Bull of the Day: Five Below (FIVE)
Five Below FIVE is a specialty value chain retailer that offers a wide range of premium-quality, trendy merchandise typically priced at $5 or less. The company primarily targets teenage and pre-teen shoppers with its products, which include certain brands and licensed merchandise.
The stock sports the highly-coveted Zacks Rank #1 (Strong Buy), with bullish EPS revisions present across the board.
Image Source: Zacks Investment Research
Five Below Soars
Five Below shares have seen a great 2026 so far, up nearly 25% and widely outperforming relative to the S&P 500. Quarterly results have helped lead the surge, with the stock seeing a positive post-earnings reaction following its latest set of better-than-expected quarterly results.
Image Source: Zacks Investment Research
The retailer posted a double-beat relative to our consensus expectations in the latest quarterly release, with net sales increasing nearly 25% alongside a 24% jump in adjusted EPS. The YoY sales growth rate was the highest we’ve seen from the company in years, with its gross margin also seeing nice improvement over recent periods. The strong sales growth, paired with an improving profitability picture, helps explain the bullish EPS revisions, driving the strong share performance overall.
Please note that the chart below tracks margins on a trailing twelve-month basis.
Image Source: Zacks Investment Research
The valuation picture here isn’t overly rich relative to its history, with the current 28.3X forward 12-month earnings multiple a hair beneath the five-year median and nowhere near the steep five-year highs of 46.2X. Earnings are forecasted to grow 20% in its current fiscal year, with estimates for the upcoming year suggesting a further 13.5% improvement.
The stock has been a great example of the Zacks Rank in action, as shown below. Shares have held the #1 (Strong Buy) rating all year long.
Image Source: Zacks Investment Research
Bottom Line
Investors can implement a stellar strategy to find expected winners by taking advantage of the Zacks Rank – one of the most powerful market tools that provides a massive edge.
The top 5% of all stocks receive the highly coveted Zacks Rank #1 (Strong Buy). These stocks should outperform the market more than any other rank.
Five Below FIVE would be an excellent stock for investors to consider, as displayed by its Zack Rank #1 (Strong Buy).
Zacks' Research Chief Names "Stock Most Likely to Double"
Our team of experts has just released the 5 stocks with the greatest probability of gaining +100% or more in the coming months. Of those 5, Director of Research Sheraz Mian highlights the one stock set to climb highest.
This top pick is a little-known satellite-based communications firm. Space is projected to become a trillion dollar industry, and this company's customer base is growing fast. Analysts have forecasted a major revenue breakout in 2025. Of course, all our elite picks aren't winners but this one could far surpass earlier Zacks' Stocks Set to Double like Hims & Hers Health, which shot up +209%.
Free: See Our Top Stock And 4 Runners UpWant the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Five Below, Inc. (FIVE): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).
Source Zacks-com
