Despite its growth, FIVE BELOW (NASDAQ:FIVE) remains within the realm of affordability.

Take a closer look at FIVE BELOW (NASDAQ:FIVE), an affordable growth stock uncovered by our stock screener. FIVE boasts strong growth prospects and excels in financial health indicators, all while maintaining a reasonable valuation. Let's break it down further.

A Closer Look at Growth for FIVE

ChartMill employs its own Growth Rating system for all stocks. This score, ranging from 0 to 10, is derived by evaluating different growth factors, such as EPS and revenue growth, taking into account both past performance and future projections. FIVE has earned a 7 for growth:

• FIVE shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 15.56% yearly.
• FIVE shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 14.32%.
• The Revenue has been growing by 17.94% on average over the past years. This is quite good.
• FIVE is expected to show a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 25.19% yearly.
• Based on estimates for the next years, FIVE will show a quite strong growth in Revenue. The Revenue will grow by 16.34% on average per year.
• The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.

How We Gauge Valuation for FIVE

An integral part of ChartMill's stock analysis is the Valuation Rating, which spans from 0 to 10. This rating evaluates diverse valuation factors, including price to earnings and cash flows, while considering the stock's profitability and growth. FIVE has received a 5 out of 10:

• Compared to the rest of the industry, the Price/Earnings ratio of FIVE indicates a somewhat cheap valuation: FIVE is cheaper than 73.55% of the companies listed in the same industry.
• When comparing the Price/Earnings ratio of FIVE to the average of the S&P500 Index (28.64), we can say FIVE is valued rather cheaply.
• Based on the Price/Forward Earnings ratio, FIVE is valued a bit cheaper than the industry average as 68.59% of the companies are valued more expensively.
• FIVE's Price/Forward Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 21.42.
• Based on the Enterprise Value to EBITDA ratio, FIVE is valued a bit cheaper than the industry average as 66.12% of the companies are valued more expensively.
• FIVE has a very decent profitability rating, which may justify a higher PE ratio.

Understanding FIVE's Health

ChartMill assigns a Health Rating to every stock. This score ranges from 0 to 10 and evaluates the different health aspects like liquidity and solvency, both absolutely, but also relative to the industry peers. FIVE scores a 7 out of 10:

• FIVE has a better Altman-Z score (2.72) than 63.64% of its industry peers.
• There is no outstanding debt for FIVE. This means it has a Debt/Equity and Debt/FCF ratio of 0 and it is amongst the best of the sector and industry.

A Closer Look at Profitability for FIVE

ChartMill assigns a proprietary Profitability Rating to each stock. The score is computed by evaluating various profitability ratios and margins and ranges from 0 to 10. FIVE was assigned a score of 6 for profitability:

• With a decent Return On Assets value of 6.41%, FIVE is doing good in the industry, outperforming 72.73% of the companies in the same industry.
• FIVE has a Return On Equity of 16.61%. This is in the better half of the industry: FIVE outperforms 73.55% of its industry peers.
• FIVE has a better Return On Invested Capital (7.85%) than 65.29% of its industry peers.
• FIVE has a better Profit Margin (7.02%) than 81.82% of its industry peers.
• FIVE has a Operating Margin of 9.04%. This is amongst the best in the industry. FIVE outperforms 80.99% of its industry peers.

Our Affordable Growth screener lists more Affordable Growth stocks and is updated daily.

Check the latest full fundamental report of FIVE for a complete fundamental analysis.

Keep in mind

This article should in no way be interpreted as advice. The article is based on the observed metrics at the time of writing, but you should always make your own analysis and trade or invest at your own responsibility.