FAST Key Financial Metrics & Ratios

Summary

Business

Earnings Call

Valuation

Profitability

Financial Health

10Y annualized return is very good at 14.2% per year

FAST has met or exceeded earnings expectations in some recent quarters (5/10)

Strong Return on Equity

Healthy Profit Margins

Strong Liquidity Ratios

Low Debt Levels

🏢 Strong Customer Base

📈 Effective Business Model

💰 Strong Cash Flow Generation

🚀 Growth in E-commerce and Technology

📊 Positive Market Sentiment

High Price Ratios

High Price-to-Cash-Flow Ratio

Moderate Cash Position

⚠️ Customer Site Performance

📉 Margin Pressure

⏳ Economic Uncertainty

🔄 Dependency on Key Accounts

Fastenal demonstrates strong business quality through its effective business model, robust cash flow generation, and a concentrated customer base. However, challenges in lower-tier customer segments and margin pressures could affect growth. On the future prospects front, growth in e-commerce and technology, along with improving market sentiment, present opportunities, though economic uncertainties and dependency on key accounts pose risks.

Analysis Date: January 17, 2025
Last Updated: March 12, 2025

+277%

+14.2% per year

Past performance does not guarantee future results. The data presented is indicative and may not be updated in real-time.

Country US

Exchange NASDAQ

Industry Industrial - Distribution

Sector Industrials

Market Cap $41.23B

CEO Mr. Daniel L. Florness

Fastenal Company is a business that sells industrial and construction supplies. They provide a variety of products like screws, bolts, and other fasteners that are used in building things and fixing machines. Fastenal has many locations where customers, including factories and construction workers, can easily buy what they need. Founded in 1967 and based in Minnesota, they help a wide range of industries keep their operations running smoothly.

Streams of revenue

Fasteners: 50%

Safety Products: 20%

Tools: 15%

Janitorial Supplies: 10%

Other: 5%

Estimations for reference only

Geographic Distribution

UNITED STATES: 91%

Canada and Mexico: 7%

Non-North America: 2%

Core Products

🛠️

Tools Hand and power tools

🔩

Fasteners Nuts, bolts, screws

🦺

Safety Products PPE and safety gear

🧹

Janitorial Supplies Cleaning products

Business Type

Business to Business

Competitive Advantages

🤝

Strategic Partnerships Fastenal's collaborations with OEMs and contractors create long-term relationships, ensuring a steady stream of business and fostering customer dependency on their products.

🛠️

Diverse Product Offering The wide range of industrial and construction supplies, including specialized fasteners and hardware, allows Fastenal to cater to various customer needs across multiple industries.

🏆

Strong Brand Recognition With decades of experience in the industry, Fastenal has built a reputable brand that is trusted by various sectors, enhancing customer loyalty and retention.

🌐

Extensive Distribution Network Fastenal's large network of over 3,200 in-market locations and multiple distribution centers enables efficient supply chain management and quick delivery to customers.

📦

Innovative Inventory Management Solutions Advanced inventory management services, such as vending solutions and tailored supply chain systems, provide added value to customers and enhance operational efficiency.

Key Business Risks

📉

Economic Downturns Economic recessions can reduce demand for construction and industrial supplies, impacting sales revenue.

🔥

Market Competition Intense competition from other distributors may erode market share and pressure pricing strategies.

📜

Regulatory Changes Changes in regulations affecting safety, environmental standards, or trade can create compliance challenges and costs.

⚠️

Supply Chain Disruptions Interruptions in the supply chain can lead to delays in acquiring essential products and increased costs.

💻

Technological Advancements Failure to keep pace with technological changes in distribution and inventory management can lead to inefficiencies.

Fastenal CEO on raising prices due to tariffs: The supply chain has become more expensive

Fastenal CEO Dan Florness joins 'Squawk Box' to discuss the impact of President Trump's tariff policy, why he's raising prices as part of a new strate...

Fastenal: Expensive But Strong Growth Prospects

Fastenal's shift from branch closures to expansion, creates strong growth outlook. Investments in FASTCrib and digital services enhance customer reten...

Trailing Twelve Months (TTM) values provide a view of the company's performance over the last year.

Graham Value Metrics

Benjamin Graham's value investing approach focuses on finding stocks with a significant margin of safety between their intrinsic value and market price.

Intrinsic Value

Estimated fair value based on Graham's formula

$47.04

Current Market Price: $74.45

IV/P Ratio: 0.63x (>1.0 indicates undervalued)

Margin of Safety

Gap between intrinsic value and market price

-57.99999999999999%

Graham recommended a minimum of 20-30% margin of safety

Higher values indicate a greater potential discount to fair value

Graham Criteria Checklist

Benjamin Graham's value investing checklist for FAST

Positive earnings (5+ years)

Dividend history (5+ years)

P/E ratio ≤ 20 (37.67)

P/B ratio ≤ 1.5 (11.98)

Current ratio ≥ 2.0 (4.67x)

Long-term debt < Net current assets (0.12x)

Margin of safety (-57.99999999999999%)

FAST does not meet all Graham criteria

Trailing Twelve Months (TTM) values provide a view of the company's performance over the last year.

