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Industrials

Fastenal

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Market Data

Financials

XBRL · SEC EDGAR

2007–2025(19yr)

Revenue

Net Income

Free CF

Metric	FY 2007	FY 2008	FY 2009	FY 2010	FY 2011	FY 2012	FY 2013	FY 2014	FY 2015	FY 2016	FY 2017	FY 2018	FY 2019	FY 2020	FY 2021	FY 2022	FY 2023	FY 2024	FY 2025Latest	YoY
Revenue	$2.1B	$2.3B	$1.9B	$2.3B	$2.8B	$3.1B	$3.3B	$3.7B	$3.9B	$4.0B	$4.4B	$5.0B	$5.3B	$5.6B	$6.0B	$7.0B	$7.3B	$7.5B	$8.2B	+8.7%
Gross Profit	$1.0B	$1.2B	$983.4M	$1.2B	$1.4B	$1.6B	$1.7B	$1.9B	$1.9B	$2.0B	$2.2B	$2.4B	$2.5B	$2.6B	$2.8B	$3.2B	$3.4B	$3.4B	$3.7B	+8.5%
Gross Margin	50.8%	52.8%	50.9%	51.8%	51.8%	51.5%	51.7%	50.8%	50.4%	49.6%	49.3%	48.3%	47.2%	45.5%	46.2%	46.1%	45.7%	45.1%	45.0%	-0.1pp
Operating Income	$376.4M	$450.2M	$295.8M	$429.7M	$574.6M	$673.7M	$712.7M	$787.6M	$828.8M	$795.8M	$881.8M	$999.2M	$1.1B	$1.1B	$1.2B	$1.5B	$1.5B	$1.5B	$1.7B	+9.6%
Operating Margin	18.3%	19.2%	15.3%	18.9%	20.8%	21.5%	21.4%	21.1%	21.4%	20.1%	20.1%	20.1%	19.8%	20.2%	20.3%	20.8%	20.8%	20.0%	20.2%	+0.2pp
Net Income	$232.6M	$279.7M	$184.4M	$265.4M	$357.9M	$420.5M	$448.6M	$494.1M	$516.4M	$499.5M	$578.6M	$751.9M	$790.9M	$859.1M	$925.0M	$1.1B	$1.2B	$1.2B	$1.3B	+9.4%
Net Margin	11.3%	12.0%	9.6%	11.7%	12.9%	13.4%	13.5%	13.2%	13.3%	12.6%	13.2%	15.1%	14.8%	15.2%	15.4%	15.6%	15.7%	15.2%	15.3%	+0.1pp
Free Cash Flow	$172.1M	$164.6M	$253.5M	$166.9M	$148.4M	$257.9M	$209.6M	$309.9M	$391.8M	$324.5M	$465.3M	$497.9M	$596.3M	$933.7M	$613.5M	$767.2M	$1.3B	$946.8M	$1.1B	+11.0%
FCF Margin	8.3%	7.0%	13.1%	7.4%	5.4%	8.2%	6.3%	8.3%	10.1%	8.2%	10.6%	10.0%	11.2%	16.5%	10.2%	11.0%	17.1%	12.5%	12.8%	+0.3pp
EPS (Diluted)	—	$1.88	$0.62	$0.90	$1.21	$1.42	$1.51	$1.66	$1.77	$1.73	$2.01	$2.62	$1.38	$1.49	$1.60	$1.89	$2.02	$2.00	$1.09	-45.5%

Total Debt$125.0M

Cash & Equiv.$276.8M

Net Cash$151.8M

4 min read

1. THE BIG PICTURE

Fastenal is evolving from a traditional parts distributor into a technology-integrated logistics partner, using onsite hardware to lock in large manufacturing clients. While this "stickiness" allows it to outgrow a sluggish industrial market, it forces a difficult trade-off: Fastenal is increasingly reliant on high-volume, lower-margin contract accounts that are more expensive to serve and harder to manage during sales volatility.

2. WHERE THE RISKS HIT HARDEST

Fastenal’s primary competitive advantage—its Physical Proximity and Onsite Service Model—is directly threatened by its lack of SG&A Leverage (Risks). Because the model relies on maintaining a large network of local branches and personnel to provide same-day access, these "occupancy and payroll" costs remain high even when demand softens. If sales growth slows, these fixed costs do not decline at the same rate, leading to immediate net income erosion.

Furthermore, the push into Exclusive Brands like Body Guard is threatened by Trade Policy and Tariffs (Risks). Fastenal sources a significant volume of these products from Asia, and the new tariffs enacted in 2025 create a fluid cost environment that could erase the margin benefits typically associated with private-label goods.

3. WHAT THE NUMBERS SAY TOGETHER

The financial data reveals a company successfully decoupling itself from a weak macro environment, but at a cost. In the fourth quarter of 2025, net sales grew 11.1%—outpacing the trailing twelve-month (TTMTTMTrailing Twelve Months — the most recent full year of financial data, updated on a rolling basis each quarter) growth of 8.7% (8-K, XBRL). This acceleration was driven by manufacturing "key accounts" where Fastenal’s managed inventory technology is most impactful. However, management notes that while these contract customers are growing, non-contract customers remain "sluggish," reflecting the broader industrial production trend (8-K).

This divergence suggests Fastenal is buying growth through complexity. While Fastenal maintains an exceptional 45.2% gross margin—ranking second in its peer group—the sustained shift toward non-fastener products and large contract accounts is creating "ongoing pressure" on this figure (Risks, XBRL). Short interest stands at 3.3% of the float, suggesting a segment of the market remains skeptical of Fastenal’s ability to maintain its premium valuation as its product mix shifts toward lower-margin categories (Yahoo Finance).

