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On Thursday, Telsey analysts raised the price target for Five Below (NASDAQ:FIVE) stock to $128 from $90 while maintaining a Market Perform rating. The decision follows the company’s robust first-quarter results and improved guidance for the second quarter of 2025. According to InvestingPro data, analyst targets for the stock range from $80 to $160, with 8 analysts recently revising their earnings estimates upward. The stock, currently trading near $121, appears slightly undervalued based on InvestingPro’s Fair Value analysis.
Five Below reported earnings per share (EPS) of $0.86 for the first quarter, surpassing Telsey’s estimate of $0.84 and the FactSet consensus of $0.83. The company also achieved a comparable sales increase of 7.1%, exceeding Telsey’s projection of 6.7% and the FactSet estimate of 5.8%. The company’s strong performance is reflected in its overall revenue growth of 8.91% over the last twelve months, with a market capitalization of $6.73 billion and a P/E ratio of 16.57.
The positive performance in the first quarter was driven by strong store traffic and conversion rates, with total transactions up by 6.2% and the average ticket increasing by 0.9%. The success was broad-based across various product categories and income groups, supported by ongoing investments in enhancing the in-store experience.
For the second quarter, Five Below provided an EPS guidance range of $0.50 to $0.62, compared to the FactSet estimate of $0.54. The company also anticipates comparable sales growth between 7.0% and 9.0%, higher than the FactSet projection of 5.4%.
Despite these positive trends, the outlook for the second half of 2025 remains cautious. The company expects challenges from increased tariff pressures, ongoing investments, and reduced leverage due to lower anticipated comparable sales growth. However, InvestingPro analysis indicates the company maintains good financial health, with liquid assets exceeding short-term obligations and a moderate debt level. For deeper insights into Five Below’s financial health and growth prospects, investors can access the comprehensive Pro Research Report, available exclusively on InvestingPro.
In other recent news, Five Below announced its first-quarter earnings for fiscal year 2025, reporting earnings per share (EPS) of $0.86, which significantly exceeded the forecasted $0.66. The company also reported revenue of $970.5 million, surpassing the expected $932.86 million, marking a 19.5% year-over-year increase. BofA Securities responded by raising the price target for Five Below’s stock from $78 to $93, while maintaining an Underperform rating. Analysts from KeyBanc maintained a Sector Weight rating, noting positive results from merchandising initiatives under the new CEO, Winnie Park, but expressed caution due to potential risks in the second half of the year.
Additionally, Five Below revised its fiscal 2025 guidance, now projecting sales between $4.3 billion and $4.4 billion with comparable sales growth of 3% to 5%. The company anticipates adjusted EPS to be between $4.25 and $4.72, reflecting confidence in its growth strategies despite some operating margin pressures. In a recent executive change, Chief Financial Officer Kristy Chipman announced her decision to step down for personal reasons, with Chief Operating Officer Ken Bull stepping in as interim CFO. Five Below’s management continues to focus on mitigating tariff impacts by diversifying vendors and increasing domestic sourcing, as the company navigates ongoing challenges in the retail environment.
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