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Why Is Fastenal (FAST) Up 9.7% Since Last Earnings Report?

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It has been about a month since the last earnings report for Fastenal (FAST). Shares have added about 9.7% in that time frame, outperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is Fastenal due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.

Fastenal Q3 Earnings Beat, Margins Up on Solid Demand

Fastenal Company reported impressive third-quarter 2021 results. Both the top and bottom lines not only beat the Zacks Consensus Estimate but also improved on a year-over-year basis.

The company witnessed strong demand for manufacturing and construction equipment and supplies, and an uptick in sales of certain COVID-19-related products. However, slower growth or contraction in sales of certain COVID-19-related products in few end markets limited the growth. Also, product pricing affected net sales by 230-260 basis points (bps) during the quarter. It continues to experience pressure related to product and transportation cost inflation.

Earnings & Sales in Detail

The company reported earnings of 42 cents per share, which topped the consensus mark of 41 cents by 2.4% and grew 9.7% from the year-ago period.

Net sales totaled $1.554 billion, beating the consensus mark of $1.538 billion by more than 1% and increasing 10% from the year-ago figure of $1.413 billion.

The company reported daily sales of $24.3 million, reflecting an increase of 10% year over year. On a monthly basis, daily sales improved 11.1%, 9% and 9.7% for September, August and July, respectively, year over year.

Daily sales of Fastener products (mainly used for industrial production and accounting for approximately 33.4% of third-quarter sales) rose 20.2% year over year backed by higher manufacturing and construction demand. Sales of safety products (accounting for 21.1% of second-quarter sales) declined 2.9% on a daily basis. The downside was mainly due to the absence of surge-related PPE sales, partly offset by improvements in manufacturing and construction demand. Sales of the remaining products (accounting for 45.5% of third-quarter sales) grew 9.2% year over year.

Vending Trends & Other Growth Drivers

Fastenal signed 230 new Onsite locations during the first nine months of 2021. As of Sep 30, 2021, the company had 1,367 active sites, up 10.6% from the year-ago period. Daily sales through Onsite locations (excluding sales transferred from branches to new Onsites) increased more than 20% in the reported quarter from a year ago.

Based on the year-to-date signings and presumption of historically lower signings for fourth quarters, the company expects signing 285-325 Onsite locations in 2021, down from its prior expectation of 300-350.
Daily sales through weighted FMI devices grew 45% in the third-quarter and represented 33% of net sales.

Daily sales to national account customers (representing 56.6% of total revenues) increased 16.89% on a year-over-year basis in third-quarter 2021. Daily sales to non-national account customers (which include government customers and represent 43.4% of total revenues) rose 2.2%.


Gross margin of 46.3% in the quarter improved 100 bps from the prior-year period. The improvement was driven by favorable product and customer mix, overhead/organizational leverage, improved product margins, and lower rebates. Also, the operating margin remained in line with the year-ago figure of 20.5%.


Cash and cash equivalents were $250.5 million as of Sep 30, 2021, up from $245.7 million on Dec 31, 2020. Long-term debt at quarter-end was $330 million, down from $365 million at 2020-end.

In the first nine months of 2021, cash provided by operating activities totaled $613.7 million compared with $780.8 million in the year-ago period.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed an upward trend in estimates revision.

VGM Scores

Currently, Fastenal has an average Growth Score of C, though it is lagging a bit on the Momentum Score front with a D. Following the exact same course, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.

Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.


Estimates have been broadly trending upward for the stock, and the magnitude of these revisions has been net zero. It comes with little surprise Fastenal has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.

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