FAST Fastenal
Best-in-class distributor, durable moat, but 40x earnings bakes in perfection the numbers don't support.
The story
Fastenal is the dominant player in industrial fastener and MRO distribution, built on an entrenched on-site vending and Onsite location network that embeds it directly into customer supply chains, creating high switching costs. It's a mature, cash-generative compounder rather than a high-growth story — mid-single-digit organic growth from reshoring/manufacturing tailwinds, offset by a large e-commerce/Amazon Business competitive shadow at the low end. The stock trades at ~40x earnings, pricing in flawless execution well beyond what the underlying growth and margin profile justify.
TTM revenue growth (~6.7% YoY) and 5y CAGR (5.5%) confirm the prior 6.5% y1 fade to 3% terminal path; operating margin held flat at 20.3% TTM versus the 20% target, and sales-to-capital of 2.15 is a trivial tick up from 2.1 — no story change, drivers stay put.
Value drivers
| Revenue growth (Y1) | 6.5% |
| Terminal growth | 3.0% |
| Forecast horizon | 7y |
| Target operating margin | 20.0% |
| Years to target margin | 5 |
| Sales-to-capital | 2.15 |
| Beta | 1.05 |
| Failure probability | 1.0% |
| Cost of capital (WACC) | 9.4% |
| Terminal WACC | 9.2% |
Valuation bridge
| PV of explicit FCFF | 6.94B |
| PV of terminal value | 13.08B |
| Equity value | 19.97B |
| ÷ shares → per share | $17.41 |
News
bullish +0.30 · 8 articles
- Fastenal (FAST) Lifts Third Quarter Dividend As Payout Outlook Improves
- Fastenal Company (FAST) Gains from Reshoring Trends and AI Infrastructure Buildout
- Your Dividend Calendar for July 27–31: 10 Stocks and the Last Day to Buy Each One
- Don't Overlook Fastenal (FAST) International Revenue Trends While Assessing the Stock
- Fastenal (FAST) Q2 2026 Earnings Call Transcript
- Is FAST Stock Too Expensive as Growth and Margins Send Mixed Signals?
- FAST Trends to Watch as Digital Tools Reshape Industrial Demand Ahead
- Fastenal Stock Outlook 2026 as Digital Gains Lift Industrial Sales
Projected free cash flow to the firm
| Yr | Revenue | Growth | Margin | NOPAT | Reinvest | FCFF | PV |
|---|---|---|---|---|---|---|---|
| 1 | 9.32B | 6.5% | 20.3% | 1.44B | 264.51M | 1.17B | 1.07B |
| 2 | 9.87B | 5.9% | 20.2% | 1.52B | 256.43M | 1.26B | 1.05B |
| 3 | 10.40B | 5.3% | 20.1% | 1.59B | 244.82M | 1.35B | 1.03B |
| 4 | 10.89B | 4.8% | 20.1% | 1.66B | 229.67M | 1.43B | 999.11M |
| 5 | 11.34B | 4.2% | 20.0% | 1.72B | 211.04M | 1.51B | 965.35M |
| 6 | 11.75B | 3.6% | 20.0% | 1.79B | 189.05M | 1.60B | 931.10M |
| 7 | 12.10B | 3.0% | 20.0% | 1.84B | 163.95M | 1.68B | 892.89M |
Key risks
- Amazon Business and other e-commerce disintermediation at the low-touch end of the product line
- Manufacturing/industrial production slowdown compresses same-branch sales growth
- Onsite/vending capex intensity rises if new signings require more capital per dollar of revenue than history suggests
Catalysts
- Reshoring and AI-driven data center/infrastructure buildout lifting industrial fastener demand
- Continued Onsite location signings expanding high-margin embedded revenue share
- Dividend increases signaling management confidence in durable cash generation