FAST · sample dossier
Fastenal Co
56/100
OutdatedGenerated Oct 10, 2026 · 10:00 AM UTC · 3 hours ago
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EquityFastenal CoXNAS
Decision context
HOLD
62% convictionScore 56 · Hold
A mixed picture — no strong reason to buy or sell right now.
The stock trades 56.5% above our estimate.
Current price
$50.75
Estimated value range
$16.55 – $33.94
Gap vs AlphaDog estimate
-56.5%
The price is above our estimate, providing little valuation support.
Market context
Price
Price when available
Pick how far back the chart looks
1 month
+3.6%
3 months
+7.9%
6 months
+3.2%
1 year
+6.7%
Financial trajectory
Executive summary & thesis
Fastenal Co is an industrial supply distributor with a market capitalization of $58.24B, generating a 44.7% gross margin and an ROA of 21.5%.
- Strong operating profitability anchored by an ROA of 21.5% and a 44.7% gross margin.
- Top-line momentum demonstrated by latest quarter YoY revenue growth of 14.7%.
- Solid balance sheet solvency highlighted by an Altman Z-score of 35.95 and Debt/Equity of 0.11.
- Extreme valuation risk reflected in a P/E multiple of 43.38, ranking in the 0th percentile for value.
- High multiple premium with EV/EBITDA of 29.91 significantly exceeding peer LOW at 11.3 and BLDR at 10.6.
- Cash generation provides thin yield support with FCF/Share at $1.00 relative to the $50.75 stock price.
Things to keep in mind
- 1Base target implies 56.5% downsideView source
- 2P/E 43.4xView source
- 3Extreme valuation risk reflected in a P/E multiple of 43.38, ranking in the 0th percentile for value.View source
What to watch next
Factor profile
Financially conservative
| Factor | Score |
|---|---|
| Quality | 72 out of 100 (Strong). Business health — profits, returns, and consistency. Higher means a more durable company. |
| Growth | 49 out of 100 (Neutral). How fast sales and earnings are rising. Higher means the business is expanding faster. |
| Value | 6 out of 100 (Weak). How cheap the stock looks for what you get. Higher means a more attractive price. |
| Safety | 88 out of 100 (Elite). Balance-sheet cushion and fewer red flags. Higher means less risk of a nasty surprise. |
| Momentum | 62 out of 100 (Neutral). Recent share-price trend. Higher means buyers have been in control lately. |
Another way to look at it
A calmer look at both sides of the Fastenal Co story
The consensus verdict of 'Hold' dangerously understates the downside risk embedded in Fastenal's extreme valuation multiples of 43.4 P/E and 29.9 EV/EBITDA.
While bulls and bears alike fixate on operational metrics like the 21.5% ROA and 44.7% gross margin, they overlook that trailing free cash flow per share sits at just $0.80 to $1.00 on a $50.75 stock. This meager 1.6% to 2.0% free cash flow yield leaves zero margin of safety if working capital burdens or cyclical headwinds slow revenue growth from its recent 14.7% YoY pace. Furthermore, industrial peers such as Lowe's (11.3 EV/EBITDA) and Builders FirstSource (10.6 EV/EBITDA) trade at less than half Fastenal's valuation multiple, exposing FAST to severe multiple contraction. Relying on an Altman Z-score of 35.95 and low Debt/Equity of 0.11 provides balance sheet solvency but offers zero valuation cushion when growth decelerates.
Severe divergence between GAAP profitability ($382.8M Q2 net income, 15.5% net margin) and weak cash generation producing only $0.80 to $1.00 FCF per share.
Unexamined structural risk in Fastenal trading at a 170%+ EV/EBITDA premium (29.9 vs. peer BLDR at 10.6 and LOW at 11.3) despite operating in the same cyclical industrial supply environment.
Deceleration risk in trailing 1-year total return of 6.7% signaling that momentum is already stalling ahead of any revenue mean-reversion.
Uncritically extrapolating the latest quarter's 14.7% YoY revenue growth as a durable forward catalyst across the next 6 to 12 months.
Treating a pristine Altman Z-score of 35.95 and Debt/Equity of 0.11 as justification for an astronomical 14.3 Price/Book ratio.
Ignoring net insider selling of $1.67M USD over the trailing 3 months while the stock trades above both its 50-day and 200-day moving averages.
Latest quarter YoY revenue growth falls below 14.7%.
Net margin decreases below 15.5%.
Cash after investing
See whether Fastenal Co still makes cash after it spends to grow.
- Latest quarter YoY revenue growth falls below 14.7%.
- Net margin decreases below 15.5%.
- Revenue growth continues without margin deterioration
For learning and research only — not investment advice. AlphaDog doesn’t hold stocks and isn’t your financial advisor.
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