Five Below is Tuesday's IBD Stock Of The Day, as the retail discount chain hovers around a buy point amid a 14% rally since reporting first-quarter earnings last month. FIVE stock edged lower in stock market trade Tuesday.
The Philadelphia-based variety retail-chain saw revenue growth rev up to 20% in its May 3-ended fiscal Q1, up from 4% the prior quarter. The company on June 4 forecast Q2 earnings, with results expected in August, to range from 50 cents to 62 cents per share adjusted on $975 million to $995 million in sales. The retailer expects to open 30 net new stores during the quarter and to generate 7% to 9% comparable sales growth.
New CEO Winnie Park's "efforts to revamp the company's merchandising and marketing strategies" are building confidence that strong comparable-store sales growth could be sustainable, William Blair analyst Phillip Blee wrote after a better-than-expected Q1 report on June 4.
Still, Blee kept a market perform rating for Five Below based on tariff risk, noting that China still contributes 50% of the company's product, though that's down from 60% at the end of Q1.
On Monday, JPMorgan analysts raised their price target on the stock to 154, up from 105, representing 11% upside compared to current trading levels. That is based on the firm's fieldwork, suggesting upside to its Q2 same-store-sales estimate of up 10.5% following price increases taken by Five Below across categories.
Overall, Five Below has an average price target of 133.37 with an overweight rating, according to FactSet.
Investors can keep tabs on the IBD Leaderboard watchlist, the IBD 50 list of top growth stocks and IBD SwingTrader along with the IBD Sector Leaders list.
Five Below Stock Performance
The stock edged down less than 1% to 139.70 during Tuesday's stock market trade. Last week, Five Below shares shot up 8.1% to 139.07, clearing a 137.30 buy point from an early-stage flat base, according to MarketSurge chart analysis.
That flat base formed after shares more than doubled over two months.
The stock is now up 164% from an April 4 low and has advanced 30% for the 2025 stock market. Meanwhile, more broadly, retail discount chains have also rallied in this year's stock market. The seven stocks in the IBD-tracked Retail-Discount & Variety industry have collectively jumped around 32% this year.
That's good for fourth-best industry of the 197 groups tracked by IBD.
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The group includes Dollar General, Dollar Tree and BJ's Wholesale among others.
Five Below has a 21-day average true range of 3.04%. The ATR metric, available on IBD's MarketSurge charting tool, gauges the characteristic breadth of a stock's behavior. Stocks that tend to make large jumps or dives in daily stock market action, the kind that can trigger sell rules and shake investors out of a stock, have a high ATR. Stocks that tend to make more incremental moves have lower ATRs.
The stock has a 97 Composite Rating out of a best-possible 99. Shares also have a 96 Relative Strength Rating and an 89 EPS Rating.
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