Five Below Stock Fair Value – Five Below Q3 Earnings: What to Expect?
December 3, 2023
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Five Below ($NASDAQ:FIVE) is a rapidly growing discount retailer that has been gaining traction with both investors and consumers due to its unique offerings and competitive prices. As Five Below is set to release their Q3 earnings, investors and analysts alike are left wondering what to expect from the report. Analysts are expecting to see positive growth in the company’s sales and revenues during this quarter. This is due to the increased demand for their products as shoppers look to save money on essential goods. The company has also been investing heavily in their e-commerce platform which is expected to further drive sales and revenues.
Additionally, the company has been able to leverage their unique discount model to keep up with the current market trends and maintain their competitive advantage. Investors are also expecting to see Five Below’s profits increase this quarter as cost cutting measures have been implemented over the past few months. The company has managed to reduce their operating expenses by streamlining processes and reducing their overhead costs. Additionally, the company’s pricing strategy has enabled them to compete on price without sacrificing margins. Overall, analysts and investors are expecting positive results from Five Below’s Q3 earnings report. The company’s focus on price and e-commerce investments are expected to drive sales and revenues while cost cutting measures should ensure that profits remain stable. With these positive factors in place, Five Below should be well positioned for another successful quarter.
Earnings
As the third quarter earning of FIVE BELOW approaches, investors are eager to know what to expect. According to the latest earning report of FY2024 Q2 as of July 31 2021, FIVE BELOW earned 646.55M USD in total revenue and 64.84M USD in net income. These figures have seen a 3.3% decrease in total revenue and a 56.8% increase in net income compared to the previous year. In the past three years, FIVE BELOW’s total revenue has grown from 646.55M USD to 758.98M USD.
In light of these results, investors are expecting FIVE BELOW to perform better than what is indicated by its past earnings this time around. Investors are hoping for a strong third quarter that further drives growth and provides a positive outlook for the company’s future prospects.
About the Company
Income Snapshot
Below shows the total revenue, net income and net margin for Five Below. More…
| Total Revenues | Net Income | Net Margin |
| 3.34k | 270.23 | 8.1% |
Cash Flow Snapshot
Below shows the cash from operations, investing and financing for Five Below. More…
| Operations | Investing | Financing |
| 451.8 | -237.56 | -95.53 |
Balance Sheet Snapshot
Below shows the total assets, liabilities and book value per share for Five Below. More…
| Total Assets | Total Liabilities | Book Value Per Share |
| 3.66k | 2.28k | 24.74 |
Key Ratios Snapshot
Some of the financial key ratios for Five Below are shown below. More…
| 3Y Rev Growth | 3Y Operating Profit Growth | Operating Margin |
| 23.1% | 38.4% | 10.3% |
| FCF Margin | ROE | ROA |
| 4.2% | 15.2% | 5.9% |
Market Price
On Friday, Five Below‘s stock opened at $190.2 and closed at $191.0, indicating market expectations for the retailer’s upcoming Q3 earnings announcement. Investors will be watching closely to see how Five Below’s performance has been this quarter. Analysts are looking for an increase in revenue due to the company’s growth in online sales and stores, as well as the strong execution of its strategic initiatives. This could potentially be offset by rising costs related to the pandemic, such as additional sanitization and labor costs needed to keep customers safe.
Investors should also keep an eye out for any updates on Five Below’s plans to open new stores in the coming months. All of these factors will come into play when assessing Five Below’s Q3 earnings and could have a significant impact on its stock price. Live Quote…
Analysis – Five Below Stock Fair Value
At GoodWhale, we conducted an analysis of the wellbeing of FIVE BELOW. Our proprietary Valuation Line indicated that the fair value of their share is approximately $204.0. However, FIVE BELOW stock is currently being traded at $191.0; this is a fair price, but it is undervalued by 6.4%. We believe that investors should take this opportunity to buy FIVE BELOW at a reasonable price. More…
Peers
Despite the intense competition, Five Below Inc continues to thrive and has managed to carve out a niche for itself in the market.
– Ross Stores Inc ($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
Investors will be watching closely for key performance indicators such as same-store sales, gross margins, and net income. Analysts predict Five Below’s sales and profits will be up from the previous quarter due to their strategic shift to e-commerce sales. Five Below’s success in the past quarter was driven by strong demand for their products from the home-schooling and budget-savvy consumer base.
Additionally, analysts believe that the company has been able to capitalize on the shift to digital shopping caused by the pandemic. Going forward, investors should watch for any further updates regarding Five Below’s e-commerce operations that might affect its bottom line.
