Is Five Below, Inc. overvalued or undervalued?

As of 18 August 2025, the valuation grade for Five Below, Inc. has moved from expensive to very expensive, indicating a significant shift in its perceived market value. The company is currently overvalued, as evidenced by its P/E ratio of 27, which is notably higher than the peer average of 30.56 for similar companies, and an EV to EBITDA ratio of 12.99, which also suggests a premium valuation compared to its peers. Additionally, the Price to Book Value stands at 3.77, further reinforcing the notion of overvaluation.
In comparison to its peers, Wayfair, Inc. has a P/E ratio of -47.76, while Kohl's Corp. is considered very attractive with a P/E of 28.09. Five Below's recent stock performance has outpaced the S&P 500, with a year-to-date return of 48.09% compared to the S&P 500's 12.22%, but this strong performance does not mitigate its overvaluation status.