Is Fastenal Co. overvalued or undervalued?

As of 23 May 2025, the valuation grade for Fastenal Co. has moved from expensive to very expensive. The company is currently overvalued based on its elevated valuation metrics. Key ratios include a P/E ratio of 42, a Price to Book Value of 13.08, and an EV to EBITDA of 28.58, all of which are significantly higher than industry norms.
In comparison to peers, Fastenal's P/E ratio of 42 is lower than W.W. Grainger, Inc.'s 55.73 but higher than Ferguson Plc's 25.42, indicating a mixed positioning among competitors. The EV to EBITDA ratio of 28.58 also suggests that Fastenal is trading at a premium compared to Ferguson's 15.77. Additionally, while Fastenal has shown strong returns, outperforming the S&P 500 over the past year with a 26.42% return compared to the index's 10.26%, its current valuation does not justify the high price levels.