Five Below, Inc.'s (NASDAQ:FIVE) Popularity With Investors Is Clear
Five Below, Inc.'s (NASDAQ:FIVE) Popularity With Investors Is Clear
With a price-to-earnings (or "P/E") ratio of 27.1x Five Below, Inc. (NASDAQ:FIVE) may be sending very bearish signals at the moment, given that almost half of all companies in the United States have P/E ratios under 16x and even P/E's lower than 9x are not unusual. Although, it's not wise to just take the P/E at face value as there may be an explanation why it's so lofty.
Five Below certainly has been doing a good job lately as its earnings growth has been positive while most other companies have been seeing their earnings go backwards. The P/E is probably high because investors think the company will continue to navigate the broader market headwinds better than most. If not, then existing shareholders might be a little nervous about the viability of the share price.
Keen to find out how analysts think Five Below's future stacks up against the industry? In that case, our free report is a great place to start.What Are Growth Metrics Telling Us About The High P/E?
There's an inherent assumption that a company should far outperform the market for P/E ratios like Five Below's to be considered reasonable.
If we review the last year of earnings growth, the company posted a terrific increase of 15%. The latest three year period has also seen an excellent 147% overall rise in EPS, aided by its short-term performance. Therefore, it's fair to say the earnings growth recently has been superb for the company.
Shifting to the future, estimates from the analysts covering the company suggest earnings should grow by 17% each year over the next three years. Meanwhile, the rest of the market is forecast to only expand by 11% per annum, which is noticeably less attractive.
With this information, we can see why Five Below is trading at such a high P/E compared to the market. Apparently shareholders aren't keen to offload something that is potentially eyeing a more prosperous future.
The Bottom Line On Five Below's P/E
While the price-to-earnings ratio shouldn't be the defining factor in whether you buy a stock or not, it's quite a capable barometer of earnings expectations.
As we suspected, our examination of Five Below's analyst forecasts revealed that its superior earnings outlook is contributing to its high P/E. Right now shareholders are comfortable with the P/E as they are quite confident future earnings aren't under threat. Unless these conditions change, they will continue to provide strong support to the share price.
Many other vital risk factors can be found on the company's balance sheet. Our free balance sheet analysis for Five Below with six simple checks will allow you to discover any risks that could be an issue.
If you're unsure about the strength of Five Below's business, why not explore our interactive list of stocks with solid business fundamentals for some other companies you may have missed.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
Five Below, Inc.(納斯達克股票代碼:FIVE)的市盈率(或 “市盈率”)爲27.1倍,目前可能會發出非常看跌的信號,因爲美國幾乎有一半的公司的市盈率低於16倍,甚至市盈率低於9倍也並不罕見。但是,僅按面值計算市盈率是不明智的,因爲可以解釋爲什麼市盈率如此之高。
Five Below最近無疑表現不錯,因爲其收益增長是正的,而大多數其他公司的收益卻在倒退。市盈率可能很高,因爲投資者認爲該公司將繼續比大多數人更好地應對更廣泛的市場阻力。如果不是,那麼現有股東可能會對股價的可行性有些緊張。
想了解分析師如何看待Five Below的未來與該行業的對立嗎?在這種情況下,我們的免費報告是一個很好的起點。關於高市盈率,增長指標告訴我們什麼?
人們固有的假設是,如果像Five Below's這樣的市盈率才算合理,公司的表現應該遠遠超過市場。
如果我們回顧一下去年的收益增長,該公司公佈了15%的驚人增長。在短期表現的推動下,最近三年期間,每股收益總體增長了147%。因此,可以公平地說,該公司最近的收益增長非常好。
展望未來,報道該公司的分析師的估計表明,未來三年收益將每年增長17%。同時,預計其餘市場每年僅增長11%,這明顯降低了吸引力。
有了這些信息,我們可以明白爲什麼Five Below的市盈率與市場相比如此之高。顯然,股東們並不熱衷於轉移可能着眼於更繁榮未來的東西。
五下方市盈率的底線
雖然市盈率不應該是決定你是否買入股票的決定性因素,但它是衡量收益預期的有力晴雨表。
正如我們所懷疑的那樣,我們對Five Below分析師預測的審查顯示,其優異的盈利前景是其高市盈率的原因。目前,股東們對市盈率感到滿意,因爲他們非常有信心未來的收益不會受到威脅。除非這些條件發生變化,否則它們將繼續爲股價提供強有力的支撐。
在公司的資產負債表上可以找到許多其他重要的風險因素。我們對Five Below的免費資產負債表分析以及六張簡單的支票將使您發現任何可能存在問題的風險。
如果你不確定Five Below的業務實力,爲什麼不瀏覽我們的交互式股票清單,其中列出了一些你可能錯過的其他公司,這些股票具有穩健的業務基本面。
對這篇文章有反饋嗎?對內容感到擔憂?直接聯繫我們。 或者,給編輯團隊 (at) simplywallst.com 發送電子郵件。
Simply Wall St的這篇文章本質上是籠統的。我們僅使用公正的方法根據歷史數據和分析師的預測提供評論,我們的文章無意作爲財務建議。它不構成買入或賣出任何股票的建議,也沒有考慮到您的目標或財務狀況。我們的目標是爲您提供由基本數據驅動的長期重點分析。請注意,我們的分析可能不考慮最新的價格敏感型公司公告或定性材料。簡而言之,華爾街沒有持有任何上述股票的頭寸。
譯文內容由第三人軟體翻譯。
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