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Fastenal (FAST) Stock Sinks As Market Gains: What You Should Know

Zacks Equity Research
·3 mins read

In the latest trading session, Fastenal (FAST) closed at $46, marking a -0.45% move from the previous day. This change lagged the S&P 500's 0.8% gain on the day. Meanwhile, the Dow gained 0.43%, and the Nasdaq, a tech-heavy index, added 0.5%.

Wall Street will be looking for positivity from FAST as it approaches its next earnings report date. This is expected to be October 13, 2020. The company is expected to report EPS of $0.37, unchanged from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $1.41 billion, up 2.44% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $1.46 per share and revenue of $5.61 billion. These totals would mark changes of +5.8% and +5.21%, respectively, from last year.

It is also important to note the recent changes to analyst estimates for FAST. These recent revisions tend to reflect the evolving nature of short-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Within the past 30 days, our consensus EPS projection remained stagnant. FAST is currently sporting a Zacks Rank of #3 (Hold).

Valuation is also important, so investors should note that FAST has a Forward P/E ratio of 31.65 right now. For comparison, its industry has an average Forward P/E of 20.32, which means FAST is trading at a premium to the group.

Meanwhile, FAST's PEG ratio is currently 3.52. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. FAST's industry had an average PEG ratio of 1.2 as of yesterday's close.

The Building Products - Retail industry is part of the Retail-Wholesale sector. This group has a Zacks Industry Rank of 28, putting it in the top 12% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

You can find more information on all of these metrics, and much more, on Zacks.com.


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