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Fastenal (FAST) Down 8.7% Since Last Earnings Report: Can It Rebound?
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A month has gone by since the last earnings report for Fastenal (FAST - Free Report) . Shares have lost about 8.7% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Fastenal due for a breakout? 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 drivers.
Fastenal Q4 Earnings & Revenues Beat
Fastenal Company ended 2021 on a solid note. The company’s earnings and revenues not only beat the Zacks Consensus Estimate but also improved on a year-over-year basis, given strong demand for manufacturing and construction equipment and supplies along with higher pricing.
Earnings & Sales in Detail
The company reported earnings of 40 cents per share, which topped the consensus mark of 37 cents by 8.1% and grew 17.6% from the year-ago period.
Net sales totaled $1,531.8 million, beating the consensus mark of $1,507 million by 1.6% and increasing 12.8% from the year-ago figure of $1,358 million.
It reported daily sales of $24.7 million, reflecting an increase of 14.6% year over year. On a monthly basis, daily sales improved 16.5%, 13.2% and 14.1% in December, November and October, respectively, year over year.
Daily sales of Fastener products (mainly used for industrial production and accounting for approximately 33.5% of fourth-quarter sales) rose 24.2% year over year, backed by higher manufacturing and construction demand as well as increased pricing. Sales of safety products (accounting for 21.4% of fourth-quarter sales) grew 3.5% on a daily basis. The upside was mainly driven by solid growth and higher pricing for traditional manufacturing and construction clients. Sales of the remaining products (accounting for 45.1% of fourth-quarter sales) grew 12.8% year over year.
Vending Trends & Other Growth Drivers
Fastenal signed 274 new Onsite locations during 2021. As of Dec 31, 2021, the company had 1,416 active sites, up 11.9% from the year-ago period. Daily sales through Onsite locations (excluding sales transferred from branches to new Onsites) increased more than 20% from a year ago.
The company continues to expect 375-400 annual Onsite signings in 2022.
Daily sales through weighted FMI devices grew 47.7% for the fourth quarter and represented 35.1% of net sales.
Daily sales to national account customers (representing 57.8% of total quarterly revenues) increased 19.9% on a year-over-year basis for fourth-quarter 2021. Daily sales to non-national account customers (which include government customers and represent 42.2% of total quarterly revenues) rose 7.6% from the prior-year quarter.
Margins
Gross margin of 46.5% for the quarter improved 90 basis points or bps from the prior-year period. The improvement was driven by higher product margin related to safety products and overhead absorption/organizational cost leverage.
Also, operating margin improved 10 bps to 19.6% from the year-ago figure of 19.5%.
2021 Highlights
Net sales came in at $6,010.9 million, up 6.4% from the 2020 level. Earnings of $1.60 per share advanced 7.4% from 2020. Gross margin of 46.2% expanded 70 bps year over year.
Financials
Cash and cash equivalents were $236.2 million as of Dec 31, 2021, slightly down from $245.7 million on Dec 31, 2020. Long-term debt at quarter-end was $330 million, down from $365 million at 2020-end.
For 2021, cash provided by operating activities totaled $770.1 million compared with $1,101.8 million in the year-ago period.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended upward during the past month.
VGM Scores
At this time, Fastenal has an average Growth Score of C, however its Momentum Score is doing a bit better with a B. However, 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.
Outlook
Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. 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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Fastenal (FAST) Down 8.7% Since Last Earnings Report: Can It Rebound?
A month has gone by since the last earnings report for Fastenal (FAST - Free Report) . Shares have lost about 8.7% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Fastenal due for a breakout? 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 drivers.
Fastenal Q4 Earnings & Revenues Beat
Fastenal Company ended 2021 on a solid note. The company’s earnings and revenues not only beat the Zacks Consensus Estimate but also improved on a year-over-year basis, given strong demand for manufacturing and construction equipment and supplies along with higher pricing.
Earnings & Sales in Detail
The company reported earnings of 40 cents per share, which topped the consensus mark of 37 cents by 8.1% and grew 17.6% from the year-ago period.
Net sales totaled $1,531.8 million, beating the consensus mark of $1,507 million by 1.6% and increasing 12.8% from the year-ago figure of $1,358 million.
It reported daily sales of $24.7 million, reflecting an increase of 14.6% year over year. On a monthly basis, daily sales improved 16.5%, 13.2% and 14.1% in December, November and October, respectively, year over year.
Daily sales of Fastener products (mainly used for industrial production and accounting for approximately 33.5% of fourth-quarter sales) rose 24.2% year over year, backed by higher manufacturing and construction demand as well as increased pricing. Sales of safety products (accounting for 21.4% of fourth-quarter sales) grew 3.5% on a daily basis. The upside was mainly driven by solid growth and higher pricing for traditional manufacturing and construction clients. Sales of the remaining products (accounting for 45.1% of fourth-quarter sales) grew 12.8% year over year.
Vending Trends & Other Growth Drivers
Fastenal signed 274 new Onsite locations during 2021. As of Dec 31, 2021, the company had 1,416 active sites, up 11.9% from the year-ago period. Daily sales through Onsite locations (excluding sales transferred from branches to new Onsites) increased more than 20% from a year ago.
The company continues to expect 375-400 annual Onsite signings in 2022.
Daily sales through weighted FMI devices grew 47.7% for the fourth quarter and represented 35.1% of net sales.
Daily sales to national account customers (representing 57.8% of total quarterly revenues) increased 19.9% on a year-over-year basis for fourth-quarter 2021. Daily sales to non-national account customers (which include government customers and represent 42.2% of total quarterly revenues) rose 7.6% from the prior-year quarter.
Margins
Gross margin of 46.5% for the quarter improved 90 basis points or bps from the prior-year period. The improvement was driven by higher product margin related to safety products and overhead absorption/organizational cost leverage.
Also, operating margin improved 10 bps to 19.6% from the year-ago figure of 19.5%.
2021 Highlights
Net sales came in at $6,010.9 million, up 6.4% from the 2020 level. Earnings of $1.60 per share advanced 7.4% from 2020. Gross margin of 46.2% expanded 70 bps year over year.
Financials
Cash and cash equivalents were $236.2 million as of Dec 31, 2021, slightly down from $245.7 million on Dec 31, 2020. Long-term debt at quarter-end was $330 million, down from $365 million at 2020-end.
For 2021, cash provided by operating activities totaled $770.1 million compared with $1,101.8 million in the year-ago period.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended upward during the past month.
VGM Scores
At this time, Fastenal has an average Growth Score of C, however its Momentum Score is doing a bit better with a B. However, 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.
Outlook
Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. 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.