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Fastenal Company (FAST)
NASDAQ:FAST
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Fastenal Company (FAST) AI Stock Analysis

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FAST

Fastenal Company

(NASDAQ:FAST)

Rating:79Outperform
Price Target:
$52.00
▲(8.49%Upside)
Fastenal Company's strong financial performance and a very positive earnings call are the primary drivers of its high overall stock score. While the stock's technical indicators suggest a bullish trend, caution is advised due to potential overbought conditions. The high P/E ratio raises valuation concerns, but the attractive dividend yield offers some compensation.
Positive Factors
Financial Performance
The company beat consensus on sales, gross margin, and operating margin.
Revenue Pipeline
Total contract signings up 10% points to future revenue pipeline.
Sales Growth
Investors believe FAST will have strong sales growth in the second half, with share gains bolstered by an accelerating pricing environment.
Negative Factors
Cost Concerns
Shares faded late in the conference call on comments that price/cost could see 10-15 basis points of giveback in the second half.
Price/Cost Pressure
The main pushback is around valuation, as investors are paying more for growth at FAST than they have historically.
Valuation Concerns
The stock trades at a large premium to peers, which reflects better operational performance that will continue.

Fastenal Company (FAST) vs. SPDR S&P 500 ETF (SPY)

Fastenal Company Business Overview & Revenue Model

Company DescriptionFastenal Company, together with its subsidiaries, engages in the wholesale distribution of industrial and construction supplies in the United States, Canada, Mexico, North America, and internationally. It offers fasteners, and related industrial and construction supplies under the Fastenal name. The company's fastener products include threaded fasteners, bolts, nuts, screws, studs, and related washers, which are used in manufactured products and construction projects, as well as in the maintenance and repair of machines. It also offers miscellaneous supplies and hardware, including pins, machinery keys, concrete anchors, metal framing systems, wire ropes, strut products, rivets, and related accessories. The company serves the manufacturing market comprising original equipment manufacturers; maintenance, repair, and operations; and non-residential construction market, which includes general, electrical, plumbing, sheet metal, and road contractors. It also serves farmers, truckers, railroads, mining companies, schools, and retail trades; and oil exploration, production, and refinement companies, as well as federal, state, and local governmental entities. The company distributes its products through a network of 3,209 in-market locations and 15 distribution centers. Fastenal Company was founded in 1967 and is headquartered in Winona, Minnesota.
How the Company Makes MoneyFastenal Company generates revenue primarily through the sale of industrial and construction supplies. The company's business model revolves around its vast network of retail stores, online platforms, and Onsite locations, which provide direct access to a broad range of products. Key revenue streams include the sale of fasteners, tools, and safety equipment. Additionally, Fastenal offers inventory management solutions and industrial vending services, allowing customers to efficiently manage their supply needs. Partnerships with various manufacturers and a strong logistics network further enhance Fastenal's ability to deliver products quickly and reliably, contributing to its revenue growth.

Fastenal Company Earnings Call Summary

Earnings Call Date:Jul 14, 2025
(Q2-2025)
|
% Change Since: 10.77%|
Next Earnings Date:Oct 13, 2025
Earnings Call Sentiment Positive
The earnings call highlighted significant achievements, including record revenue, strong contract growth, improved operating margins, and digital sales. However, challenges such as sluggish market conditions, tariff uncertainties, and increased inventory levels were noted. Overall, the positive aspects, particularly in revenue and market share growth, outweighed the challenges.
Q2-2025 Updates
Positive Updates
Record Revenue Achievement
Fastenal exceeded $2 billion in revenue for the first time in company history, marking an 8.6% increase in sales compared to the previous year.
Contract Growth and Market Share
Contract signings grew by 11%, with 84 signings in Q2, outperforming expectations. Contract customer sales increased to 73.2% of revenues.
Increased Operating Margin
Operating margin improved to 21%, with an incremental margin of 30% for the quarter, driven by leveraging SG&A and a successful fastener expansion project.
E-business and Digital Sales Growth
E-business sales grew by 13.5%, reaching over 30% of total sales for the first time, contributing to 61% of total sales under the digital footprint.
Improved Cash Generation
Operating cash generation was $279 million, or 84.4% of net income, above traditional levels despite increased inventory investment.
Negative Updates
Sluggish Market Conditions
Market conditions remained sluggish, with a stabilized but sub-50 PMI, indicating contraction in the manufacturing sector.
FMI Technology Softness
The adoption of FMI Technology showed a slight decline, with the number of new installations dropping compared to previous periods.
Tariff Uncertainty
Trade policy and tariffs created uncertainty, with potential impacts on demand and supply chain costs, leading to cautious customer sentiment.
Inventory Increase
Inventories increased by 14.7%, partly due to preemptive stocking ahead of potential tariffs, which could affect profitability if not managed properly.
Company Guidance
During the Fastenal Q2 2025 earnings conference call, the company provided guidance reflecting strong performance and future expectations. Fastenal reported revenue exceeding $2 billion for the first time, with sales growing by 8.6%. This growth was partly driven by an increase in contract signings, which rose from 4% to 11.2% over the last year. Contract customer sales grew by 11% and now comprise 73.2% of total revenues. Revenue from customer sites generating $10,000 or more per month increased by 11.6%, with a notable 14.5% rise in sites generating $50,000 or more. Fastenal's e-business sales grew by 13.5%, making up over 30% of total sales for the first time. Additionally, Fastenal implemented pricing actions that contributed 140 to 170 basis points to sales growth, with further pricing adjustments expected in the second half of 2025. The company aims to leverage its strong contract pipeline and pricing strategy to maintain its momentum in the face of ongoing market uncertainties.

