Five Below Stock: Near Fully-Priced Heading Into Q3 Earnings

Nov. 29, 2021 12:42 PM ETFive Below, Inc. (FIVE)1 Comment
Taylor Dart profile picture
Taylor Dart
26.66K Followers

Summary

  • Five Below is one of the best-performing retail names thus far in Q4 and is getting ready to report its Q3 earnings results this week.
  • The company has guided for up to $565 million in Q3 revenue and a mid-single-digit comp, which is up against a difficult 12.8% comp sales figure in the year-ago period.
  • While this is impressive growth given the difficult year-over-year comps, and unit growth continues to impress, Five Below already looks fairly valued heading into its report.
  • With limited margin of safety at current levels as Five Below trades at ~37x FY2022 earnings estimates, I believe there are much more attractive bets out there in the market currently.

Five Below Retail Store. Five Below is a chain that sells products that cost up to 5 dollars.

jetcityimage/iStock Editorial via Getty Images

It's been a solid year for the Retail Sector (XRT) thus far with a 50% plus year-to-date return, and Five Below (NASDAQ:FIVE) is one of the best-performing names thus far in Q4. The

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Taylor Dart profile picture
26.66K Followers
"A bull market is when you check your stocks every day to see how much they went up. A bear market is when you don't bother to look anymore."- John Hammerslough - Disclosure: I am not a financial advisor. All articles are my opinion - they are not suggestions to buy or sell any securities. Perform your own due diligence and consult a financial professional before trading or investing.

Disclosure: I/we have a beneficial short position in the shares of QQQ either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Additional disclosure: Disclaimer: Taylor Dart is not a Registered Investment Advisor or Financial Planner. This writing is for informational purposes only. It does not constitute an offer to sell, a solicitation to buy, or a recommendation regarding any securities transaction. The information contained in this writing should not be construed as financial or investment advice on any subject matter. Taylor Dart expressly disclaims all liability in respect to actions taken based on any or all of the information on this writing.

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