2 Reasons to Avoid FAST and 1 Stock to Buy Instead

Over the past six months, Fastenal’s shares (currently trading at $45.22) have posted a disappointing 7.5% loss while the S&P 500 was down 1%. This was partly driven by its softer quarterly results and might have investors contemplating their next move.

Is now the time to buy Fastenal, or should you be careful about including it in your portfolio? Check out our in-depth research report to see what our analysts have to say, it’s free.

Why Is Fastenal Not Exciting?

Despite the more favorable entry price, we're cautious about Fastenal. Here are two reasons we avoid FAST and a stock we'd rather own.

1. Lackluster Revenue Growth

Long-term growth is the most important, but within industrials, a stretched historical view may miss new industry trends or demand cycles. Fastenal’s recent performance shows its demand has slowed as its annualized revenue growth of 5.7% over the last two years was below its five-year trend. We’re wary when companies in the sector see decelerations in revenue growth, as it could signal changing consumer tastes aided by low switching costs.

2. Recent EPS Growth Below Our Standards

Although long-term earnings trends give us the big picture, we like to analyze EPS over a shorter period to see if we are missing a change in the business.

Fastenal’s unimpressive 4.4% annual EPS growth over the last two years aligns with its revenue trend. This tells us it maintained its per-share profitability as it expanded.

Final Judgment

Fastenal’s business quality ultimately falls short of our standards. After the recent drawdown, the stock trades at 36.9× forward P/E (or $45.22 per share). At this valuation, there’s a lot of good news priced in - we think there are better opportunities elsewhere. Let us point you toward one of our top digital advertising picks.

Stocks We Like More Than Fastenal

ONE MORE THING: Top 5 Growth Stocks. The biggest stock winners almost always had one thing in common before they ran. Revenue growing like crazy. Meta. CrowdStrike. Broadcom. Our AI flagged all three. They returned 315%, 314%, and 455%, respectively.

Find out which 5 stocks it's flagging for this month — FREE. Get Our Top 5 Growth Stocks for Free HERE.

Stocks that have made our list include now familiar names such as Nvidia (+1,326% between June 2020 and June 2025) as well as under-the-radar businesses like the once-micro-cap company Kadant (+351% five-year return). Find your next big winner with StockStory today.