Fastenal Company (FAST)
Our analysis: FAST rated Reduce
Exceptional underlying business severely overvalued; initiate Reduce on structural multiple compression risk.
Bull: Accelerated adoption of onsite locations and digital vending solutions drives continued wallet share gains. Automated supply chain routing improves operating leverage, expanding operating margins to 21% and sustaining a 26x terminal multiple.
Severe Valuation Normalization: Market normalizes the valuation multiple to a 20x-22x P/E range, reversing the current 32x premium irrespective of fundamental operating performance.
Reduce. Fastenal is a phenomenal business operating with best-in-class capital efficiency, but it trades at an unjustifiable premium. The implied 10.37% perpetual growth rate embedded in current pricing is mathematically disconnected from realistic mature-state industrial distribution.
Position sizing playbook →| Market cap | $50.2B | |
|---|---|---|
| Revenue (ttm) | 8.4B | |
| Net income (ttm) | 1.3B | |
| EPS (ttm) | $1.13 | |
| Shares out | 1.1B | |
| P/E (trailing) | 39.1x | |
| P/E (forward) | 32.0x | |
| Dividend | $0.96 (2.17%) | |
| Volume | 4,384,320 | |
| Beta | 0.74 | |
| Price target | $45.8 | +3.6% |
Price
Recent price action with selectable time range.
Financial snapshot
- Revenue (ttm)
- 8.4B
- Net income (ttm)
- 1.3B
- EPS (ttm)
- $1.13
- P/E (trailing)
- 39.1x
- P/E (forward)
- 32.0x
- Market cap
- $50.2B
| Item | P1 | P2 | P3 | P4 | Trend |
|---|---|---|---|---|---|
| Period | 2022-12-31 | 2023-12-31 | 2024-12-31 | 2025-12-31 | Trend |
| Revenue | $6.98B | $7.35B | $7.55B | $8.20B | +5.5% |
| Gross profit | $3.22B | $3.35B | $3.40B | $3.69B | +4.7% |
| Operating income | $1.45B | $1.53B | $1.51B | $1.66B | +4.4% |
| Net income | $1.09B | $1.16B | $1.15B | $1.26B | +5.0% |
| EPS (diluted) | $0.95 | $1.01 | $1.00 | $1.09 | +4.9% |
| EBITDA | $1.63B | $1.71B | $1.69B | $1.84B | +4.1% |
| R&D | — | — | — | — | — |
| SG&A | $1.76B | $1.83B | $1.89B | $2.04B | +4.9% |
Fair-value bridge
- Fair value (low)
- $25.4
- Fair value (mid)
- $33.2
- Fair value (high)
- $41.0
- Current price
- $44.2
- Upside to mid
- -24.2%
Valuation models
| Model | Fair value (mid) | Weight |
|---|---|---|
| Multi stage moat fade | $37.76 | 30% |
| Owner earnings | $36.64 | 20% |
| Discounted earnings | $30.38 | 20% |
| Forward earnings | $30.34 | 15% |
| FCFF DCF | $30.65 | 10% |
| Peg adjusted peer | $16.24 | 5% |
| Reverse DCF | $0.00 | 0% |
Analyst consensus
Latest news · FAST
Recent company headlines from major financial publishers.
Valuation
- Market cap
- $50.2B
- P/E (trailing)
- 39.1x
- P/E (forward)
- 32.0x
- P/S
- 6.0x
- P/B
- 12.7x
- PEG
- 3.08
- EV / EBITDA
- 26.9x
Profitability
- Gross margin
- 44.9%
- Operating margin
- 20.2%
- ROE
- 33.8%
- ROA
- 21.2%
- ROIC
- 31.5%
Balance sheet
- Debt / equity
- 0.11
- Current ratio
- 4.39
- Quick ratio
- 2.13
Trading
- Beta
- 0.74
- Volume
- 4,384,320
- Dividend yield
- 2.2%
Scenarios & expected return
Accelerated adoption of onsite locations and digital vending solutions drives continued wallet share gains. Automated supply chain routing improves operating leverage, expanding operating margins to 21% and sustaining a 26x terminal multiple.
- Revenue CAGR sustained at 10% through year 5.
- Operating margins expand systematically to 21.0%.
- Terminal P/E multiple is held at a premium 26x.
Growth normalizes as the business matures. Revenue CAGR decays from 10.9% to 5.5% over five years. Margins remain resilient at 20.2%, but the market multiple compresses to 22x, reflecting realistic mature-state distribution economics.
- Revenue growth fades to 5.5% by Year 5.
- Operating margins are defended at historical 20.2%.
- Terminal P/E multiple compresses to 22x.
An industrial recession severely restricts MRO volumes. Revenue growth stalls entirely, operating margins slip below 19% due to SG&A deleverage at onsite branches, and the valuation multiple violently contracts to 18x.
- Revenue growth flatlines in the near term.
- Operating margins degrade to 18.0%.
- Terminal P/E multiple collapses to 18x.
Valuation models & bridge
| Model | Weight | FV / share | vs spot | Contribution |
|---|---|---|---|---|
| Multi stage moat fade | 30% | $37.8 | -14.5% | |
| Owner earnings | 20% | $36.6 | -17.0% | |
| Discounted earnings | 20% | $30.4 | -31.2% | |
| Forward earnings | 15% | $30.3 | -31.3% | |
| FCFF DCF | 10% | $30.6 | -30.6% | |
| Peg adjusted peer | 5% | $16.2 | -63.2% | |
| Reverse DCF | 0% | $0.00 | -100.0% | |
| Composite FV (weighted) | 100% | $33.2 | -24.2% |
Sensitivity: Ke × terminal growth
| Ke ↓ / g → | 2.0% | 2.5% | 3.0% | 3.5% | 4.0% |
|---|---|---|---|---|---|
| 5.8% | $42.0 | $48.3 | $57.0 | $58.0 | $58.0 |
| 6.8% | $33.2 | $37.0 | $42.0 | $48.3 | $57.0 |
| 7.8% | $27.4 | $30.0 | $33.2 | $37.0 | $42.0 |
| 8.8% | $23.4 | $25.3 | $27.4 | $30.0 | $33.2 |
| 9.8% | $20.4 | $21.8 | $23.4 | $25.3 | $27.4 |
Scorecard
| Category | Weight | Score | Reading |
|---|---|---|---|
| Valuation | 11% | 5.0 | |
| Management | 11% | 7.7 | |
| Balance Sheet | 11% | 8.5 | |
| Profitability | 11% | 7.5 | |
| Revenue Growth | 11% | 6.0 | |
| Risk Assessment | 11% | 9.0 | |
| Competitive Moat | 11% | 9.0 | |
| Earnings Quality | 11% | 6.5 | |
| Capital Efficiency | 11% | 8.5 |
Position sizing & entry playbook
- Trim or exit exposure into the current multiple euphoria. A 32x forward P/E for a mature industrial distributor ignores terminal deceleration dynamics.
Next earnings
Upcoming earnings date and setup when available.