NEW YORK (TheStreet) -- Shares of Five Below (FIVE) are rallying 3.11% to $41.12 after analysts at RBC Capital Markets initiated coverage of the company with an "outperform" rating and a price target of $48.
The specialty value retailer "has one of the best long-term growth profiles in retail, with the potential to expand their store footprint by nearly 500%+ over time," analysts said.
Its stores are highly productive and its low price point model also protects against e-commerce cannibalization.
Additionally, FIVE compares favorably on a PEG basis to other retail concepts like Chipotle Mexican Grill (CMG), Tractor Supply (TSCO) and Ulta (ULTA), but has nearly four times the unit expansion potential of these other retailers, according to the analyst note.
Separately, TheStreet Ratings team rates FIVE BELOW INC as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:
"We rate FIVE BELOW INC (FIVE) a HOLD. The primary factors that have impacted our rating are mixed, some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its robust revenue growth, impressive record of earnings per share growth and compelling growth in net income. However, as a counter to these strengths, we also find weaknesses including premium valuation, poor profit margins and relatively poor performance when compared with the S&P 500 during the past year."