Wolfe Research has named a stock that will benefit from the hype surrounding the "new Labooboo"

Wolfe Research, one of Wall Street's leading analyst firms, has named the main beneficiary of the new viral craze for collectible toys replacing the toothy Labooboo toys. US discounter chain Five Below will be able to capitalize on the popularity of Mystery Dumpling's "mystery dumplings" on social media, Wolfe believes. The retailer's ability to quickly monetize Internet trends has already led to a massive revision of its stock target price.

Wolfe Research sees significant upside potential for Five Below stock thanks to the successful monetization of a new viral trend from TikTok - Mystery Dumpling soft surprise toys from RMS, CNBC reports. Visually, these toys mimic the Chinese equivalent of dumplings - baoji steam buns - and are packaged in miniature bamboo steamers. Like Pop Mart's rival Labubu, the Mystery Dumpling line features models in a variety of colors and varying degrees of rarity for collecting.

The main value for investors is not the toy itself, but Five Below's ability to quickly identify fleeting Internet trends and capitalize on them. It also drives cross-selling of the chain's other products in the "anti-stress" category, CNBC quotes Wolfe Research analyst Spencer Hanus as saying. Exclusive agreements with RMS allow Five Below to convert the growing excitement around the toy "dumplings" into additional traffic to its stores, increase the average check and increase brand awareness, the expert emphasized.

"If current demand continues through the end of 2026, this could add an additional 100-200 basis points (1-2%) to comparable sales," Hanus wrote. He added that while investors already expect Five Below to exceed quarterly forecasts, what's happening proves the effectiveness of the retailer's strategy - even if demand for toy dumplings from TikTok slows faster than expected.

Five Below's sales momentum remains the strongest among the companies tracked by Wolfe Research. Google Trends analytics confirms the virality effect: search interest in the brand soared 100% year-over-year in March versus +67% in February, Hanus said.

Amid expectations of strong first-quarter results, the analyst raised his target price for the discounter's shares to $291 per share from $275 to $291 with a "better than market" rating (Outperform, consistent with a buy recommendation), CNBC reported. The new target implies growth of securities by 25% compared to the last closing price.

According to MarketScreener, last week leading investment banks of Wall Street arranged a mass revision of forecasts on shares Five Below in the direction of increase. The main "bull" was Bank of America, which raised its target price from $260 to $305 and maintained its "Buy" rating. Deutsche Bank, UBS and Truist also reiterated their Buy recommendations, raising their targets to $287, $285 and $261, respectively.

William Blair upgraded Five Below from Neutral (Market Perform) to Outperform. Morgan Stanley increased target price from $220 to $245, but preferred to keep neutral (Equalweight).

Five Below stock is up 24% since the start of 2026. They have a total of 16 buy recommendations and ten "hold" ratings, with no sell recommendations.

This article was AI-translated and verified by a human editor