FIVE
Five Below, Inc.
$219.50
Platform & Compounding FCF
85%
Two-stage FCF DCF
Mild
·
Conviction
Overvalued
Trading 9.4% above fair value
You pay
$219.50
Bear
$126.53
Fair
$200.61
Bull
$280.32
Bear
$126.53
-42.4%
8% stage 1 growth, 11% discount
Fair
$200.61
-8.6%
14% stage 1 growth, 11% discount
Bull
$280.32
+27.7%
18% stage 1 growth, 11% discount
Key Value Driver
FCF growth rate (14% base case)
Terminal Value % of EV
42%
Implied Market Multiple
32.2x
Summary
Our base-case estimate uses a two-stage discounted cash flow model based on free cash flow. We then blend that result with the average analyst price target of $219.47 from 50 analysts, using a 35% weight on analyst consensus. That produces an estimated intrinsic value of $200.61 per share.
Key Risks
- P/E alone misleads — earnings depressed by growth investment
- Cyclical or commodity businesses may be misclassified as platforms
- Terminal value dominance suggests sensitivity to long-run assumptions