4. IS IT WORTH IT AT THIS PRICE?

Fastenal trades at a significant premium, with a 34.6x Forward P/EP/EPrice-to-Earnings ratio — share price divided by annual earnings per share; how much investors pay per dollar of profit. Higher P/E = higher growth expectations compared to the peer median of 23.0x (Peer Benchmarking). At this level, the market is pricing in approximately 6.4% long-term growth (CAPM analysis). While Fastenal’s 15.6% net margin and 12.1% FCFFCFFree Cash Flow — cash left after paying for operations and capital investments; what the company can actually spend, save, or return to shareholders margin are among the best in its peer group—trailing only ITW—the valuation leaves little room for error.

The current price is justified only if Fastenal can continue to gain market share through its FMI and Onsite initiatives without further eroding its operating margins. If long-term growth were to settle at a more modest 5.0%, the justified multiple would fall to 23.6x, representing a roughly 32% downside from current levels (CAPM analysis). Investors are currently paying a 50% premium over the peer median for Fastenal’s superior FCFFCFFree Cash Flow — cash left after paying for operations and capital investments; what the company can actually spend, save, or return to shareholders conversion and its ability to grow in a "sluggish" environment.

5. WHAT WOULD CHANGE THIS VIEW?

Cautious if the gross profit percentage continues to decline as non-fastener products and contract accounts become a larger portion of the total sales mix (Risks).
Constructive if Fastenal demonstrates SG&ASG&ASelling, General & Administrative expenses — operating costs not directly tied to making the product: salaries, marketing, rent, etc. leverage in upcoming quarters, proving that its investment in automated storage and retrieval systems (ASRS) and AI-driven inventory tools is successfully reducing the cost to serve local customers (Business).

6. BOTTOM LINE

Structural Advantage: High customer switching costs created by the physical integration of FMI technology (FASTBin and FASTVend) and Onsite personnel directly into client supply chains.

Bottom Line: Fastenal is a premier operator with a "sticky" business model, but its current valuation demands aggressive growth that may be difficult to sustain as its product mix shifts toward lower-margin categories.

Source: Synthesis · LLM Analysis

3 min read

1. Top 5 Material Risks

Product and Customer Mix: Fastenal has experienced a sustained shift toward non-fastener products and contract/Onsite accounts, which carry lower gross profit percentages than traditional fastener sales. This trend is expected to continue, creating ongoing pressure on the gross profit percentage.
SG&A Leverage: Fastenal’s ability to convert sales growth into higher net income depends on its capacity to leverage SG&ASG&ASelling, General & Administrative expenses — operating costs not directly tied to making the product: salaries, marketing, rent, etc. expenses. When demand slows, these costs—including payroll, occupancy, and freight—do not decline as quickly as net sales, which can lead to margin contraction.
Trade Policy and Tariffs: Fastenal sources a significant volume of products from Asia, particularly China. New and increased tariffs enacted in 2025 have created a fluid cost environment, threatening to increase the cost of goods sold and adversely impact operating profit margins.
Information Systems Disruption: Fastenal’s operations, including order processing, inventory management, and accounts receivable collection, are highly dependent on IT systems. A failure or cybersecurity incident could disrupt operations and cause unanticipated cost increases or sales decreases.
Competitive Pressure: The industrial supply industry is consolidating, leading to larger competitors with significant resources. Increased competition from both traditional brick-and-mortar and online retailers threatens to force price reductions and erode gross and operating income.

2. Company-Specific Risks

FMI Solution Dependency: Fastenal relies on a limited number of suppliers for the hardware and technology used in its FASTVend and FASTBin platforms; the loss of these suppliers could disrupt the deployment of these growth-driving tools.
Executive Transition: The upcoming transition of the chief executive officer role from Mr. Florness to Mr. Watts creates a risk of operational disruption if the change is not managed effectively.
Market Potential Estimates: Fastenal’s growth strategy is based on internal estimates of a $140 billion North American market and the potential for 1.7 million industrial vending devices; if these internal projections are inaccurate, Fastenal’s growth trajectory may be lower than anticipated.
Personnel Retention: Fastenal’s growth depends on attracting and retaining qualified branch and Onsite personnel; high industry turnover and competition for labor could force higher wage costs or delay expansion.

3. Regulatory/Legal Risks

Data Privacy Compliance: Fastenal is subject to complex data privacy regulations, including the California Consumer Privacy Act and the EU’s General Data Protection Regulation. Failure to comply with these evolving requirements could result in significant penalties and increased compliance costs.
Government Contracting: As a supplier to federal, state, and local government agencies, Fastenal must comply with specific procurement laws. Violations could lead to the loss of government contracts and damage to Fastenal’s reputation.
Litigation Exposure: Fastenal faces ongoing risks from product liability claims, commercial disputes, and potential securities class action litigation related to stock price volatility, all of which could increase operating expenses.

4. Financial Impact Map

Product/Customer Mix Shift → Gross Profit Percentage → Sustained decline due to higher proportion of lower-margin non-fastener and contract account sales.

SG&A Expense Growth → Net Income → Failure to leverage payroll, occupancy, and freight costs during sales slowdowns prevents conversion of growth into profit.

Tariffs and Trade Policy → Cost of Sales / Operating Profit → Increased duties on Asian-sourced parts directly impact the cost of goods and operating margins.

IT System Failure → Net Sales / Operating Expenses → Disruptions in order processing and inventory management lead to decreased sales and unanticipated recovery costs.

Competitive Pricing Pressure → Gross and Operating Income → Aggressive pricing strategies from online and traditional competitors threaten to erode profit margins.

Source: 10-K Item 1A · LLM Analysis

Recent Filings

Form	Filed	Period
14A	Feb 2026	—
10-K	Feb 2026	Dec 2025
8-K	Jan 2026	—
10-Q	Oct 2025	Sep 2025