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About Profitability Metrics

Profitability metrics measure a company's ability to generate earnings relative to its revenue, operating costs, and other relevant metrics. Higher values generally indicate better performance.

Return on Equity (ROE)

Measures how efficiently a company uses its equity to generate profits

31.99%

10% 15%

Higher values indicate better returns for shareholders

TTM (as of 2025-04-30)

Gross Profit Margin

Percentage of revenue retained after accounting for cost of goods sold

44.01%

20% 40%

Higher values indicate better efficiency in production

TTM (as of 2025-04-30)

Net Profit Margin

Percentage of revenue retained after accounting for all expenses

15.25%

8% 15%

Higher values indicate better overall profitability

TTM (as of 2025-04-30)

Healthy Profit Margins

44.01%

Gross Profit Margin

15.25%

Net Profit Margin

The gross profit margin is 44.01%, indicating a strong ability to generate profit from sales. The net profit margin of 15.25% reflects solid profitability after all expenses.

High Price-to-Cash-Flow Ratio

44.86

P/FCF Ratio

The price-to-free-cash-flow (P/FCF) ratio is 44.86, suggesting that the stock might be expensive relative to its cash generation capabilities.

About Financial Health Metrics

Financial health metrics assess a company's ability to meet its financial obligations and its overall financial stability.

Debt to Equity Ratio

Total debt divided by total equity

0.13x

1.0x 2.0x

Lower values indicate less financial leverage and risk

Less than 1.0 is conservative, 1.0-2.0 is moderate, >2.0 indicates high risk

Q4 2024

Current Ratio

Current assets divided by current liabilities

4.67x

1.0x 2.0x

Higher values indicate better short-term liquidity

Less than 1.0 is concerning, 1.0-2.0 is adequate, greater than 2.0 is good

Q4 2024

Strong Liquidity Ratios

4.67

Current Ratio

2.28

Quick Ratio

The current ratio of 4.67 and quick ratio of 2.28 indicate a strong ability to cover short-term liabilities with current assets.

Low Debt Levels

0.13

Debt-to-Equity Ratio

The debt-to-equity ratio of 0.13 shows that the company is conservatively leveraged, suggesting lower financial risk.

Moderate Cash Position

0.37

Cash Ratio

The cash ratio of 0.37 indicates that while the company has good liquidity, its cash reserves are not excessively high compared to current liabilities.

Meeting Expectations

5 /10

Higher values indicate better execution and credibility

🏢 Strong Customer Base

77%

Percentage of Sales from 10K+ Customers

18%

Growth of 50K+ Customer Sites CAGR

Fastenal has a robust customer base with approximately 270,000 unique customer sites, and a significant percentage of sales derived from larger customers. In 2024, about 5% of customer sites generated 77% of total sales, showing a strong concentration of revenue from key accounts.

📈 Effective Business Model

2,031

Number of Onsite Locations

12%

Growth in Onsite Customer Sites

The company has a well-structured business model focusing on onsite services and vending solutions, which have proven successful in enhancing customer engagement and operational efficiency. The onsite program has grown significantly, with a 12% increase in customer sites compared to the previous year.

💰 Strong Cash Flow Generation

102%

Operating Cash Flow as % of Net Income

10%

Dividend Increase

Fastenal generated significant operating cash flow, amounting to 102% of net income for the full year 2024, reflecting strong financial health and the ability to reward shareholders through dividends, which were increased by 10%.

⚠️ Customer Site Performance

CAGR for 5K-10K Customer Sites

Percentage of Sales from <5K Customers

While Fastenal has a solid customer base, the bottom two customer segments (those spending less than $10,000/month) have shown slow growth, indicating potential challenges in capturing lower-tier customers.

📉 Margin Pressure

18.9%

Operating Margin (Q4 2024)

44.8%

Gross Margin (Q4 2023)

The company faced margin pressures in 2024 due to product mix and shipping costs, particularly during the holiday season. This could affect profitability if not managed effectively.

🚀 Growth in E-commerce and Technology

28%

E-commerce Growth Rate

66% to 68%

Projected Digital Revenue Contribution

Fastenal is focusing on improving its e-commerce capabilities, which grew by 28% in 2024. Investments in technology and digital capabilities, including AI, are expected to enhance service delivery and customer engagement.

📊 Positive Market Sentiment

12%

Contract Base Growth (December)

There is a noted improvement in customer sentiment post-election, suggesting a more favorable economic environment for growth in 2025. Regional leadership reports increasing optimism, which may translate into higher sales.

⏳ Economic Uncertainty

Sub-50

PMI Status

Despite positive sentiment, the broader economic landscape remains uncertain, with the PMI indicating modest contraction in manufacturing, which may impact future sales growth.

🔄 Dependency on Key Accounts

77%

Percentage of Revenue from Top 5% Customers

Fastenal's business model heavily relies on a small percentage of high-revenue accounts, which poses risks if these key customers face downturns or decide to switch suppliers.