Five Below Inc. Common Stock (FIVE)

FairStock Score: 47/100 — MIXED

Key Financials

Strengths

• Generates $347 million in annual free cash flow (2.6% yield on market cap)
• Strong Piotroski F-Score of 8/9 indicating robust financial health across profitability, leverage, and efficiency metrics
• Solid return on equity of 17.9% above cost of capital
• Altman Z-Score of 4.3 confirms minimal bankruptcy risk and strong solvency
• Revenue growth of 24.3% demonstrates strong top-line momentum

Concerns

• Trades significantly above Graham Number ($76) with negative 217% margin of safety—limited downside protection

AI Analysis

Five Below Inc. Common Stock is a mid-cap consumer cyclical company valued at $13.3 billion. The business generates $4.8 billion in annual revenue with a 5.0% net margin and $347 million in free cash flow. From a quality standpoint, Five shows near-perfect Piotroski F-Score of 8/9 indicating exceptional financial health and healthy Altman Z-Score of 4.3. On valuation, the stock is trading at a premium 36.9x earnings, with trades far above its Graham Number ($76) with no margin of safety. Growth dynamics show revenue growing at 24.3% and profit growth of 27.1%. Our composite FairStock Score of 47/100 reflects mixed fundamentals overall. Investors should weigh the business quality against the current price and their own margin of safety requirements.

Bull Case

Five's 24% revenue growth trajectory could accelerate as it captures additional market share in the consumer cyclical sector. With $347 million in annual free cash flow (2.6% yield), management has ample capital for buybacks, dividends, or accretive acquisitions.

Bear Case

At 37x earnings, any growth disappointment triggers rapid multiple compression—a 20% earnings miss plus multiple contraction to 20x implies 40%+ downside. Regulatory changes, input cost inflation, or demand normalization represent underappreciated risks that could materially impact forward estimates.

Data from SEC filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer