Fastenal (FAST) Up 7.4% Since Last Earnings Report: Can It Continue?

It has been about a month since the last earnings report for Fastenal (FAST). Shares have added about 7.4% 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 latest earnings report in order to get a better handle on the important drivers.Fastenal Q2 Earnings & Sales Beat EstimatesFastenal’s second-quarter 2025 adjusted earnings and revenues came ahead of the Zacks Consensus Estimate and increased year over year.Second-quarter results reflect operational discipline, customer expansion and resilience despite broader macro sluggishness.Fastenal’s Earnings & Sales in DetailThe company reported earnings per share (EPS) of 29 cents, which beat the Zacks Consensus Estimate of 28 cents and grew 12.7% from the year-ago level of 25 cents per share.Net sales rose 8.6% year over year to $2.08 billion, topping the consensus mark of $2.06 billion. Daily sales also climbed 8.6%, driven primarily by improved customer contract momentum and increased unit sales. Growth came despite a sluggish industrial environment, as larger contract customers and key manufacturing accounts continued to drive incremental gains. Foreign exchange rates positively impacted sales by 10 basis points (bps).Fastenal's unit sales rose in the quarter, driven by more customer sites spending more than $10K per month and modest growth in average sales per site. Product pricing also contributed positively, adding 140–170 bps to net sales. Daily sales of Fasteners (mainly used for industrial production and accounting for approximately 30.5% of net sales) increased 6.6% year over year. Sales of Safety Supplies (22.2%) grew 10.7% daily. Sales of the Other Product Lines (47.3%) also increased 9% year over year.On an end-market basis, the daily sales rate of Heavy Manufacturing (which accounted for approximately 42.9% of net sales) rose 7.5% year over year. The daily sales rate of Other Manufacturing (33%) grew 11% compared with the prior year.Furthermore, the daily sales of Non-Residential Construction grew 3% compared with the prior-year quarter, while the same for Other End-Markets grew 8.7% in the same time frame.Daily sales through weighted FMI devices grew 14.4% for the second quarter, representing 44.1% of net sales. In the quarter, daily sales through eProcurement rose 19.3%, while daily sales via eCommerce declined 4.2%.In the second quarter of 2025, Digital Footprint sales (which include FMI technology and non-FMI eBusiness) accounted for 61% of total sales, up from 59.4% in the year-ago period. The company's revised 2025 target for Digital Footprint penetration is 63%–64%, down from the prior goal of 66-68%.Margin Discussion of FastenalThe gross margin was 45.3% in the reported quarter, up 20 bps year over year. This upside was due to increased fastener product availability, which resulted in higher sales and improved gross margin.Selling, general and administrative expenses – as a percentage of net sales – improved to 24.4% from 24.9% reported in the year-ago quarter. Operating margin was 21% (higher than our projection of 20.6%), up from 20.2% a year ago.Fastenal’s FinancialsAs of June 30, 2025, Fastenal had cash and cash equivalents of $237.8 million, down from $255.8 million as of Dec. 31, 2024. The long-term debt at the end of the second quarter of 2025 was $100 million, down from $125 million at 2024-end. During the quarter, Fastenal returned $252.5 million to its shareholders in the form of dividends.In the second quarter of 2025, net cash provided by operating activities totaled $278.6 million, up 8.1% from the year-ago period.How Have Estimates Been Moving Since Then?In the past month, investors have witnessed a upward trend in estimates review.VGM ScoresAt this time, Fastenal has a average Growth Score of C, though it is lagging a lot on the Momentum Score front with an F. Following the exact same course, the stock was allocated a grade of F on the value side, putting it in the bottom 20% quintile for this investment strategy.Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.OutlookEstimates have been 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.5 Stocks Set to DoubleEach was handpicked by a Zacks expert as the #1 favorite stock to gain +100% or more in the coming year. While not all picks can be winners, previous recommendations have soared +112%, +171%, +209% and +232%.Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.Today, See These 5 Potential Home Runs >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Fastenal Company (FAST): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks