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Fastenal Company

Intrinsic Value Analysis (Discounted Cash Flow)Industry: Industrial - DistributionSector: Industrials

Fair Value Summary

Current Price$42.34
5Y Range13.37 – 20.33
5Y Selected16.85
(-) Safety Margin24.97%
5Y Buy Price$12.64
Upside (to Buy Price)-70.14%
10Y Range15.08 – 22.46
10Y Selected18.77
(-) Safety Margin24.97%
10Y Buy Price$14.08
Upside (to Buy Price)-66.74%

Company Predictability & Safety

MetricValue
Revenue R2 (5Y)0.9426
Revenue R2 (10Y)0.9819
Net Income R2 (5Y)0.8993
Net Income R2 (10Y)0.9707
EBITDA R2 (5Y)0.8679
EBITDA R2 (10Y)0.9670
FCF R2 (5Y)0.1946
FCF R2 (10Y)0.7335
Safety Score0.7503

DA 10-Year Projection

Metric2025202620272028202920302031203220332034
% Growth7.19%6.84%6.48%6.13%5.77%5.42%5.06%4.71%4.35%4.00%
Revenue8,088.808,641.949,202.249,766.2310,330.1310,889.9411,441.4411,980.2912,502.0113,002.09
EBITDA1,816.001,940.182,065.972,192.592,319.192,444.872,568.692,689.672,806.802,919.07
D&A-211.60-226.07-240.73-255.48-270.23-284.88-299.30-313.40-327.05-340.13
EBIT1,604.401,714.111,825.251,937.112,048.962,160.002,269.392,376.272,479.752,578.94
Pro forma Taxes-427.13-456.34-485.93-515.71-545.49-575.05-604.17-632.63-660.18-686.58
NOPAT1,177.261,257.771,339.321,421.401,503.471,584.951,665.221,743.641,819.571,892.36
Capital Expenditures-257.59-275.21-293.05-311.01-328.97-346.80-364.36-381.52-398.14-414.06
NWC Investment-172.22-175.50-177.77-178.94-178.91-177.62-174.98-170.96-165.53-158.67
(+) D&A211.60226.07240.73255.48270.23284.88299.30313.40327.05340.13
Free Cash Flow959.051,033.131,109.221,186.931,265.821,345.411,425.181,504.561,582.961,659.76
Diluted Shares Outstanding1,149,950,000.001,149,950,000.001,149,950,000.001,149,950,000.001,149,950,000.001,149,950,000.001,149,950,000.001,149,950,000.001,149,950,000.001,149,950,000.00

Discounting Periods

MetricDec-25Dec-26Dec-27Dec-28Dec-29Dec-30Dec-31Dec-32Dec-33Dec-34
Period Start9/30/251/1/261/1/271/1/281/1/291/1/301/1/311/1/321/1/331/1/34
Period End12/31/2512/31/2612/31/2712/31/2812/31/2912/31/3012/31/3112/31/3212/31/3312/31/34
Mid-Point11/15/257/2/267/2/277/1/287/2/297/2/307/2/317/1/327/2/337/2/34
Time (t)0.100.451.452.463.464.465.466.467.468.46
Valuation Date1/17/26

Base Case Projected Flows

WACC: 9.10%Terminal Growth: 2.49%
Metric2025202620272028202920302031203220332034TV (5y)TV (10y)
Discount Factor0.990.960.880.810.740.680.620.570.520.48
PV UFCF950.74993.43977.65958.07936.54912.41885.91857.26826.71794.54
Raw: 19,635.86
13,908.99
Raw: 25,746.79
11,800.07

Base Case Valuation

5-Year Horizon10-Year Horizon
UFCFUFCF
Enterprise Value18,725.4120,893.33
(-) Net Debt257.55257.55
Equity Value18,467.8620,635.78
(/) Shares Out1,149.951,149.95
Fair Value$16.06$17.94
(-) Safety Margin24.97%24.97%
Buy Price$12.05$13.46
Current Price$42.34$42.34
Upside (to Buy Price)-71.54%-68.20%

Conservative Projected Flows

WACC: 10.10%Terminal Growth: 1.99%
Metric2025202620272028202920302031203220332034TV (5y)TV (10y)
Discount Factor0.990.960.870.790.720.650.590.540.490.44
PV UFCF949.87989.36964.80936.80907.43876.03842.86808.19772.31735.51
Raw: 15,924.68
10,879.88
Raw: 20,880.65
8,818.61

