FIVE
Five Below, Inc.
$197.71
Stable Earnings Power
80%
P/Adj-EPS × Normalized Multiple
Moderate
·
Conviction
Undervalued
Trading 34.1% below fair value
You pay
$197.71
Bear
$246.91
Fair
$299.82
Bull
$352.73
Bear
$246.91
+24.9%
$6.46 × 42x P/E
Fair
$299.82
+51.6%
$6.46 × 51x P/E
Bull
$352.73
+78.4%
$6.46 × 60x P/E
Key Value Driver
Normalized P/E multiple (51x base case)
Implied Market Multiple
30.6x
Summary
Our base-case estimate uses a valuation based on adjusted earnings per share and a normalized price-to-earnings multiple. We then blend that result with the average analyst price target of $244.78 from 50 analysts, using a 35% weight on analyst consensus. That produces an estimated intrinsic value of $299.82 per share.
Warnings
Wall Street's average price target is $244.78 (from 50 analysts). Our estimate is 35% above the consensus -- consider that gap carefully.
Key Risks
- Growth DCF inappropriate — terminal value assumptions dominate
- EV/EBITDA misleading for regulated businesses where capex is mandated
- Regulatory risk is a fat tail not visible in normal multiples