One of the best retailer growth stocks is getting ready to step up with its latest financial results, and at least one Wall Street pro wants to get in ahead of what's likely to be a blowout performance.

Evercore ISI analyst Michael Montani initiated coverage of Five Below (FIVE -3.66%) on Wednesday, tagging it with a bullish "outperform" rating. His price target of $140 would place the shares 20% higher than their current level, hitting a fresh all-time high in the process.

Montani thinks Five Below represents one of the best growth profiles in the bricks-and-mortar universe, and it's hard to argue otherwise. Retail chains may be fickle, but Five Below just wrapped up what will be its 12th consecutive year of positive comps when it makes its numbers official shortly after next Wednesday's market close. Quarterly comps have come in negative just once in that span. Stack brisk expansion on top of the consistently growing unit-level sales, and you have a surprisingly steady growth darling in the retail space. 

Exterior of a Five Below store.

Image source: Five Below.

Rise above

The timing of Montani's bullish initiation can't be a coincidence. It comes six trading days before Five Below's seasonally potent fiscal fourth-quarter report. He could've waited until after the earnings release to make his call, by which time he'd have confirmation for his bullish thesis calling for strong comps, sales, and earnings growth, but trigger fingers will get itchy when an analyst is expecting another bar-raising performance.

On the other hand, Montani isn't really going out on much of a limb. He probably just worked the easy math. We already know, for example, that the holidays were good to this chain, which offers stylish goods across various categories for just $5 or less. In mid-January, the all-weather retailer announced preliminary sales through the nine weeks ending Jan. 5. Net sales for that period, which of course include the holiday season, rose 24.6% to $526.1 million, as new openings over the past year combined nicely with a 4.9% surge in comps. A month earlier, Five Below was guiding investors to expect 17% to 19% growth for the quarter on a 3% to 4% uptick in comps.

"We expect to slightly exceed our sales guidance," Five Below CEO Joel Anderson said in reviewing the company's performance over the holidays. But Wall Street's still missing the boat here. 

Check out the latest earnings call transcript for Five Below.

Analysts are perched at an average of $602 million in net sales for the fiscal quarter that ended in early February. That goal would "slightly exceed" the $593 million to $600 million that Five Below was modeling in early December, but keep in mind that even though the last month in the fiscal fourth quarter is a sleepy one for the cheap-chic discounter, it would have had to ring up net sales of just $75.9 million -- 8% below the $82.5 million it served up in the final month of the prior fiscal year -- to hit $602 million. Since there are more than 100 stores now than there were a year earlier, we're talking about a double-digit decline in comps for the final month. That's just not likely to happen.

Even if we were to conservatively say that net sales in the final month of the fourth quarter would have decelerated from 24.6% to 15% -- something that would require comps to be negative for the month -- net sales would still be at nearly $621 million. If we go with a more reasonable 20% boost in net sales for the month, we would see the top line poking its head above $625 million. With the consensus at $602 million, it's easy to see why Montani is getting in ahead of last week's curtain pull. Five Below is going to crush analyst sales targets.

There will be a little more mystery as we work our way to the other end of the income statement. Five Below was targeting earnings per share of $1.53 to $1.57 in early December, and its mid-January update only said that it would land at the high end of its earnings guidance range. Analysts are lining up accordingly, parked at $1.58 a share. But Five Below has a knack for being conservative, so the market's probably not aiming high enough again. In fact, Five Below has landed higher than analyst profit forecasts every time over the past year.

Well played, Montani. Better played, Five Below.