Five Below Inc. (FIVE): Score-Card Analysis

This analysis attributes an Overall Score to a company by analyzing several aspects that I consider to be among the most important.

In summary, a company to have an overall score close to 100% must have the following characteristics:

  • Report high growth rates in the last 3 years (and in the last quarter) in terms of Revenue, Gross Profit, Operating Income and Net Income. Furthermore, it must operate with high and improving margins in recent years.
  • Analysts expect Earnings Per Share (EPS) and revenues to grow in the short term (in the next quarter) and in the medium to long term (in the next 5 years). Moreover, they expect the company to be undervalued at current prices and in the last quarter their EPS expectations must have been beaten with a consequent rise in share prices.
  • The stock price of the company must have outperformed the S&P 500 index and in the last 3 months the Hedge Funds and Insiders bought shares in the company.

The overall score ranges from -100% (if the characteristics listed above are all very negative) to +100% and it is unlikely that there will be a company with a +100% score because the requirements for achieving this score are very high, however a score higher than +40% can be considered good.

This analysis alone is not enough to decide whether or not to invest in a company because it does not provide indications on the timing of entry, but it is a good starting point.


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Five Below Inc. (FIVE)


Summary

  • Overall Score: +51.9%
  • Hedge Funds and Insiders are buying shares in the last 3 months
  • Revenues doubled in the last 3 years and analysts see EPS growth in the next 5 years (+20.4%)
  • Quarterly items on the rise, but margins worsening
  • YTD performance: +21.75% vs +17% of S&P 500 index

Full description

Five Below Inc. is a publicly-held chain of discount stores in the United States, which sells products costing up to $5. The company’s target demographics are children and teens, and typically operates outlets in strip malls.

The overall score of FIVE is +51,9%.

In the last 6 months, FIVE has overperformed the S&P500 index by 1,4% and analysts believe the company is undervalued by 14,4% .

In the last quarter, the company reported revenues of 417,4 million, up by 20,0% compared to the same quarter 12 months earlier. Revenue TTM (Trailing-12-Months) are equal to 1697,7 million, up by 104,1% in the last 3 years.

FIVE reported an operating income of 36 million in the last quarter, an improvement of 18,4% compared to the same quarter 12 months earlier, also reporting a reduction by -1,4% in the operating margin. Considering the sum of the last four quarters (TTM), FIVE reports an operating income of 192,5 Million , a growth of 107,2% compared to three years ago and an improvement of 1,5% in the operating margin.

FIVE reported a net income of 28,8 million in the last quarter, an improvement of 14,7% compared to the same quarter 12 months earlier, also reporting an improvement of -4,4% in the net margin. The TTM net income is 157,3 million , a growth of 172,6% compared to three years ago and the net margin has improved by 33,6% .

In the next quarter, analysts expect decrease in EPS (Earnings Per Share) of -29,2% and a growth in revenue of 23,2% . Furthermore, they expect an annual growth of FIVE EPS by 20,4% for the next 5 years.

Finally, in the last 3 months the Hedge Funds have increased their positions by 2.3k shares. The Insiders have purchased shares worth $51.2k .


Sources & additional info

*The comparison with the S&P 500 index is visible inside the graph
*Data updated to the last quarterly report available
*Data in Millions of Dollars
*Data from zacks.com, tipranks.com, reuters.com, finance.yahoo.com
*Company information from wikipedia.com


This analysis gives you a general idea of whether a company is good or not, but you may also be interested in finding potential entry points, so I am waiting for you here to know about the best chart patterns of today.


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DISCLAIMER: The information in this blog post represents my own analysis/opinions and does not contain a recommendation for any particular security or investment.