One-glance verdict
Within fair range
$273.82 our estimate vs market $216.70
Wall Street consensus: $260.48 (-4.9% lower than our fair-value estimate)
21% below our estimate
Fundamentals snapshot
Five Below, Inc.
FIVE · NMS · Consumer Cyclical · Specialty Retail
Current price
$216.70
52-week range
$131.40 - $251.63
Market cap
$11.98B
Balance sheet
Watch
34.71x Strong cushion
Net debt $885.45M. Interest coverage shows how many times profit covers the interest bill.
What stands out
3 Rewards
1 Risk
3 rewards · 1 risks
- Reward Revenue grew 6.6% last year.
- Reward Returns 21.1% on equity, ahead of 50% of its peers.
- Reward Free cash flow was positive in 9/10 years.
- Risk Net debt grew 0.2% over 3 years.
What this company does
Five Below, Inc.
Five Below is a discount store that sells fun items like toys, candy, and phone accessories, with most things priced under five dollars. It makes money by selling a large quantity of these low-cost goods, primarily to teens and families looking for a good deal. This is important because its low prices can attract customers even when many people are trying to cut back on their spending.
How the company got here
Five Below was started in 2002 by founders Tom Vellios and David Schlessinger with a simple idea: create a fun shopping place for teens and pre-teens with everything priced at $5 or less. The company grew from its roots in Pennsylvania, expanding across the United States and becoming a publicly traded company in 2012, which gave it more money to grow. A major change happened when they introduced "Five Beyond," a section in the store with items priced above $5, which helped attract more customers. By early 2024, the company had grown to operate over 1,500 stores in more than 40 states.
What it actually does
Five Below is a specialty discount store that sells a wide variety of trendy and fun products aimed mostly at a younger audience. Think of it as a treasure hunt where you can find things like candy, tech gadgets, room decorations, party supplies, toys, and beauty products. The main draw is that most items are very affordable, originally priced at $5 or less, creating an environment that encourages impulse buys (buying something on the spot without much planning). The selection of products changes often to keep up with the latest trends, which encourages shoppers to visit again and again to see what's new.
In-Store Retail Sales
The main way Five Below makes money is by selling products directly to customers in its physical stores. This is the company's only significant business segment, as it does not operate franchises (stores owned by individuals) or have other major sources of revenue (money a company receives from its business activities). The company focuses on a high-volume, low-price model, meaning it sells a very large number of items at a low price point to generate its income. While it has a website for online shopping, the vast majority of its business happens in its brick-and-mortar locations across the United States.
What management is betting on now
The company's main strategy for the future is to continue opening a large number of new stores across the country, with a long-term goal of having more than 3,500 locations. They are also focused on expanding the "Five Beyond" concept, which offers items at prices higher than the traditional $5 cap, to encourage customers to spend more during each visit. Management is also working on improving the in-store experience by making sure stores are well-stocked, clean, and have the trendiest products available. This focus on physical stores and a fun, treasure-hunt shopping experience is what they believe will keep customers coming back.
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 Q3
$-32.35M
FY2025 Q4
$-110.96M
FY2026 Q1
$311.40M
FY2026 Q2
$96.45M
FY2026 Q3
$48.28M
FY2026 Q4
$-133.16M
FY2027 Q2
$190.03M
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
Revenue
$830.07M
Net income
$33.00M
Diluted EPS
0.60
Operating cash flow
$71.25M
Free cash flow
$-32.35M
Fetching…
Sources
Is it cheap or expensive?
Fair value $273.82 vs current price $216.70
Wall Street consensus is the average analyst price target: $260.48 (-4.9% lower than our fair-value estimate).
Our most-likely fair value is $273.82 a share — about 26.4% away from today's price of $216.70, so the stock currently looks fairly priced.
Is it drowning in debt?
Watch
Net debt $885.4M. Interest coverage 34.7x.
Net debt
$885.45M
Interest coverage
34.71x
Five Below, Inc.'s profit covers its interest bill about 34.7 times over. which is stronger than every peer shown here.
Watch
Worse cushion
Baseline
Better cushion
FIVE
BASELINE
Five Below, Inc.
Total debt $2.00B Interest coverage 34.71x This is the baseline the peer rows are being compared against.
Total debt $7.59B Interest coverage 19.33x -44% vs FIVE Carries about 1.8x less debt cushion than FIVE.
Total debt $15.80B Interest coverage 9.56x -72% vs FIVE Carries about 3.6x less debt cushion than FIVE.
Total debt $710.30M Interest coverage 17.25x -50% vs FIVE Carries about 2.0x less debt cushion than FIVE.
Total debt $5.87B Interest coverage 11.89x -66% vs FIVE Carries about 2.9x less debt cushion than FIVE.
Total debt $1.70B Interest coverage 7.32x -79% vs FIVE Carries about 4.7x less debt cushion than FIVE.
What you should know
The case for and against FIVE
3 Rewards
1 Risk
Rewards
-
Revenue grew 6.6% last year.
-
Returns 21.1% on equity, ahead of 50% of its peers.
-
Free cash flow was positive in 9/10 years.
Risks
-
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)
27.33x
Forward P/E
22.19x
P/B
5.18x
P/S
2.36x
EV/EBITDA
17.02x
PEG ratio
0.98x
Profitability
How much profit each dollar creates
Gross margin
36.8%
Operating margin
12.0%
Net margin
8.7%
ROE
21.1%
ROA
7.4%
Health
Liquidity and balance-sheet strength
Debt / equity
0.86x
Current ratio
2.10x
Quick ratio
1.13x
Total debt
$2.00B
Total cash
$1.11B
Growth
How the business has been compounding
Revenue TTM
$5.08B
Revenue 5Y CAGR
13.7%
EPS TTM
7.93
EPS 5Y CAGR
11.3%
Cash flow
How much cash the business throws off
Operating CF TTM
$680.99M
Free CF TTM
$411.69M
FCF margin
8.1%
Dividend
Shareholder payout
Yield
—
Payout ratio
0.0%
Last ex-div date
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