Five Below, Inc. Fundamental Analysis (NASDAQ: FIVE)
Five Below, Inc. (NASDAQ: FIVE) shows strong financial fundamentals with a PE ratio of 21.87, profit margin of 11.65%, and ROE of 27.73%. The company generates $5.3B in annual revenue with strong year-over-year growth of 22.90%.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 85.5/100 based on profitability, valuation, growth, and balance sheet metrics. The B+ grade reflects solid fundamentals with room for improvement in valuation or growth.
Fundamental Health Score
We analyze FIVE's fundamental strength across five key dimensions:
Efficiency Score
ExcellentFIVE demonstrates superior asset utilization.
Valuation Score
ExcellentFIVE trades at attractive valuation levels.
Growth Score
ExcellentFIVE delivers strong and consistent growth momentum.
Financial Health Score
ExcellentFIVE maintains a strong and stable balance sheet.
Profitability Score
ModerateFIVE maintains healthy but balanced margins.
Key Financial Metrics
Is FIVE Expensive or Cheap?
P/E Ratio
FIVE trades at 21.87 times earnings. This indicates a fair valuation.
PEG Ratio
When adjusting for growth, FIVE's PEG of 0.17 indicates potential undervaluation.
Price to Book
The market values Five Below, Inc. at 5.47 times its book value. This suggests the stock is fully valued or overvalued on an asset basis.
EV/EBITDA
Enterprise value stands at 12.50 times EBITDA. This signals the market has high growth expectations.
How Well Does FIVE Make Money?
Net Profit Margin
For every $100 in sales, Five Below, Inc. keeps $11.65 as profit after all expenses.
Operating Margin
Core operations generate 14.75 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $27.73 in profit for every $100 of shareholder equity.
ROA
Five Below, Inc. generates $11.73 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
Five Below, Inc. produces operating cash flow of $805.88M, showing steady but balanced cash generation.
Free Cash Flow
Five Below, Inc. generates strong free cash flow of $601.04M, providing ample flexibility for dividends, buybacks, or growth.
FCF Per Share
Each share generates $10.87 in free cash annually.
FCF Yield
FIVE converts 4.44% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
21.87
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
0.17
vs 25 benchmark
P/B Ratio
Price to book value ratio
5.47
vs 25 benchmark
P/S Ratio
Price to sales ratio
2.56
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
0.82
vs 25 benchmark
Current Ratio
Current assets to current liabilities
2.22
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
0.28
vs 25 benchmark
ROA
Return on assets percentage
0.12
vs 25 benchmark
ROCE
Return on capital employed
0.18
vs 25 benchmark
How FIVE Stacks Against Its Sector Peers
| Metric | FIVE Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 21.87 | 24.30 | Neutral |
| ROE | 27.73% | 998.00% | Weak |
| Net Margin | 11.65% | -2995.00% (disorted) | Strong |
| Debt/Equity | 0.82 | 0.59 | Weak (High Leverage) |
| Current Ratio | 2.22 | 2.31 | Strong Liquidity |
| ROA | 11.73% | 338.00% | Weak |
FIVE outperforms its industry in 2 out of 6 key metrics, particularly excelling in Net Margin, but lagging in ROE.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews Five Below, Inc.'s 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
145.61%
Industry Style: Cyclical, Growth, Discretionary
High GrowthEPS CAGR
194.08%
Industry Style: Cyclical, Growth, Discretionary
High GrowthFCF CAGR
62.09%
Industry Style: Cyclical, Growth, Discretionary
High Growth