Fastenal : Growth Trends, Challenges & Key Investment Insights

Key Points

• Fastenal is a leading supplier of industrial manufacturing and construction parts and safety tools and equipment.
• Fastenal stands apart from competitors by installing Onsite locations within their customers' facilities to improve customization and inventories.
• The Company is targeting 28,000 to 30,000 MEUs of FASTBin and FASTVend device signing in 2025.

Fastenal Inc. NASDAQ: FAST is a leading supplier of construction and industrial supplies, including fasteners, bolts, screws, studs, washers, as well as safety supplies and tools for maintenance repair and operations (MRO) products. Muted industrial manufacturing and construction activity amid an uncertain macroeconomic backdrop resulted in a semi-kitchen sink in the fourth quarter of 2024.

Despite the soft results and tough competition from peers like W.W. Grainger Inc. NYSE: GWW and MSC Industrial Direct Co. NYSE: MSM, the retail/wholesale sector stock has remained resilient, trading up nearly 4% in 2025. With Trump in the White House pounding the table on a new “Golden Age” where America’s manufacturing and construction industries will experience a renaissance, could now be the time to buy into shares?

On-site Locations Continue to Grow

Fastenal has been growing its network of on-site locations. In the fourth quarter of 2024, the company signed 56 new on-site locations, a key differentiating factor from its competitors as it establishes a presence directly near a customer's facility. Fastenal has a strong presence in Los Angeles and could be instrumental in the infrastructure rebuilding efforts after the catastrophic wildfires.

For the full year 2025, Fastenal signed 358 on-site locations, which was shy of its 375 to 400 target but still a 10% YoY jump. On-site locations are dedicated Fastenal branches located within a customer’s facility, like a mini Fastenal store within a customer’s operations. This enables them to customize inventory specifically for the customer and cater directly to their needs.

Fastenal CEO Dan Florness stressed the importance of on-site locations in the Q4 conference call, commenting, “The average customer site spends about $38,000 per month, and the number of 10,000 customer sites has increased by about 9% a year since 2017. Thanks to the strength of our on-site program, there is a subset of this group that has grown even faster. The customer sites where spend is at least $50,000 per month. Since 2017, revenue through this subset of customer sites has grown at a compound annual growth rate of 18%.”

The Q4 Slowdown Was a Disappointment But Not the End All

Fastenal indicated a bottom in Q3 but just as momentum started to return, it was cut off at the knees in Q4 as uncertainty elevated over sharp production cuts in the first two weeks in December. The company reported Q4 2024 EPS of 46 cents, missing estimates by 2 cents. Revenues still rose 3.9% YoY to $1.82 billion, falling shy of the $1.84 billion consensus estimates.

FASTBin and FASTVend Are Growth Drivers to Watch

Fastenal signed 6,790 weighted FASTBin and FASTVend devices in Q4. FASTBin involves bins, locked, and drawers outfitted with infrared or RFID sensors to track inventory levels and automate the reordering of supplies when they run low. FASTVend uses vending machines to dispense items like fasteners and tools, which allow for controlled access and simpler automated tracking of usage. Increasing the adoption of these is a key growth driver. The goal for weighted FASTBin and FASTVend signings in 2025 is between 28,000 to 30,000 MEUs.

FAST Stock Is in a Symmetrical Triangle Pattern

A symmetrical triangle forms when a descending upper trendline meets an ascending lower trendline, converging at the apex. A breakout happens when the price rises above the upper resistance, and a breakdown occurs when it falls below the lower resistance level. These moves become more likely as the triangle narrows toward its apex point.

FAST formed the upper descending trendline resistance at $77.72 and the lower ascending trendline support at $70.67. As the shares neared the apex, they bounced off the anchored daily VWAP at $74.21, signaling renewed momentum. The daily RSI is flat at the 51-band. Fibonacci (Fib) pullback support levels are at $73.71, $70.67, $69.37, and $66.30.

FAST stock’s average consensus price target is 2.85% higher at $76.91, and its highest analyst price target sits at $88.00. It has one analyst's Buy rating, eight Holds, and two Sell Ratings. The stock has a 2.31% short interest.

Bullish investors can consider using cash-secured puts at the Fib pullback support levels to buy the dip. If assigned the shares, then writing covered calls at upside Fib levels executes a wheel strategy for income in addition to the 2.30% dividend.