Comparing Five Below (FIVE) & The Competition

Five Below (NASDAQ: FIVE) is one of 12 public companies in the “Variety stores” industry, but how does it contrast to its competitors? We will compare Five Below to similar businesses based on the strength of its valuation, dividends, analyst recommendations, profitability, earnings, institutional ownership and risk.

Insider and Institutional Ownership

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76.5% of shares of all “Variety stores” companies are held by institutional investors. 3.2% of Five Below shares are held by insiders. Comparatively, 13.9% of shares of all “Variety stores” companies are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Valuation & Earnings

This table compares Five Below and its competitors gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Net Income Price/Earnings Ratio
Five Below $1.28 billion $102.45 million 41.78
Five Below Competitors $65.63 billion $1.74 billion 22.04

Five Below’s competitors have higher revenue and earnings than Five Below. Five Below is trading at a higher price-to-earnings ratio than its competitors, indicating that it is currently more expensive than other companies in its industry.

Risk and Volatility

Five Below has a beta of 0.58, suggesting that its stock price is 42% less volatile than the S&P 500. Comparatively, Five Below’s competitors have a beta of 0.89, suggesting that their average stock price is 11% less volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of current recommendations for Five Below and its competitors, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Five Below 0 7 9 0 2.56
Five Below Competitors 163 1266 1707 91 2.53

Five Below presently has a consensus price target of $63.27, suggesting a potential downside of 15.41%. As a group, “Variety stores” companies have a potential upside of 4.47%. Given Five Below’s competitors higher probable upside, analysts clearly believe Five Below has less favorable growth aspects than its competitors.

Profitability

This table compares Five Below and its competitors’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Five Below 8.02% 26.00% 16.40%
Five Below Competitors 3.76% 15.00% 6.64%

Summary

Five Below competitors beat Five Below on 7 of the 13 factors compared.

Five Below Company Profile

Five Below, Inc. operates as a specialty value retailer in the United States. It offers accessories, including novelty socks, sunglasses, jewelry, scarves, gloves, hair accessories, athletic tops and bottoms, and T-shirts, as well as beauty products comprising nail polish, lip gloss, fragrance, and branded cosmetics; and items used to complete and personalize living space, including glitter lamps, posters, frames, fleece blankets, plush items, pillows, candles, incense, lighting, novelty décor, and related items, as well as provides storage options for the customers room. The company also provides sport balls; team sports merchandise and fitness accessories, such as hand weights, jump ropes, and gym balls; games, including name brand board games, puzzles, collectibles, and toys; and pool, beach and outdoor toys, games, and accessories. In addition, it offers accessories, such as cases, chargers, headphones, and other related items for cell phones, tablet, audio, and computers; books, video games, and DVDs; craft activity kits; arts and crafts supplies that consist of crayons, markers, and stickers; and trend-right items for school comprising backpacks, fashion notebooks and journals, novelty pens and pencils, locker accessories, and everyday name brand items. Further, the company provides party goods, decorations, gag gifts, and greeting cards, as well as every day and special occasion merchandise products; assortment of classic and novelty candy bars, movie-size box candy, seasonal-related candy, and gum and snack food; chilled drinks through coolers; and seasonally-specific items used to celebrate and decorate for events. It primarily serves teen and pre-teen customers. As of February 3, 2018, it operated 625 stores in 32 states. The company was formerly known as Cheap Holdings, Inc. and changed its name to Five Below, Inc. in August 2002. Five Below, Inc. was founded in 2002 and is headquartered in Philadelphia, Pennsylvania.

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