FIVE
Five Below, Inc.
$222.72
Stable Earnings Power
80%
P/Adj-EPS × Normalized Multiple
Strong
·
Conviction
Overvalued
Trading 43.7% above fair value
You pay
$222.72
Bear
$135.66
Fair
$155.04
Bull
$174.42
Bear
$135.66
-39.1%
$6.46 × 21x P/E
Fair
$155.04
-30.4%
$6.46 × 24x P/E
Bull
$174.42
-21.7%
$6.46 × 27x P/E
Adjust Assumptions
24.0x
6.46$
Key Value Driver
Normalized P/E multiple (24x base case)
Implied Market Multiple
34.5x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (50 analysts)
$298.44
Divergence from AlphaVal
48%
Summary
Applying a 24x P/E to adjusted EPS of $6.46, the base-case value is $155.04 per share.
Warnings
Wall Street's average price target is $298.44 (from 50 analysts). Our estimate is 48% below 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