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When InvestingPro’s Fair Value models identified Five Below (NASDAQ:FIVE) as significantly undervalued in November 2024, the discount retailer’s stock was trading at $86.28. Today, that analysis has proven remarkably prescient, with shares reaching $151.99 – delivering a 64% return for investors who followed the signal. This success story demonstrates the power of combining fundamental analysis with advanced valuation methodologies to identify market opportunities. Investors seeking similar opportunities can explore current undervalued stocks on the Most undervalued list.
Five Below, a rapidly growing specialty discount retailer targeting teens and tweens, has demonstrated remarkable resilience and growth since the analysis. When InvestingPro’s models flagged the stock, the company was generating annual revenue of $3.8 billion with EBITDA of $504.5 million. The fair value analysis indicated a 49% upside potential, based on the company’s strong fundamentals and growth trajectory.
The subsequent performance has validated this assessment. Five Below’s revenue has grown to $4.2 billion, while EBITDA has expanded to $532.4 million. The company’s successful store expansion strategy, with 55 new locations recently opened, and strong comparable store sales growth of 12.4% in Q2 2025 have driven this impressive performance.
Wall Street has taken notice, with multiple analysts raising their price targets. Recent upgrades include Wolfe Analysis setting a $187 target and Craig-Hallum raising their projection to $180, citing strong Q2 performance. The company’s effective merchandising strategies and ability to capitalize on pop culture trends have particularly impressed analysts.
InvestingPro’s Fair Value analysis combines multiple valuation methodologies, including discounted cash flow models, comparable company analyses, and analyst consensus targets. This comprehensive approach helps identify stocks trading significantly below their intrinsic value, providing investors with actionable insights backed by robust analytical frameworks.
The success of this fair value call exemplifies the advantage of having access to sophisticated investment tools and analysis. Learn more about InvestingPro to discover currently undervalued opportunities and gain access to exclusive financial health scores, real-time fair value updates, and professional-grade investment tools that can help identify the next potential market winner.