Five Below Q2 Earnings to More Than Double, Revenue to Jump Over 50%

The Philadelphia, Pennsylvania-based discount retailer Five Below is expected to report its second-quarter earnings of $1.11 per share, which represents year-over-year growth of over 45% from $0.50 per share seen in the same period a year ago.

The popular discount store retailer that sells products that cost up to $5 would post revenue growth of more than 50% to $656 million. Five Below will report 2Q FY21 earnings after market close on Wednesday, Sept 1. It is important to note that the company beat consensus expectations for EPS four times in a row.

Five Below shares have gained over 23% so far this year. However, the stock fell about 4% to $216.04 on Friday.

Analyst Comments

“Five Below’s (FIVE) profile among pure B&M retailers is nearly unmatched (20% top/bottom-line growth, no debt). It’s driven by a differentiated, defensible model focused on extreme value merchandise across diverse categories. FIVE is exiting the COVID-19 pandemic as a fundamentally stronger and more relevant business, with best-in-class growth characteristics, various company-specific initiatives in place, and solid liquidity,” noted Simeon Gutman, equity analyst at Morgan Stanley.

“However, valuation is near peak the stock seems fairly valued, in our view, with a balanced risk/reward skew. White space store growth (>50% unit runway remaining) and multi-year track record of ~20% square footage growth with >90% productivity.”

Five Below Stock Price Forecast

Fourteen analysts who offered stock ratings for Five Below in the last three months forecast the average price in 12 months of $236.33 with a high forecast of $300.00 and a low forecast of $185.00.

The average price target represents a 9.30% change from the last price of $216.22. From those 14 analysts, eight rated “Buy”, six rated “Hold” while none rated “Sell”, according to Tipranks.

Morgan Stanley gave the base target price of $230 with a high of $300 under a bull scenario and $140 under the worst-case scenario. The firm gave an “Equal-weight” rating on the discount retailer’s stock.

Several other analysts have also updated their stock outlook. UBS raised the target price to $230 from $210. Deutsche Bank lifted the price target to $271 from $254. Berenberg upped the target price to $185 from $181.