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On Thursday, Craig-Hallum analysts increased the price target for Five Below stock (NASDAQ: NASDAQ:FIVE) to $152 from $133 while maintaining a Buy rating. According to InvestingPro data, this target aligns with the broader analyst consensus, as Eight analysts have recently revised their earnings estimates upward. The decision follows the company’s strong first-quarter results, highlighted by a roughly 7% increase in same-store sales driven by increased customer traffic.
Five Below’s focus on offering extreme-value price points under $5 has proven successful, with new trends in collectibles and beauty contributing to its performance. The company, currently valued at $6.7 billion, has maintained strong financials with a healthy gross profit margin of 34.9% and revenue growth of 8.9% over the last twelve months. The company’s efforts to mitigate tariff impacts have reduced its exposure to China, with further diversification expected in fiscal year 2026. Despite a projected 150 basis point margin drag in fiscal year 2025 due to tariffs, the company remains optimistic about its growth trajectory.
The company has exceeded expectations in new unit productivity, and management indicated that unit growth is likely to accelerate in the coming years. InvestingPro analysis shows the company maintains a strong financial health score, with liquid assets exceeding short-term obligations and moderate debt levels. While tariff impacts pose a short-term challenge, the analysts estimate that in a tariff-free environment, Five Below could generate over $6 in earnings per share this year, with potential for further upside if same-store sales remain high. Discover more insights about Five Below and access comprehensive analysis of 1,400+ stocks with an InvestingPro subscription.
Craig-Hallum views Five Below’s growth story as fully repaired and anticipates the stock’s multiple to return to its typical level. With a P/E ratio of 16.5x and projected revenue growth of 13% for the next fiscal year, the company shows promising fundamentals. The analysts reiterated their Buy rating alongside the revised price target, reflecting confidence in the company’s future prospects.
In other recent news, Five Below reported strong first-quarter earnings, with earnings per share (EPS) of $0.86, surpassing both Telsey’s estimate of $0.84 and the FactSet consensus of $0.83. The company also achieved a 7.1% increase in comparable sales, exceeding expectations. Following these results, several analyst firms adjusted their price targets for Five Below. Jefferies raised its target to $155, maintaining a Buy rating, while Citi increased its target to $135 with a Neutral rating. Telsey adjusted its target to $128, also with a Market Perform rating. Mizuho (NYSE:MFG) raised its target to $115, maintaining a Neutral rating as well. In addition to financial updates, Five Below announced a new partnership with Uber (NYSE:UBER) Eats, allowing customers to order from over 1,500 Five Below locations through the Uber Eats app. This partnership expands Uber Eats’ offerings beyond food delivery to include retail products.
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