Five Below, Inc. (FIVE) Stock Valuation — PE Analysis
Discount Stores · NASDAQ
Current Price
$198.49
PE Ratio (TTM)
24.9x
Intrinsic Value
$307.31
+35.4% margin of safety
COMPETITIVE MOAT
↑Targeted Demographic Appeal
Five Below effectively captures the value-seeking, trend-conscious youth demographic. This focus creates strong brand loyalty among its core customers.
↑Unique Product Curation
The company excels at sourcing and presenting a constantly refreshing assortment of trendy, impulse-buy items. This dynamic merchandising keeps the shopping experience novel and exciting.
↑Value Proposition Strength
Offering a wide range of products at consistently low price points creates a compelling value proposition. This attracts a broad customer base, especially in uncertain economic times.
INVESTMENT RISKS
↓Dependence on Discretionary Spending
The company's sales are highly sensitive to consumer discretionary spending. Economic downturns or shifts in consumer priorities could significantly impact revenue.
↓Inventory Management Challenges
Managing a high volume of diverse, trend-driven inventory presents risks. Obsolescence or overstocking can lead to margin erosion and markdowns.
↓Intense Retail Competition
The discount retail sector is highly competitive. Five Below faces pressure from numerous players vying for the same value-conscious consumer.
Base case
FIVE base case PE valuation
A base case PE valuation for FIVE estimates a fair value of about $307.31 per share, against a current price of $198.49. The model assumes 16.0% annual earnings growth, a 25x target PE multiple, and a 10% discount rate.
Intrinsic Value
$307.31
Margin of safety
+35.4%
Expected annual return
+9.1%
Base case assumptions: 16.0% annual earnings growth, 25x target PE, 10% discount rate, 5 year projection. Data as of 2026-06-12.
This base case uses default assumptions and is not financial advice. The fair value changes significantly when the target PE or earnings growth rate changes. Open the calculator to set your own assumptions and see the full sensitivity range.
Customize the FIVE PE valuation
Adjust the target PE, earnings growth, and discount rate to see how the fair value and margin of safety for Five Below, Inc. respond.
Open PE Calculator for FIVECompany Overview
Five Below, Inc. operates as a prominent specialty discount retailer primarily serving the United States market. The company's diverse inventory spans a wide array of personal accessories, from fashionable novelty socks, sunglasses, and jewelry to scarves, gloves, hair accessories, and athletic apparel like tops, bottoms, and t-shirts. Shoppers can also find a comprehensive selection of beauty products, including nail polish, lip gloss, fragrances, and various branded cosmetics. For home and personal spaces, Five Below provides an assortment of items such as lamps, posters, picture frames, cozy fleece blankets, plush toys, pillows, candles, incense, and diverse lighting and novelty décor. This section also includes accent furniture and practical storage solutions. Athletic and recreational interests are covered with sports balls, team merchandise, and fitness essentials like hand weights, jump ropes, and gym balls. The store also boasts a variety of games, from classic board games and puzzles to collectibles and remote-control toys, alongside seasonal outdoor and water-based fun items for pools and beaches. Furthermore, the company caters to technology enthusiasts with accessories for cell phones, tablets, audio devices, and computers, offering cases, chargers, headphones, and related gadgets. Media products, including books, video games, and DVDs, are also available. Creativity is encouraged through a selection of craft activity kits and art supplies like crayons, markers, and stickers. Students can find school essentials such as backpacks, trendy notebooks and journals, novelty pens and pencils, and locker embellishments. For celebrations, Five Below offers party goods, decorations, gag gifts, and greeting cards, encompassing both everyday and special occasion merchandise. A sweet tooth is satisfied with a range of classic and novelty candy bars, movie-sized boxes, seasonal treats, gum, and snack foods, complemented by chilled beverages. Additionally, the retailer stocks a rotating selection of seasonally-themed items for holiday decorating and events. Initially founded as Cheap Holdings, Inc., the company officially adopted the name Five Below, Inc. in August 2002, the same year it was incorporated. Its corporate headquarters are situated in Philadelphia, Pennsylvania.
Financial Metrics — FIVE PE Stock Valuation Data
PE Ratio (TTM)
24.9x
PEG Ratio
0.37
Earnings Yield
4.02%
ROE (TTM)
21.1%
Revenue/Share (TTM)
$91.91
Debt/Equity
0.86x
Frequently Asked Questions
What is the PE ratio of FIVE?
The trailing twelve-month PE ratio of FIVE reflects how much investors pay per dollar of Five Below, Inc.'s earnings. This metric is most useful when compared to Discount Stores peers and the company's own historical range.
Is FIVE overvalued based on PE ratio?
FIVE's PE of 24.9x combined with a PEG ratio of 0.37 provides a growth-adjusted perspective. A PEG below 1.0 suggests FIVE may be undervalued relative to its earnings growth rate. Keep in mind that PE-based valuation works best for profitable, mature companies — for high-growth or cyclical Discount Stores, a DCF analysis may be more appropriate.
How do I value FIVE stock using PE ratio?
To value Five Below, Inc. using PE: (1) Compare the current PE (24.9x) against the Discount Stores median to assess relative pricing, (2) check the PEG ratio (0.37) to adjust for growth expectations, (3) review the 5-year PE range to identify where the stock sits historically, and (4) estimate fair value by multiplying a target PE by forward EPS estimates. This relative approach complements DCF's absolute valuation.
What is the PEG ratio of FIVE?
FIVE's PEG ratio is 0.37, calculated by dividing the PE ratio (24.9x) by the expected earnings growth rate. A PEG below 1.0 is traditionally considered a sign of undervaluation — the market may not be fully pricing in the growth potential. Note that PEG accuracy depends on the reliability of growth estimates.
Should I use PE ratio or DCF for FIVE stock valuation?
PE ratio gives a quick relative read — how FIVE is priced versus Discount Stores peers. DCF provides an absolute value based on projected free cash flows. For FIVE, with a strong ROE of 21.1%, both methods are worth using — PE for a market-relative check, DCF to stress-test whether fundamentals justify the price. Each method has blind spots: PE ignores capital structure and cash flow quality, while DCF is sensitive to growth and discount rate assumptions.
Learn More
- See FIVE DCF Valuation → — Intrinsic value via Discounted Cash Flow analysis
- PE Methodology — Step-by-step guide to PE ratio stock valuation
- DCF Methodology — Guide to discounted cash flow analysis
- PE Ratio — Understanding the price-to-earnings ratio
- Intrinsic Value — How to evaluate stock fair value
Related PE Valuations
All Consumer Defensive valuationsP/E and DCF value FIVE with different methods and assumptions, so the two conclusions can differ. Compare the DCF intrinsic value.
Price as of 2026-06-12. Financial data from Financial Modeling Prep (trailing twelve months) · Valuation methodology by Charlie Wang.
This is an estimate, not investment advice.