The Case for and Against Five Below, Inc. (FIVE)

Five Below, Inc. (NASDAQ:FIVE) is an interesting player in the Services space, with a focus on Specialty Retail, Other. The stock has been active on the tape, currently trading at $40.11, up from yesterday’s close by -1.50%. Given the stock’s recent action, it seemed like a good time to take a closer look at the company’s recent data.

Fundamental Analysis

No amount of research is complete without a bird’s eye view of the financial data. Five Below, Inc. (FIVE) currently trades with a market capitalization of $2.20B. That value represents a market adjusting for revenues that have been growing by 17.60% on a quarterly year/year basis as of the company’s last quarterly report.

The balance sheet health of any company plays a key role in its ability to meet its obligations and maintain the faith of its investment base. For FIVE, the company currently has $63.45M of cash on the books, which is offset by $0.00 current liabilities. You can get a sense of how sustainable that is by a levered free cash flow of $42.43M over the past twelve months. Generally speaking, earnings are expected to fall in coming quarters. Analysts are forecasting earnings of 0.89 on a per share basis this quarter. Perhaps, that suggests something about why 118.80% of the outstanding share supply is held by institutional investors.

Technical Analysis

As most professionals know, technical analysis can offer critical insights into what smart money and insiders think about a stock’s prospects going forward. Looking at the stock’s movement on the chart, Five Below, Inc. recorded a 52-week high of 52.70. It is now trading 11.98 off that level. The stock is trading 40.61 its 50-day moving average by -0.11. The stock carved out a 52-week low down at 31.97.

In recent action, Five Below, Inc. (FIVE) has made a move of -3.65% over the past month, which has come on Strong relative transaction volume. Over the trailing year, the stock is outperforming the S&P 500 by 0.030000000000001, and it’s gotten there by action that has been less volatile on a day-to-day basis than most other stocks on the exchange. In terms of the mechanics underlying that movement, traders will want to note that the stock is trading on a float of 53.49M with 18.02% sitting short, betting on future declines. That suggests something of the likelihood of a short squeeze in shares of FIVE.

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