Stock market today: S&P 500 drops for fifth day as focus shifts to Powell’s speech
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. Nine months later, investors who acted on this signal have seen their investment grow by 64%, with the stock reaching $141.88. This remarkable success story demonstrates the power of combining fundamental analysis with advanced valuation methodologies to identify market opportunities, similar to those currently featured in our Most undervalued list.
Five Below, a specialty discount retailer offering products primarily priced at $5 or less, showed strong fundamentals when InvestingPro’s models flagged it as undervalued. With annual revenue of $3.8 billion and healthy EBITDA of $504.5 million, the company’s solid financial foundation suggested significant upside potential. Despite experiencing volatile trading in the six months prior, with monthly returns ranging from -33% to +17%, InvestingPro’s analysis indicated a 49.49% upside opportunity.
The subsequent performance has validated this analysis. Since November, Five Below has demonstrated impressive operational execution, growing revenue to $4.03 billion while expanding EBITDA to $515.3 million. The company’s comparable sales growth of 6.7% and strong gross margins have attracted increasing attention from Wall Street analysts. Notable upgrades include UBS raising their price target to $160 and Jefferies to $155, reflecting growing confidence in the company’s business model and execution.
Recent developments have further supported InvestingPro’s initial thesis. The company’s Q1 2025 earnings beat forecasts, store expansion plans remain on track, and operational efficiency improvements are driving margin expansion. The stock’s remarkable performance peaked in May 2025 with a 53.6% monthly gain, pushing the total return well beyond initial projections.
InvestingPro’s Fair Value analysis combines multiple valuation methodologies, including discounted cash flow models, comparable company analyses, and market range analysis, to identify stocks trading significantly above or below their intrinsic value. This comprehensive approach helps investors make more informed decisions by providing a clear picture of a stock’s true worth.
For investors seeking similar opportunities, InvestingPro continues to identify mispriced stocks across markets. The platform’s proven track record with Five Below demonstrates the value of combining fundamental analysis with advanced valuation tools. Learn more about InvestingPro to access current Fair Value analyses and discover potentially undervalued opportunities before the market recognizes their true worth.