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US Equities · Finance research note

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2. Company Fundamentals

2.1 Competitiveness

Metric Value
Operating Margins 20.33%
Profit Margins 15.39%
Return on Equity 33.84%
Return on Assets 21.2%
Free Float 1.14B
Dividend Yield 1.95%
Short Int % Utilisation 2.83%

2.2 Growth

Metric Value
Revenue Growth 12.4%
Free Cash Flow 0.9B
EBITDA 28.05 (Ratio)
Enterprise Value 52.98B
EV/Revenue 6.28
EV/EBITDA 28.05

Revenue growth of 12.4% indicates steady, moderate expansion.

2.3 Management

Role Metric
Consensus Rating N/A

2.4 Return

Metric Value
Expected Return (Ann.)* 10.27%
Risk / Std Dev (Ann.)* 25.64%
1-Year Price Return* 6.65%

Latest Market Data (as of 2026-08-14, US Eastern time):

Metric Value
Last Price $51.02
52-Week Range $38.97 – $52.92
Observation Count 251 trading days

The return and risk statistics use daily adjusted closes from the retrieved one-year series and annualise daily moments using 252 trading days. The last price is the latest regular-market price reported for the stated date. Source: Yahoo Finance market data.

DuPont Model Analysis

The DuPont model decomposes return on equity (ROE) into three operating and capital-structure drivers:

ROE = Net Margin × Asset Turnover × Equity Multiplier

The comparison uses the latest two comparable annual periods available for the issuer, with reported statement amounts shown in US$. Revenue and net income are income-statement flows; total assets and shareholders’ equity are year-end balance-sheet figures. This is a simplified year-end-balance DuPont comparison rather than an average-balance ROE calculation.

DuPont component Calculation FY2025 FY2024
Revenue Reported revenue $8.20B $7.55B
Net income Reported net income $1.26B $1.15B
Total assets Year-end reported balance $5.05B $4.70B
Shareholders’ equity Year-end reported balance $3.94B $3.62B
Net margin Net income ÷ revenue 15.35% 15.25%
Asset turnover Revenue ÷ total assets 1.6229x 1.6062x
Equity multiplier Total assets ÷ shareholders’ equity 1.2813x 1.2991x
ROE Net margin × asset turnover × equity multiplier 31.91% 31.82%

Source: Yahoo Finance annual statements. Values are based on the two latest comparable annual periods returned by the source; fiscal period labels use the statement period-end year.

2.5 FCFF DCF Valuation

Valuation basis: This research model follows a five-year, unlevered FCFF DCF. It starts from reported annual operating inputs, forecasts revenue and operating cash conversion under an explicit mechanical policy, discounts FCFF at WACC, applies a Gordon-growth terminal value, and bridges enterprise value to an indicative common-equity value per share. It is an analytical estimate rather than a recommendation or personalised target price.

Step 1 — Forecast Operating Profit and NOPAT

Reported operating input Value
Revenue $8.20B
Prior annual revenue $7.55B
EBIT $1.66B
Tax rate 24.00%
NOPAT = EBIT × (1 − tax rate) $1.26B
Forecast start-growth basis 8.67%
Forecast policy latest reported annual revenue growth, bounded to -10.00% / 15.00%

Step 2 — Calculate FCFF

Current FCFF building block Value
NOPAT $1.26B
Add: depreciation & amortisation $179.20M
Less: capital expenditure -$245.30M
Less/(add): working-capital cash-flow movement -$150.00M
Current unlevered FCFF $1.05B

Explicit FCFF forecast

Forecast year Revenue growth NOPAT D&A Capex Change in NWC FCFF Present value
1 8.67% $1.37B $194.74M -$266.58M -$163.01M $1.14B $1.09B
2 7.13% $1.47B $208.63M -$266.34M -$174.63M $1.24B $1.09B
3 5.59% $1.55B $220.28M -$260.91M -$184.39M $1.33B $1.08B
4 4.04% $1.61B $229.19M -$250.33M -$191.84M $1.40B $1.05B
5 2.50% $1.66B $234.92M -$234.92M -$196.64M $1.46B $1.01B

Step 3 — Determine the Discount Rate (WACC)

