FIVE
Five Below, Inc.
$243.08
Stable Earnings Power
80%
P/Adj-EPS × Normalized Multiple
Strong
·
Conviction
Overvalued
Trading 56.8% above fair value
You pay
$243.08
Bear
$135.66
Fair
$155.04
Bull
$174.42
Bear
$135.66
-44.2%
$6.46 × 21x P/E
Fair
$155.04
-36.2%
$6.46 × 24x P/E
Bull
$174.42
-28.2%
$6.46 × 27x P/E
Adjust Assumptions
24.0x
6.46$
Key Value Driver
Normalized P/E multiple (24x base case)
Implied Market Multiple
37.6x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (50 analysts)
$268.15
Divergence from AlphaVal
42%
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 $268.15 (from 50 analysts). Our estimate is 42% 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