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Bull of the Day: Five Below (FIVE)

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Let me tell you something, this is exactly the kind of stock that gets interesting when the market starts getting selective. This company has built a business model around trend-right merchandise, impulse purchases, and a price point that keeps shoppers coming back. Whether it’s seasonal décor, tech accessories, candy, toys, or home goods, the company has become a destination for budget-conscious consumers without feeling “cheap.” That matters. Consumers still want the dopamine hit of buying something fun, and this company delivers it at a price point that feels easy.

Today’s Bull of the Day is Five Below ((FIVE - Free Report) ), the discount retailer that continues to hit the sweet spot between value and discretionary spending. In an environment where consumers are still hunting for deals but not completely shutting their wallets, this is the kind of name that can quietly outperform.

From a market perspective, this is where the story gets compelling. Retail has been a stock-picker’s game, and names with strong traffic trends and expanding margins tend to separate from the pack. Five Below’s store growth runway remains one of the best in specialty retail, with plenty of white space left across the U.S. That expansion engine gives investors both earnings growth and a long-term multiple support story.

That’s a big part of the reason why 8 analysts have upped the ante for current year estimates and 5 have done so for next year. The bullish moves have pushed up our Zacks Consensus Estimate for the current year from $6.12 to $7.84 while next year’s number is up from $6.72 to $8.93. That means current year EPS growth is now forecast to come in at 17.54% while next year’s set to expand another 13.8%. That’s the reason why this is a Zacks Rank #1 (Strong Buy) right now.

From a market perspective, this story really gets compelling. Retail has been a stock-picker’s game, and names with strong traffic trends and expanding margins tend to separate from the pack. Five Below’s store growth runway remains one of the best in specialty retail, with plenty of white space left across the U.S. That expansion engine gives investors both earnings growth and a long-term multiple support story.


 

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