60%+ returns in 2025: Here’s how AI-powered stock investing has changed the game
When InvestingPro’s Fair Value models identified Five Below (NASDAQ:FIVE) as significantly undervalued in November 2024, the discount store retailer was trading at $86.28. Less than a year later, the stock has delivered a remarkable 64% return, validating the model’s ability to identify mispriced opportunities in the market. For investors seeking similar opportunities, the Most undervalued list continues to highlight potential value plays across different sectors.
Five Below operates a rapidly expanding chain of discount stores targeting teens and pre-teens with trendy merchandise priced primarily below $5. When InvestingPro’s analysis flagged the stock, the company was demonstrating solid fundamentals with annual revenue of $3.82 billion and EBITDA of $504.5 million, despite experiencing volatile trading in the preceding months.
The Fair Value model’s thesis was supported by several key factors, including the company’s aggressive store expansion strategy, effective merchandising approach, and strong financial health score of 2.09. These fundamentals have since strengthened, with revenue growing to $4.23 billion and EBITDA reaching $532.4 million in the most recent quarter.
The stock’s performance has been particularly impressive since the fair value signal, with a notable surge of 53.6% in May 2025 alone. This growth has been accompanied by multiple positive developments, including strong quarterly earnings beats and a series of analyst upgrades. Recent price targets from firms like Wolfe Analysis ($187) and Craig-Hallum ($180) suggest continued optimism about the company’s trajectory.
InvestingPro’s Fair Value analysis combines multiple valuation methodologies, including intrinsic value calculations, margin of safety considerations, and future cash flow projections. This comprehensive approach helps investors identify opportunities where market prices significantly deviate from fundamental value, as demonstrated in this Five Below case study.
The success of this fair value call exemplifies the power of data-driven investment analysis. For investors looking to uncover similar opportunities, InvestingPro offers access to fair value analyses across thousands of stocks, along with real-time financial metrics and professional-grade research tools to enhance investment decision-making.