Last Updated: 19 Sep 2024
Executive Summary
Fastenal Company (FAST) is a leading industrial and construction supply distributor with a market capitalization of $40.35 billion. The company has consistently delivered strong financial performance, with a 15.5% profit margin, 20.2% operating margin, and 33.5% return on equity. Despite a recent decline in quarterly earnings growth, Fastenal's revenue growth remains positive. The stock is currently trading at $70.47, below its 52-week high of $78.14.
Company Overview
Fastenal is a Fortune 500 company headquartered in Winona, Minnesota. The company operates a network of approximately 3,200 in-market locations, providing custom inventory and dedicated sales support to local businesses. Fastenal's product offerings include fasteners, tools, safety equipment, and other industrial supplies.
Fundamental Analysis
Revenue: Fastenal's revenue has grown steadily over the past five years, reaching $7.42 billion in the trailing twelve months. The company's revenue growth is driven by its expanding customer base and its focus on providing value-added services.
Earnings: Fastenal's earnings per share (EPS) have also grown consistently, reaching $2.01 in the trailing twelve months. The company's profit margin has remained relatively stable, despite rising input costs.
Valuation: Fastenal's trailing price-to-earnings (PE) ratio of 35.06 is above the industry average. However, the company's PEG ratio of 3.863 suggests that the stock is fairly valued.
Dividend: Fastenal pays a quarterly dividend of $0.37 per share, resulting in an annual dividend yield of 0.0221%. The company has a history of increasing its dividend annually.
Technical Analysis
Trend: Fastenal's stock price has been trending lower since reaching a 52-week high of $78.14 in April 2023. The stock is currently trading below its 50-day and 200-day moving averages.
Support and Resistance: The stock has found support at the $67.50 level, which represents the 50-day moving average. Resistance is located at the $72.00 level, which represents the 200-day moving average.
Momentum: The stock's momentum indicators are currently neutral. The relative strength index (RSI) is below 50, indicating that the stock is not overbought or oversold.
Short Term Outlook
In the short term, Fastenal's stock price is likely to remain range-bound between $67.50 and $72.00. The stock may experience some volatility in the coming weeks as investors digest the company's latest earnings report. However, the overall trend for Fastenal remains positive.
Long Term Outlook
In the long term, Fastenal is well-positioned for continued growth. The company's strong customer base, expanding product offerings, and focus on value-added services should drive revenue and earnings growth in the years to come. Fastenal's stock is a solid long-term investment for investors seeking exposure to the industrial and construction supply sector.
Analyst Recommendations
Analysts have a mixed view on Fastenal's stock. Two analysts have a strong buy rating, while ten have a hold rating and two have a sell rating. The median analyst target price is $63.74, which represents a potential upside of 9.6% from the current stock price.
