Fastenal Company (FAST): A Bull Case Theory 

We came across a bullish thesis on Fastenal Company on Bullseye Investing’s Substack. In this article, we will summarize the bulls’ thesis on FAST. Fastenal Company’s share was trading at $45.78 as of October 10th. FAST’s trailing and forward P/E were 46.54 and 40.32 respectively according to Yahoo Finance.

Fastenal (FAST) is a leading provider of industrial products and services, including inventory management, supply chain solutions, tool repair, custom fabrication, and safety services, and it is North America’s largest fastener distributor. Its focus on highly specific fasteners allows the company to charge premium prices, resulting in strong margins and exceptional returns.

With minimal debt, a return on equity of 32.56%, and a ROIC/WACC ratio of 4:1, Fastenal demonstrates financial strength and high-quality operations. Its products and services cater to businesses seeking convenience and reliability, making it a trusted partner in the industrials sector. Despite this quality, the stock has seen a sharp appreciation, returning 30% over the past six months and 46% over the past year, raising questions about valuation.

While Fastenal’s fundamentals are impressive, its valuation metrics indicate overextension. Revenue growth over the past six months has been under 10%, yet the stock has surged 30%, pushing the forward PE toward 35, far above what its moderate growth would justify. A PE of 22–25 would be more reasonable, implying the company would need to increase EPS by over 60% to match this level. The price-to-book ratio of 14.73 further underscores its stretched valuation. Although Fastenal is undeniably a high-quality business, its current market price does not reflect a reasonable entry point, as growth prospects are insufficient to support the premium.

Investing requires balancing quality with value, and Fastenal exemplifies the challenge of high-quality companies trading at extreme valuations. While it remains an excellent company with strong returns and resilience, its current price diminishes the investment case. FAST is currently overvalued for its growth and more reasonable valuation would be needed to make Fastenal a compelling opportunity for new investors.

Previously we covered a bullish thesis on Watsco, Inc. (WSO) by FluentInQuality in March 2025, which highlighted the company’s market leadership in HVAC/R distribution, recurring demand, and strong capital efficiency. The company’s stock price has depreciated approximately by 25.70% since our coverage. The thesis still stands as WSO continues generating reliable cash flow. Bullseye Investing shares a similar approach but emphasizes Fastenal’s (FAST) high-margin industrial distribution model and notes valuation risks.

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Disclosure: None.