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Fastenal Company (FAST)
NASDAQ:FAST
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Fastenal Company
(NASDAQ:FAST)73Outperform
Positive Factors
Market Share
Optimism around market share improving in 2025 is contributing positively to Fastenal's outlook.
Sales Growth
February daily sales came in at +5.0% year-over-year, better than expected, indicating growth.
Negative Factors
Industrial Activity
Soft industrial activity will limit EPS upside and multiple expansion.
Fastenal Company (FAST) vs. S&P 500 (SPY)
Market Cap
$44.64B
Dividend Yield2%
Average Volume (3M)3.05M
Price to Earnings (P/E)38.9
Beta (1Y)0.80
Revenue Growth2.71%
EPS Growth-0.63%
CountryUS
Employees23,702
SectorIndustrials
Sector Strength66
IndustryIndustrial Equipment Distributors
Share Statistics
EPS (TTM)2.00
Shares Outstanding573,451,100
10 Day Avg. Volume3,744,551
30 Day Avg. Volume3,047,078
Financial Highlights & Ratios
PEG Ratio22.98
Price to Book (P/B)N/A
Price to Sales (P/S)5.92
Price to Cash Flow (P/CF)39.50
P/FCF Ratio39.50
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$78.25Price Target Upside-2.16% Downside
Rating ConsensusHold
Number of Analyst Covering6
Fastenal Company Business Overview & Revenue Model
Company DescriptionFastenal Company (FAST) is a leading industrial supply company headquartered in Winona, Minnesota. The company operates in the distribution and retail sectors, specializing in a wide range of industrial and construction supplies. Fastenal's core products include fasteners, tools, safety equipment, and various manufacturing and construction materials. The company serves a diverse customer base across multiple industries, including manufacturing, construction, and government operations, through an extensive network of physical stores and online platforms.
How the Company Makes MoneyFastenal Company generates revenue primarily through the sale of its extensive product catalog, which includes fasteners, tools, and safety equipment. The company's business model revolves around its vast distribution network, consisting of thousands of local branches and on-site locations that provide immediate access to critical supplies for its customers. Revenue is driven by direct sales to businesses and government entities, leveraging both physical locations and e-commerce platforms. Additionally, Fastenal's industrial vending solutions and inventory management services create recurring revenue streams by embedding their services within customer operations, ensuring a steady demand for their products. Strategic partnerships with manufacturers and suppliers also play a significant role in optimizing product offerings and pricing, enhancing Fastenal's competitive edge in the industrial supply market.
Fastenal Company Financial Statement Overview
Summary
Fastenal Company exhibits a strong financial position, with robust profitability, healthy revenue growth, and effective cash management. The balance sheet is stable, although rising liabilities could be a future risk. Overall, the company's financial health is solid, with opportunities for continued growth and a need to monitor leverage carefully.Income Statement
The company demonstrated strong financial performance with a consistent increase in total revenue from 2020 to TTM (Trailing-Twelve-Months). The gross profit margin and net profit margin remain robust, maintaining high profitability levels. Revenue growth rate over the years indicates a healthy business trajectory, although the growth in 2024 TTM was modest compared to previous years. EBITDA margin is stable, reflecting efficient cost management.85
Very Positive
Balance Sheet
Fastenal Company has a strong equity base, with a significant increase in stockholders' equity from 2020 to TTM. The debt-to-equity ratio is moderate, indicating a balanced approach to leveraging. Return on equity (ROE) is healthy, showcasing effective use of equity capital. However, the total liabilities have also grown, which might indicate increased leverage risk if not managed properly.78
Positive
Cash Flow
The cash flow statement reveals a strong operating cash flow, which consistently exceeds net income, indicating good cash conversion. Free cash flow growth rate has been positive, though it declined in the TTM period, posing a potential concern. The company effectively manages its capital expenditures to sustain free cash flow generation.82
Very Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 7.55B | 7.35B | 6.98B | 6.01B | 5.65B | Gross Profit |
| 3.40B | 3.35B | 3.22B | 2.78B | 2.57B | EBIT |
| 1.51B | 1.53B | 1.45B | 1.22B | 1.14B | EBITDA |
| 1.51B | 1.71B | 1.63B | 1.39B | 1.30B | Net Income Common Stockholders |
| 1.15B | 1.16B | 1.09B | 925.00M | 859.10M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 255.80M | 221.30M | 230.10M | 236.20M | 245.70M | Total Assets |
| 4.70B | 4.46B | 4.55B | 4.30B | 3.96B | Total Debt |
| 485.40M | 535.00M | 802.10M | 636.80M | 650.10M | Net Debt |
| 229.60M | 313.70M | 572.00M | 400.60M | 404.40M | Total Liabilities |
| 1.08B | 1.11B | 1.39B | 1.26B | 1.23B | Stockholders Equity |
| 3.62B | 3.35B | 3.16B | 3.04B | 2.73B |
| Cash Flow | Free Cash Flow | |||
| 946.80M | 1.26B | 767.20M | 613.50M | 933.70M | Operating Cash Flow |
| 1.17B | 1.43B | 941.00M | 770.10M | 1.10B | Investing Cash Flow |
| -214.50M | -161.20M | -163.00M | -148.50M | -281.70M | Financing Cash Flow |
| -913.70M | -1.28B | -774.90M | -627.10M | -754.40M |
Fastenal Company Technical Analysis
Positive
79.98
Price Trends
74.09
Positive
76.66
Positive
71.42
Positive
Market Momentum
0.66
Negative
71.25
Negative
75.05
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For FAST, the sentiment is Positive. The current price of 79.98 is above the 20-day moving average (MA) of 74.97, above the 50-day MA of 74.09, and above the 200-day MA of 71.42, indicating a bullish trend. The MACD of 0.66 indicates Negative momentum. The RSI at 71.25 is Negative, neither overbought nor oversold. The STOCH value of 75.05 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for FAST.
