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Five Below (FIVE) Outpaces Stock Market Gains: What You Should Know

Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore strong picks.

Five Below (FIVE) closed the most recent trading day at $101.40, moving +1.94% from the previous trading session. This change outpaced the S&P 500's 0.54% gain on the day. Elsewhere, the Dow gained 0.64%, while the tech-heavy Nasdaq added 0.95%.

Coming into today, shares of the discount retailer had lost 18.61% in the past month. In that same time, the Retail-Wholesale sector lost 5%, while the S&P 500 lost 4.97%.

FIVE will be looking to display strength as it nears its next earnings release, which is expected to be March 20, 2019. In that report, analysts expect FIVE to post earnings of $1.57 per share. This would mark year-over-year growth of 33.05%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $599.75 million, up 18.8% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $2.63 per share and revenue of $1.56 billion, which would represent changes of +46.93% and +21.66%, respectively, from the prior year.

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Investors might also notice recent changes to analyst estimates for FIVE. These recent revisions tend to reflect the evolving nature of short-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Within the past 30 days, our consensus EPS projection has moved 1.58% higher. FIVE is currently sporting a Zacks Rank of #3 (Hold).

Digging into valuation, FIVE currently has a Forward P/E ratio of 37.77. This valuation marks a premium compared to its industry's average Forward P/E of 10.3.

Also, we should mention that FIVE has a PEG ratio of 1.26. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. FIVE's industry had an average PEG ratio of 1.46 as of yesterday's close.

The Retail - Miscellaneous industry is part of the Retail-Wholesale sector. This group has a Zacks Industry Rank of 96, putting it in the top 37% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

You can find more information on all of these metrics, and much more, on Zacks.com.


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