Conservative Valuation

5-Year Horizon10-Year Horizon
UFCFUFCF
Enterprise Value15,628.1517,601.78
(-) Net Debt257.55257.55
Equity Value15,370.6017,344.23
(/) Shares Out1,149.951,149.95
Fair Value$13.37$15.08
(-) Safety Margin24.97%24.97%
Buy Price$10.03$11.32
Current Price$42.34$42.34
Upside (to Buy Price)-76.31%-73.27%

Aggressive Projected Flows

WACC: 8.10%Terminal Growth: 2.99%
Metric2025202620272028202920302031203220332034TV (5y)TV (10y)
Discount Factor0.990.970.890.830.760.710.650.600.560.52
PV UFCF951.61997.55990.79980.02966.86950.67931.59909.80885.50858.91
Raw: 25,527.07
18,753.53
Raw: 33,471.42
16,659.73

Aggressive Valuation

5-Year Horizon10-Year Horizon
UFCFUFCF
Enterprise Value23,640.3626,083.02
(-) Net Debt257.55257.55
Equity Value23,382.8125,825.47
(/) Shares Out1,149.951,149.95
Fair Value$20.33$22.46
(-) Safety Margin24.97%24.97%
Buy Price$15.26$16.85
Current Price$42.34$42.34
Upside (to Buy Price)-63.97%-60.20%

Reverse DCF: Market Implied Growth

Current Price$42.34
WACC Used9.1%
IMPLIED REVENUE GROWTH148.93%
Metric2027202820292030203120322033203420352036
Implied Revenue19,907.8449,555.74123,357.02307,067.44764,370.021,902,714.044,736,345.7811,789,985.7329,348,314.0873,055,520.12
Constant Implied Growth148.93%148.93%148.93%148.93%148.93%148.93%148.93%148.93%148.93%148.93%
Implied Free Cash Flow1.994.9612.3430.7176.44190.27473.631,179.002,934.837,305.55
Discount Factor0.930.810.740.680.620.570.520.480.440.40
Present Value of Implied FCF1.854.009.1320.8247.51108.41247.36564.401,287.762,938.25

Rolling Historical DCF (Backtest)

Valuation based on actual realized growth.
YearValuation DateActual PriceRealized Growth (5Y)Calculated Fair ValueValuation Delta
20192019-12-31$18.487.89%$10.65-42.40%
20182018-12-31$13.088.55%$9.15-30.08%
20172017-12-31$13.687.94%$8.30-39.35%
20162016-12-31$11.757.64%$5.64-52.01%
20152015-12-31$10.219.24%$7.32-28.30%
20142014-12-31$11.899.08%$5.83-50.94%
20132013-12-31$11.887.72%$3.76-68.36%
20122012-12-31$11.666.98%$4.50-61.40%
20112011-12-31$10.916.87%$2.65-75.72%
20102010-12-31$7.498.69%$3.22-57.03%
20092009-12-31$5.2111.63%$5.403.66%
20082008-12-31$4.3614.13%$3.85-11.62%
20072007-12-31$5.069.63%$3.30-34.79%
20062006-12-31$4.496.08%$0.35-92.31%
20052005-12-31$4.894.47%$0.89-81.74%
20042004-12-31$3.857.78%$0.11-97.14%
20032003-12-31$3.1116.19%$1.03-66.91%
20022002-12-31$2.3418.57%$-0.66-128.06%
20012001-12-31$2.0818.23%$1.27-38.98%
20002000-12-31$1.7215.63%$0.06-96.31%
19991999-12-31$1.4112.10%$0.37-73.65%
19981998-12-31$1.3811.75%$0.12-91.08%
19971997-12-31$1.2014.70%$-0.34-127.99%
19961996-12-31$1.4318.35%$-0.37-126.00%
19951995-12-31$1.3223.31%$-0.05-103.99%

Monte Carlo Simulation (1,000 Iterations)

Mean Fair Value
$18.44
Median
$18.02
10th Percentile
$15.03
90th Percentile
$22.30

Fair Value Distribution

$11.72 - $13.39
9
$13.39 - $15.06
92
$15.06 - $16.73
214
$16.73 - $18.40
237
$18.40 - $20.07
215
$20.07 - $21.74
117
$21.74 - $23.41
50
$23.41 - $25.09
32
$25.09 - $26.76
16
$26.76 - $28.43
9
$28.43 - $30.10
1
$30.10 - $31.77
2
$31.77 - $33.44
4
$33.44 - $35.11
0
$35.11 - $36.78
1
$36.78 - $38.45
0
$38.45 - $40.12
0
$40.12 - $41.79
0
$41.79 - $43.47
0
$43.47 - $45.14
1