Five Below (NASDAQ:FIVE) Shares Gap Down on Analyst Downgrade

Key Points

• Five Below shares gapped down after Morgan Stanley cut its price target from $245 to $235 while keeping an Equal Weight rating. The stock opened sharply lower and was last trading around $194, down about 13.7%.
• The company posted a strong Q1 earnings beat, reporting $2.22 EPS on $1.29 billion in revenue versus expectations of $1.77 EPS and $1.23 billion in sales. Comparable sales rose 22.7% and net sales jumped 32.5% year over year.
• Management raised full-year FY2026 guidance to $5.40 billion-$5.48 billion in sales and $8.65-$9.05 in adjusted EPS, signaling confidence in continued momentum. Despite the pullback, Wall Street remains mixed-to-bullish overall, with a consensus Moderate Buy rating and a $249.85 target price.

Shares of Five Below, Inc. (NASDAQ:FIVE - Get Free Report) gapped down before the market opened on Thursday after Morgan Stanley lowered their price target on the stock from $245.00 to $235.00. The stock had previously closed at $222.89, but opened at $197.47. Morgan Stanley currently has an equal weight rating on the stock. Five Below shares last traded at $194.0360, with a volume of 993,190 shares traded.

FIVE has been the subject of several other research reports. Mizuho upped their price objective on shares of Five Below from $185.00 to $205.00 and gave the company a "neutral" rating in a research note on Tuesday, March 17th. Wall Street Zen raised Five Below from a "hold" rating to a "buy" rating in a report on Saturday, May 16th. Bank of America upped their target price on Five Below from $260.00 to $305.00 and gave the company a "buy" rating in a research report on Thursday, March 19th. UBS Group raised their price target on Five Below from $255.00 to $285.00 and gave the stock a "buy" rating in a research note on Thursday, March 19th. Finally, Telsey Advisory Group boosted their price objective on Five Below from $240.00 to $260.00 and gave the company an "outperform" rating in a research note on Thursday, March 19th. One analyst has rated the stock with a Strong Buy rating, fourteen have given a Buy rating and nine have assigned a Hold rating to the stock. According to data from MarketBeat, the stock currently has a consensus rating of "Moderate Buy" and a consensus target price of $249.85.

Insiders Place Their Bets

In other news, Director Ronald Sargent sold 10,000 shares of the business's stock in a transaction dated Monday, March 23rd. The shares were sold at an average price of $231.28, for a total transaction of $2,312,800.00. Following the transaction, the director directly owned 83,674 shares in the company, valued at $19,352,122.72. The trade was a 10.68% decrease in their ownership of the stock. The sale was disclosed in a legal filing with the SEC, which is available through this link. Also, COO Kenneth R. Bull sold 10,000 shares of the stock in a transaction dated Friday, March 20th. The stock was sold at an average price of $234.14, for a total transaction of $2,341,400.00. Following the transaction, the chief operating officer directly owned 92,531 shares of the company's stock, valued at $21,665,208.34. This represents a 9.75% decrease in their ownership of the stock. Additional details regarding this sale are available in the official SEC disclosure. 0.96% of the stock is currently owned by corporate insiders.

Five Below News Roundup

Here are the key news stories impacting Five Below this week:

• Positive Sentiment: Five Below delivered a big Q1 beat, with earnings of $2.22 per share versus $1.77 expected and revenue of $1.29 billion versus $1.23 billion expected. Comparable sales rose 22.7% and net sales jumped 32.5% year over year, showing strong demand and execution. Article Title
• Positive Sentiment: Management raised full-year FY2026 guidance, now calling for $5.40 billion to $5.48 billion in sales and $8.65 to $9.05 in adjusted EPS, both well above prior expectations. That signals confidence that momentum can continue. Article Title
• Positive Sentiment: Bank of America reaffirmed a Buy rating and maintained a $305 price target, suggesting Wall Street still sees meaningful upside from current levels. Article Title
• Neutral Sentiment: Morgan Stanley cut its price target to $235 from $245 while keeping an Equal Weight rating. That is still above the stock’s recent level, but it reflects a more cautious stance after the earnings run-up. Article Title
• Negative Sentiment: Some commentary questioned whether Five Below’s recent “Squishy Dumplings”/trend-driven merchandising success can be repeated, raising concerns that the company’s hot sales growth may not be fully sustainable. Article Title

Hedge Funds Weigh In On Five Below

Large investors have recently modified their holdings of the business. NewEdge Advisors LLC grew its holdings in Five Below by 143.0% during the first quarter. NewEdge Advisors LLC now owns 1,096 shares of the specialty retailer's stock worth $82,000 after acquiring an additional 645 shares during the period. United Services Automobile Association acquired a new stake in Five Below in the first quarter valued at $268,000. Empowered Funds LLC purchased a new stake in shares of Five Below during the 1st quarter worth $1,416,000. UBS AM A Distinct Business Unit of UBS Asset Management Americas LLC boosted its position in shares of Five Below by 13.3% during the 1st quarter. UBS AM A Distinct Business Unit of UBS Asset Management Americas LLC now owns 184,518 shares of the specialty retailer's stock worth $13,825,000 after purchasing an additional 21,625 shares in the last quarter. Finally, Focus Partners Wealth grew its stake in shares of Five Below by 63.8% during the 1st quarter. Focus Partners Wealth now owns 3,858 shares of the specialty retailer's stock worth $289,000 after purchasing an additional 1,503 shares during the period.

Five Below Trading Down 13.7%

The stock's 50 day moving average price is $225.65 and its two-hundred day moving average price is $205.05. The firm has a market capitalization of $10.64 billion, a price-to-earnings ratio of 29.92, a PEG ratio of 1.63 and a beta of 0.97.

Five Below (NASDAQ:FIVE - Get Free Report) last announced its quarterly earnings data on Wednesday, June 3rd. The specialty retailer reported $2.22 EPS for the quarter, beating the consensus estimate of $1.77 by $0.45. The firm had revenue of $1.29 billion during the quarter, compared to analysts' expectations of $1.23 billion. Five Below had a net margin of 7.53% and a return on equity of 18.70%. The business's revenue for the quarter was up 32.5% compared to the same quarter last year. During the same quarter last year, the business earned $0.86 earnings per share. Five Below has set its FY 2026 guidance at 8.650-9.050 EPS and its Q2 2026 guidance at 1.170-1.290 EPS. On average, sell-side analysts forecast that Five Below, Inc. will post 8.26 earnings per share for the current fiscal year.

Five Below Company Profile

Five Below, Inc NASDAQ: FIVE is an American specialty discount retailer offering a broad assortment of merchandise priced primarily at $5 or below. Since its founding in 2002 by David Schlessinger and Tom Vellios, the company has pursued a value-focused retail model targeting tweens, teens and beyond, with stores designed to deliver trend-driven products at an accessible price point. Headquartered in Philadelphia, Pennsylvania, Five Below has grown into a national chain operating in dozens of U.S.

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