Five Below Intrinsic Value – FIVE BELOW Announces FY2024 Q3 Earnings Results for October 31, 2023

🌥️Earnings Overview

On November 29, 2023, FIVE BELOW ($NASDAQ:FIVE) released its earnings results for the third quarter of fiscal year 2024, ending on October 31, 2023. The company reported total revenue of USD 736.4 million, a 14.2% increase from the same quarter in the prior year; however, net income was down 9.7% to USD 14.6 million.

Price History

The stock opened at $190.7 and closed the trading day at $188.1, reflecting a 1.8% decrease from the previous closing price of $191.5. The drop in stock price was not unexpected as analysts had predicted that the earnings results would be mixed due to the challenging economic conditions. The company also announced that it had invested in several new initiatives, such as expanding its online presence and introducing new products that were expected to boost sales and improve margins in the long run. As the company looks towards the future, it is confident that its investments will pay off and help them remain competitive in the retail space.

Overall, while the short-term outlook for FIVE BELOW is uncertain, it remains optimistic about its long-term prospects due to its investments in new initiatives and cost-saving measures. Investors should keep an eye on these developments over the coming quarters as they could potentially have a positive impact on the stock price in the near future. Live Quote…

About the Company

Income Snapshot

Below shows the total revenue, net income and net margin for Five Below. More…

Cash Flow Snapshot

Below shows the cash from operations, investing and financing for Five Below. More…

Balance Sheet Snapshot

Below shows the total assets, liabilities and book value per share for Five Below. More…

Key Ratios Snapshot

Some of the financial key ratios for Five Below are shown below. More…

Analysis – Five Below Intrinsic Value

At GoodWhale, we have conducted an analysis of FIVE BELOW‘s financials. Our proprietary Valuation Line shows an intrinsic value of $209.8 per share for FIVE BELOW stock. At the current price of $188.1, this indicates that the stock is undervalued by 10.3%. We believe that this is a fair price and could present investors with an attractive opportunity in the near future. More…

Peers

Despite the intense competition, Five Below Inc continues to thrive and has managed to carve out a niche for itself in the market.

– Ross Stores Inc ($NASDAQ:ROST)

Ross Stores Inc is a chain of American off-price department stores. It operates under two brands, Ross and dd’s DISCOUNTS. As of 2022, the company had a market cap of 40.44B, making it one of the largest retailers in the United States. In addition, Ross Stores Inc also has a strong Return on Equity (ROE) of 29.12%, which indicates that the company is making effective use of its shareholders’ funds. The company’s success is attributed to its effective management strategies and cost containment practices. The company has been able to maintain its market share and profitability despite the presence of competitors.

– O’Reilly Automotive Inc ($NASDAQ:ORLY)

O’Reilly Automotive Inc is an American retail company specializing in the distribution of automotive aftermarket parts, tools, supplies, equipment and accessories. As of 2022, O’Reilly Automotive Inc has a market capitalization of 50.97 billion US dollars, making it one of the largest publicly traded auto parts retailers in the US. The company’s Return on Equity (ROE) stands at -159.26%, indicating that it is not generating enough returns for its shareholders. Despite this, the company continues to focus on expanding its operations in order to increase its market share and profitability.

– Kirkland’s Inc ($NASDAQ:KIRK)

Kirkland’s Inc is a specialty retailer of home décor, furniture, and gifts. It has a market cap of 46.43M as of 2022, which is relatively low compared to other companies in the home décor industry. Despite this, the company has still managed to maintain a negative Return on Equity (-43.0%) which indicates that the company has failed to generate a return on the investments of its shareholders. This could be due to their lack of resources, or because their current strategy may not be optimal for creating shareholder value.

Summary

FIVE BELOW reported strong revenue growth of 14.2% in Q3 FY2024, ending October 31 2023, reaching USD 736.4 million. Despite the impressive revenue growth, reported net income was down 9.7% year over year at USD 14.6 million. Investors should monitor the company’s financial performance and strategic initiatives as it works to improve profitability and drive long-term growth.

In particular, investors should watch for improved margins and increased capital expenditure to more efficiently leverage the company’s burgeoning revenue. Lastly, investors should consider the potential impact of the current macroeconomic environment on the company’s operations and financial performance.