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Five Below (FIVE) Stock Sinks As Market Gains: What You Should Know

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Five Below (FIVE - Free Report) closed the most recent trading day at $126.56, moving -0.07% from the previous trading session. The stock lagged the S&P 500's daily gain of 0.78%. At the same time, the Dow added 0.95%, and the tech-heavy Nasdaq gained 0.98%.

Prior to today's trading, shares of the discount retailer had gained 11.63% over the past month. This has outpaced the Retail-Wholesale sector's gain of 1.39% and the S&P 500's gain of 2.17% in that time.

FIVE will be looking to display strength as it nears its next earnings release, which is expected to be November 29, 2018. On that day, FIVE is projected to report earnings of $0.19 per share, which would represent year-over-year growth of 5.56%. Our most recent consensus estimate is calling for quarterly revenue of $303.76 million, up 18.11% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $2.57 per share and revenue of $1.54 billion. These totals would mark changes of +43.58% and +20.51%, respectively, from last year.

Investors should also note any recent changes to analyst estimates for FIVE. These revisions help to show the ever-changing nature of near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection has moved 3.03% higher. FIVE currently has a Zacks Rank of #2 (Buy).

Digging into valuation, FIVE currently has a Forward P/E ratio of 49.27. For comparison, its industry has an average Forward P/E of 14.88, which means FIVE is trading at a premium to the group.

It is also worth noting that FIVE currently has a PEG ratio of 1.64. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. FIVE's industry had an average PEG ratio of 1.64 as of yesterday's close.

The Retail - Miscellaneous industry is part of the Retail-Wholesale sector. This group has a Zacks Industry Rank of 191, putting it in the bottom 25% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.


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