Fastenal Company Financial Statement Overview

Summary
Fastenal Company exhibits strong financial health with consistent revenue and income growth, robust profitability margins, and a solid balance sheet with conservative leverage. The company's strong cash flow generation further supports its financial stability, making it well-positioned in the Industrial - Distribution industry. While growth rates are moderate, the overall financial metrics indicate a stable and profitable company with a strong foundation for future expansion.
Income Statement
88
Very Positive
Fastenal Company demonstrates strong income statement metrics with consistent revenue growth and profitability. The TTM shows a gross profit margin of 45.06%, net profit margin of 15.30%, EBIT margin of 20.10%, and EBITDA margin of 21.21%. The revenue growth rate from 2024 to TTM is 3.03%, indicating steady growth. The company maintains healthy margins, reflecting efficient operations and profit generation.
Balance Sheet
80
Positive
The balance sheet reflects a strong equity base with a debt-to-equity ratio of 0.14, indicating conservative leverage. The return on equity (ROE) is robust at 31.22%, showcasing effective use of shareholder funds. The equity ratio is high at 75.90%, pointing to a solid financial structure with a focus on equity financing, which minimizes financial risk.
Cash Flow
85
Very Positive
Fastenal Company's cash flow statement is impressive, with a free cash flow to net income ratio of 0.74, highlighting efficient cash utilization. The operating cash flow to net income ratio is 0.94, demonstrating strong cash generation relative to net income. Although the free cash flow growth rate has fluctuated, the company maintains a solid cash position to support operations and growth.
BreakdownDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue7.55B7.35B6.98B6.01B5.65B
Gross Profit3.40B3.35B3.22B2.78B2.57B
EBITDA1.69B1.71B1.63B1.39B1.30B
Net Income1.15B1.16B1.09B925.00M859.10M
Balance Sheet
Total Assets4.70B4.46B4.55B4.30B3.96B
Cash, Cash Equivalents and Short-Term Investments255.80M221.30M230.10M236.20M245.70M
Total Debt485.40M535.00M802.10M636.80M650.10M
Total Liabilities1.08B1.11B1.39B1.26B1.23B
Stockholders Equity3.62B3.35B3.16B3.04B2.73B
Cash Flow
Free Cash Flow946.80M1.26B767.20M613.50M933.70M
Operating Cash Flow1.17B1.43B941.00M770.10M1.10B
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

Technical Analysis Sentiment
Positive
Last Price47.93
Price Trends
50DMA
42.55
Positive
100DMA
40.70
Positive
200DMA
39.33
Positive
Market Momentum
MACD
1.46
Negative
RSI
82.01
Negative
STOCH
97.76
Negative
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 47.93 is above the 20-day moving average (MA) of 44.28, above the 50-day MA of 42.55, and above the 200-day MA of 39.33, indicating a bullish trend. The MACD of 1.46 indicates Negative momentum. The RSI at 82.01 is Negative, neither overbought nor oversold. The STOCH value of 97.76 is Negative, 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 (65)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
79
Outperform
$55.01B45.8432.57%2.99%4.84%2.98%
77
Outperform
$19.64B37.4018.91%2.35%3.92%1.09%
73
Outperform
$10.21B26.7822.23%0.62%0.50%4.48%
73
Outperform
$50.19B26.6857.19%0.80%3.71%7.23%
70
Outperform
$12.27B29.2330.09%1.49%-1.71%-8.68%
65
Neutral
$11.06B15.735.16%1.93%3.12%-25.59%
£33.05B26.7129.28%<0.01%
* Industrials Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
FAST
Fastenal Company
47.93
13.31
38.45%
AIT
Applied Industrial Technologies
268.07
54.56
25.55%
POOL
Pool
326.34
-40.16
-10.96%
GWW
WW Grainger
1,052.21
89.59
9.31%
WSO
Watsco
484.69
-14.15
-2.84%
GB:FERG
Ferguson PLC
16,600.00
-108.88
-0.65%

Fastenal Company Corporate Events

Executive/Board ChangesShareholder MeetingsStock Split
Fastenal Company Announces Stock Split and Board Elections
Neutral
Apr 25, 2025

Fastenal Company announced a two-for-one forward stock split of its Common Stock, with the record date set for May 5, 2025, and the effective date at the close of business on May 21, 2025. The stock split will increase the number of shares authorized for issuance to 1.6 billion, and trading will reflect this change starting May 22, 2025. Additionally, during the annual meeting held on April 24, 2025, in Winona, Minnesota, shareholders elected eleven directors, ratified PricewaterhouseCoopers LLP as the independent accounting firm for 2025, and approved the executive compensation package.

Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

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.Date of analysis: Jul 16, 2025