Fastenal Company Risk Analysis
Fastenal Company disclosed 33 risk factors in its most recent earnings report. Fastenal Company reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Fastenal Company Peers Comparison
Overall Rating
UnderperformOutperform
Sector (62)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
80 Outperform | $1.23B | 18.61 | 17.54% | ― | 3.60% | 17.58% | |
78 Outperform | $8.79B | 23.18 | 22.70% | 0.69% | 0.37% | 3.52% | |
73 Outperform | $44.64B | 38.86 | 33.04% | 2.00% | 2.71% | -0.63% | |
71 Outperform | $48.02B | 25.56 | 58.98% | 0.82% | 4.19% | 6.60% | |
69 Neutral | $4.48B | 19.14 | 17.09% | 4.19% | -5.24% | -28.94% | |
62 Neutral | $8.11B | 13.34 | 1.17% | 3.02% | 4.16% | -15.14% |
* Industrials Sector Average
Performance Comparison
FAST
Fastenal Company
79.98
7.30
10.04%
AIT
Applied Industrial Technologies
230.01
48.64
26.82%
DXPE
DXP Enterprises
78.69
33.85
75.49%
MSM
MSC Industrial
82.20
-10.89
-11.70%
GWW
WW Grainger
1,007.71
51.35
5.37%
Fastenal Company Earnings Call Summary
Earnings Call Date: Jan 17, 2025 | % Change Since: 7.59% | Next Earnings Date: Apr 11, 2025
Earnings Call Sentiment Neutral
The earnings call reflects a mixed sentiment with significant achievements in revenue growth among high-spending customer sites and eCommerce expansion. However, challenges are notable with declines in EPS, operating margin, and the impact of holiday shutdowns affecting sales growth. The sentiment is balanced with both positive and negative elements.Highlights
Revenue Growth in High-Value Customer Sites
Revenue through customer sites spending more than $10,000 per month grew at a compound annual growth rate of 14% since 2017. These sites account for 77% of total sales.
Growth in Onsite Program
The Onsite program saw customer sites spending at least $50,000 per month grow at an 18% compound annual growth rate since 2017.
Increase in Dividend
The quarterly dividend was raised by 10%, reflecting confidence in future cash flow generation.
Strong eCommerce Performance
eCommerce sales grew by 28%, with eProcurement growing at 37.6%.
Lowlights
Decline in EPS
Earnings per share (EPS) fell by about 2% in the fourth quarter.
Slow Growth in December
Sales growth in December was flat due to an over 20% decline in the last 5 days, attributed to holiday shutdowns.
Operating Margin Decrease
Operating margin in Q4 2024 was 18.9%, down 120 basis points year-over-year.
Gross Margin Pressure
Gross margin decreased by 70 basis points due to product margin pressure and higher container costs.
Company Guidance
During the Q4 2024 earnings call for Fastenal, the company provided detailed guidance, highlighting a 3.7% overall sales growth for the quarter, with daily sales up by 2.1%. The company's earnings per share (EPS) decreased by 2% to $0.46. Fastenal observed a notable increase in customer sites, with those spending over $10,000 per month constituting 77% of total sales, reflecting a compound annual growth rate of 14% since 2017. They also reported that customer sites spending more than $50,000 monthly have grown at an annual rate of 18%. Fastenal's Onsite program, contributing to 45% of sales, showed a 16% annual growth in customer sites spending. For 2025, the company projects capital spending between $265 million and $285 million, with increased investments in technology and digital capabilities. The company raised its quarterly dividend by approximately 10%, reflecting confidence in ongoing strong cash flow generation. Additionally, Fastenal aims to enhance its eCommerce and FMI Technology contributions to sales, targeting a digital footprint touching 66% to 68% of sales.Fastenal Company Corporate Events
Executive/Board Changes
Fastenal Company Board Changes: Lundquist Departs, Ericson Joins
Neutral
Jan 17, 2025
On January 16, 2025, Nicholas J. Lundquist, a long-serving director and former executive of Fastenal Company, announced he would not seek re-election due to term limits, ending a 46-year tenure that exemplified the company’s internal promotion philosophy. Simultaneously, the Board appointed Brady D. Ericson as an independent director, bringing extensive leadership experience from PHINIA Inc. and BorgWarner, to maintain the board’s composition and enhance strategic oversight, with Ericson also joining the Audit Committee.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.