheet
Watch
34.71x Strong cushion
Net debt $850.73M. Interest coverage shows how many times profit covers the interest bill.
What stands out
3 Rewards
3 Risks
3 rewards · 3 risks
- Reward Revenue grew 11.5% last year.
- Reward Returns 28.3% on equity, ahead of 33% of its peers.
- Risk Forward P/E (21.2x) is higher than trailing (21.0x) - earnings are expected to drop.
- Risk Operating margin compressed from 11.2% to 8.9% over 3 years.
What this company does
Five Below, Inc.
Five Below is a discount store that sells fun and trendy items like toys, candy, and phone accessories, primarily to teens and their families. The company makes its money by selling a huge volume of products for five dollars or less, a model that attracts budget-conscious shoppers and can perform well even when people are trying to save money.
How the company got here
Five Below was started in 2002 by friends Tom Vellios and David Schlessinger, who wanted to create a cool store for pre-teens and teenagers with products they could afford with their own allowance. The main idea was to sell trendy, fun items for $5 or less, which was a unique concept at the time. The company grew steadily and eventually went public in 2012, meaning it started selling shares of its stock to the public to raise money for more growth. This allowed them to expand from a regional retailer into a national chain with over 1,500 stores across the country.
What it actually does
Five Below is a specialty discount store that sells a wide variety of fun and trendy products, mostly aimed at kids, teens, and young adults. Think of it as a treasure hunt where you can find things like toys, candy, phone accessories, room decorations, and beauty products. The big draw is the price: most items in the store cost between $1 and $5. Recently, they've added a section called "Five Beyond" with items that can cost more than $5, like video games and electronics, to offer even more variety.
Retail Stores
The company makes virtually all of its money by selling products directly to customers in its physical stores. It operates as a single business segment, meaning it sees all its stores as one core operation rather than separate divisions. The stores are designed to be fun and high-energy, with distinct sections or "worlds" like Style, Tech, Candy, and Party to make shopping an exciting experience. While they do have a website for online shopping, the main focus is on the in-person experience, encouraging customers to come in and discover new things.
What management is betting on now
Management's main focus is on growing the company by opening many more stores across the United States, with a long-term goal of operating over 3,500 locations. They are also heavily invested in the "Five Beyond" concept, which introduces products at prices above the traditional $5 mark. This strategy aims to increase the average amount of money each customer spends, known as the average basket size, without losing the company's reputation for value. Another key priority is using technology to better manage their inventory (the products they have on hand), ensuring popular items are in stock and reducing waste from overstocking.
Price history
How the share price has moved
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Earnings history
Last 8 quarters — what happened
Click any quarter to read the call summary and what the numbers say.
FY2025 Q4
$-110.96M
FY2026 Q1
$311.40M
FY2026 Q2
$96.45M
FY2026 Q3
$48.28M
FY2026 Q4
$-133.16M
FY2027 Q2
$190.03M
FY2027 Q3
$142.26M
Revenue
$1.26B
Net income
$221.40M
Diluted EPS
3.99
Operating cash flow
$215.49M
Free cash flow
$142.26M
Fetching…
Sources
Revenue
$1.29B
Net income
$123.06M
Diluted EPS
2.21
Operating cash flow
$227.22M
Free cash flow
$190.03M
Fetching…
Sources
Revenue
$1.04B
Net income
$36.51M
Diluted EPS
0.66
Operating cash flow
$-80.12M
Free cash flow
$-133.16M
Fetching…
Sources
Revenue
$1.03B
Net income
$42.76M
Diluted EPS
0.77
Operating cash flow
$93.00M
Free cash flow
$48.28M
Fetching…
Sources
Revenue
$970.53M
Net income
$41.15M
Diluted EPS
0.75
Operating cash flow
$132.66M
Free cash flow
$96.45M
Fetching…
Sources
Revenue
$1.39B
Net income
$187.46M
Diluted EPS
3.39
Operating cash flow
$363.54M
Free cash flow
$311.40M
Fetching…
Sources
Revenue
$843.71M
Net income
$1.69M
Diluted EPS
0.03
Operating cash flow
$-30.58M
Free cash flow
$-110.96M
Fetching…
Sources
Is it cheap or expensive?
Fair value $271.66 vs current price $234.14
Wall Street consensus is the average analyst price target: $310.95 (14.5% higher than our fair-value estimate).
Our most-likely fair value is $271.66 a share — about 16.0% away from today's price of $234.14, so the stock currently looks fairly priced.
Is it drowning in debt?
Watch
Net debt $850.7M. Interest coverage 34.7x.
Net debt
$850.73M
Interest coverage
34.71x
Five Below, Inc.'s profit covers its interest bill about 34.7 times over. which is stronger than most peers shown here.
Watch
Worse cushion
Baseline
Better cushion
FIVE
BASELINE
Five Below, Inc.
Total debt $2.04B Interest coverage 34.71x This is the baseline the peer rows are being compared against.
Total debt $7.67B Interest coverage 19.33x -44% vs FIVE Carries about 1.8x less debt cushion than FIVE.
Total debt $15.77B Interest coverage 9.56x -72% vs FIVE Carries about 3.6x less debt cushion than FIVE.
Total debt $5.91B Interest coverage 11.89x -66% vs FIVE Carries about 2.9x less debt cushion than FIVE.
Total debt $725.65M Interest coverage 17.25x -50% vs FIVE Carries about 2.0x less debt cushion than FIVE.
Total debt $4.74B Interest coverage 71.36x +106% vs FIVE Carries about 2.1x more debt cushion than FIVE.
What you should know
The case for and against FIVE
3 Rewards
3 Risks
Rewards
-
Revenue grew 11.5% last year.
-
Returns 28.3% on equity, ahead of 33% of its peers.
-
Free cash flow was positive in 9/10 years.
Risks
-
Forward P/E (21.2x) is higher than trailing (21.0x) - earnings are expected to drop.
-
Operating margin compressed from 11.2% to 8.9% over 3 years.
-
Net debt grew 0.2% over 3 years.
The numbers
All the key metrics, grouped by purpose
Tap any ? icon to learn what it means.
Valuation
How expensive the stock looks
P/E (TTM)
20.98x
Forward P/E
21.16x
P/B
5.21x
P/S
2.43x
EV/EBITDA
16.75x
PEG ratio
0.98x
Profitability
How much profit each dollar creates
Gross margin
37.6%
Operating margin
8.9%
Net margin
11.7%
ROE
28.3%
ROA
7.8%
Health
Liquidity and balance-sheet strength
Debt / equity
0.82x
Current ratio
2.22x
Quick ratio
1.18x
Total debt
$2.04B
Total cash
$1.19B
Growth
How the business has been compounding
Revenue TTM
$5.31B
Revenue 5Y CAGR
13.7%
EPS TTM
11.16
EPS 5Y CAGR
11.3%
Cash flow
How much cash the business throws off
Operating CF TTM
$803.48M
Free CF TTM
$411.69M
FCF margin
7.7%
Dividend
Shareholder payout
Yield
—
Payout ratio
0.0%
Last ex-div date
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