About FASTENAL CO
Fastenal Company, together with its subsidiaries, engages in the wholesale distribution of industrial and construction supplies in the United States, Canada, Mexico, North America, and internationally. It offers fasteners, and related industrial and construction supplies under the Fastenal name. The company's fastener products include threaded fasteners, bolts, nuts, screws, studs, and related washers, which are used in manufactured products and construction projects, as well as in the maintenance and repair of machines. It also offers miscellaneous supplies and hardware, including pins, machinery keys, concrete anchors, metal framing systems, wire ropes, strut products, rivets, and related accessories.
The company serves the manufacturing market comprising original equipment manufacturers; maintenance, repair, and operations; and non-residential construction market, which includes general, electrical, plumbing, sheet metal, and road contractors. It also serves farmers, truckers, railroads, mining companies, schools, and retail trades; and oil exploration, production, and refinement companies, as well as federal, state, and local governmental entities. The company distributes its products through a network of 3,209 in-market locations and 15 distribution centers. Fastenal Company was founded in 1967 and is headquartered in Winona, Minnesota.
FAST operates in the Retail Trade | Retail | headquartered in WINONA, Minnesota | approximately 22,400 employees | led by CEO Daniel L. Florness.
The $56.3B question: What happens when a company this good becomes this expensive?
The American consumer has always been a fickle beast — spending freely in good times and retreating in bad. FASTENAL CO has spent decades learning to read those moods, and right now, the reading is surprisingly sanguine.
At $56.3B in market capitalization, FASTENAL CO (FAST) currently ranks #11 in our quantitative model, with a composite score of 79.9/100. That places it firmly in "Strong Buy" territory — our highest conviction rating.
But here's the thing about stocks priced for perfection: They leave no room for error.
The Numbers That Matter
Let's start with what's undeniably true. Our 6-factor model gives FAST the following scores:
| Factor | Score | Weight | Assessment |
|---|---|---|---|
| Quality | 95/100 | 30% | Exceptional |
| Value | 71/100 | 15% | Fair |
| Momentum | 65/100 | 25% | Steady |
| Investment | 78/100 | 10% | Growing |
| Stability | 83/100 | 10% | Fortress |
| Short Interest | 10/100 | 10% | High shorts |
The quality score of 95/100 is the headline here. It reflects profitability metrics that would make most CFOs weep with envy:
- ROE: 33.6%
- Net Margin: 15.7%
- Gross Margin: 45.3%
These aren't just good numbers. They're the kind of numbers that make FAST a "must-own" stock for institutional portfolios.
The Bull Case
"If you could design a business in a laboratory, it would look something like FAST."
The bull case writes itself:
- Quality is persistent. Academic research shows high-quality stocks outperform by 4-6% annually over long periods. FAST is quality defined.
- Momentum is real. With a momentum score of 65/100, the stock has been recognized by the market — and momentum tends to persist.
- The moat is deep. Companies with these margins don't lose them easily. The competitive position is entrenched.
The Bear Case
But here's what keeps value investors up at night:
- Valuation compression risk. At current levels, the stock is priced for continued perfection. Any stumble — a missed quarter, a competitive threat, a macro slowdown — could compress the multiple from 45.9x to the low 20s. That's a 20-30% decline without anything fundamentally "wrong."
- The crowded trade problem. When everyone owns a stock, who's left to buy? Momentum works until it doesn't.
- Mean reversion. Trees don't grow to the sky. At some point, growth decelerates.
The Valuation Framework
| Scenario | Assumption | Fair Value | Upside/Downside |
|---|---|---|---|
| Bear | Multiple compression to 20x | -20% | Downside |
| Base | Current trajectory continues | +10-15% | Modest upside |
| Bull | Momentum accelerates | +30-40% | Significant upside |
The risk-reward is ... fine. Not exceptional. Not terrible. Just fine.
The Bottom Line
FASTENAL CO is exactly what it appears to be: a high-quality business with strong momentum trading at a premium price. Whether that's attractive depends entirely on what kind of investor you are.
For long-term, buy-and-hold investors, FAST is a core holding. For value investors or short-term traders, look elsewhere.
The company is priced for perfection — and in markets, as in life, perfection is a fragile thing.
⭐⭐⭐⭐⭐ Rating: 5-Star Strong Buy
Score: 79.9/100 | Rank: #11 of 3,571 stocks
Sector: Consumer Discretionary
This analysis reflects the views of Blank Capital Research as of February 16, 2026. It is not investment advice. Past performance does not guarantee future results.
