Been watching Five Below's stock chart and it's honestly brutal to look at. Down over 60% last year, and the brick-and-mortar retailer has been taking hit after hit. Failed guidance multiple times, CEO departure, negative comps - the works. But here's what caught my attention: with earnings coming up this week, there might actually be a setup forming.

Let me break down what happened. Five Below came out of the 2023 holiday season looking solid, but March hit different. They missed earnings expectations on both revenue and profit. Then it got worse in June - another miss on top and bottom line. Same-store sales turned negative. They slashed guidance. Then their longtime CEO Joel Anderson walked out the door. Each piece of bad news just kept stacking up through the spring and summer.

The stock got absolutely hammered. We're talking about one of only a handful of mega-cap retailers to lose more than half its value in a single year. It's been a rough stretch for anyone holding this one.

But here's the thing - and this is where I think the analysis from observers like Rick Munarriz gets interesting - all this bad news is probably already priced in. The company's been walking guidance down three separate times since late March. At this point, the market's expecting the worst. So if management comes out and doesn't completely tank the outlook again, or if there's any positive noise about finding a new CEO, this thing could bounce hard.

The fundamentals aren't broken either. Five Below's still sitting on a solid balance sheet. The previous CEO wanted to grow store count from 1,500 to 3,500 over six years - pretty aggressive. Now if they announce they're scaling that back, investors might actually view that as prudent. The market rewards that kind of realism sometimes.

Valuation-wise, it's trading under 16x trailing earnings and 1.3x revenue. For a company with Five Below's historical growth profile, that's genuinely cheap. Yeah, comps will be negative this year, but that's happened before in the past decade and they recovered.

Earnings hit Wednesday after close. This stock's going to move either way. The downside feels limited from here given everything's already been thrown at it. Upside could surprise if they manage expectations right. Worth keeping on the radar if you're looking at beaten-down retail plays.