WACC input Value
Risk-free rate 4.71%
Equity risk premium assumption 5.50%
Beta 0.71
Cost of equity 8.63%
Pre-tax cost of debt 1.34%
WACC 8.57%
WACC validation within standard range

Step 4 — Estimate Terminal Value

Terminal-value input Value
Perpetuity growth rate 2.50%
Terminal value $24.62B
Implied terminal EV / EBITDA 10.21x
Terminal value as % of enterprise value 75.40%

Step 5 — Discount Cash Flows to Enterprise Value

Enterprise-value component Value
Present value of explicit FCFF $5.32B
Present value of terminal value $16.32B
Indicated enterprise value $21.65B
Discounting convention mid-year for explicit FCFF; terminal value discounted at year-end five

Step 6 — Convert Enterprise Value to Equity Value

Equity bridge Value
Indicated enterprise value $21.65B
Less: gross interest-bearing debt $441.90M
Add: cash and equivalents $276.80M
Add: affiliate investments $0.00
Less: minority interests $0.00
Indicated common equity value $21.48B

Step 7 — Calculate Indicative Value Per Share

Per-share output Value
Shares used 1,150,300,000.00
Share-count basis reported diluted weighted-average shares
Current market price $51.34
DCF indicative value per share $18.67
Indicative value vs. market price -63.63%

Model Integrity Checks

Check Result
Perpetuity growth is below the risk-free rate pass
Perpetuity growth is below WACC pass
WACC is within the configured operating-company range pass
Terminal-year FCFF is positive pass
Terminal capex converges to D&A pass
Terminal-value concentration within review band
Implied price differs from spot by more than 30% review required

2.6 Investor-Style Research Screen

Educational screen Result
Buffett-inspired cash-quality checks 3/4 evidenced checks
Lynch-inspired balance-and-growth checks 4/4 evidenced checks

Data lineage: Yahoo Finance public market and reported-statement data; retrieval timestamp: 2026-08-18 17:33:11.408285 UTC; latest reported fiscal period: 2025-12-31 00:00:00. Default assumptions: five-year forecast, mid-year discounting for explicit FCFF, a maximum 2.50% perpetuity-growth rate below both WACC and the risk-free rate, historical operating-ratio persistence, and capex convergence to D&A by year five. No sell-side consensus or management guidance is substituted for reported inputs. This is research and analysis only, not personalized financial advice.

2.7 Quantitative Factor Diagnostics

Model basis: Daily issuer USD excess returns are regressed in-sample using ordinary least squares on matching regional Fama–French factors. FF3 estimates market, size, and value loadings; FF5 adds profitability and investment. Coefficients are descriptive historical exposures, not predictions.

Estimation input Value
Regional factor set US
Factor-return currency USD
Issuer-return basis USD adjusted total return
Estimation window 2025-08-19 to 2026-06-30
Aligned daily observations 217
Minimum observation requirement 120
Currency conversion for HK listings not required

Fama–French Three-Factor and Five-Factor Results

Diagnostic FF3 FF5
Annualised alpha -26.76% -17.75%
Adjusted R² 0.22 0.26
Annualised residual volatility 22.54% 21.77%
Factor loading (t-statistic) FF3 FF5
Market excess return (Mkt-RF) 0.76 (5.75) 1.02 (6.93)
Size (SMB) 0.25 (1.39) 0.17 (0.92)
Value (HML) 0.83 (5.38) 0.46 (2.51)
Profitability (RMW) NM 0.34 (2.14)
Investment (CMA) NM 0.73 (2.70)

Definitions: Mkt-RF is the market return less the risk-free rate; SMB is small minus big; HML is high minus low book-to-market; RMW is robust minus weak profitability; CMA is conservative minus aggressive investment. Factor returns are sourced from the Kenneth R. French Data Library; issuer adjusted-return history is sourced from Yahoo Finance. For Hong Kong listings, adjusted HKD prices are converted into USD with daily USD/HKD closes before return calculation to match the USD regional factor basis. This is an in-sample historical regression; coefficients and t-statistics do not establish causation or predict future returns. This is research and analysis only, not personalized financial advice.

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