Is Fastenal Co. overvalued or undervalued?

As of 7 July 2025, Fastenal Co. has moved from an expensive to a very expensive valuation grade. The company is currently overvalued, as indicated by its P/E ratio of 42, which is significantly higher than its peer Ferguson Plc at 28.08, and its EV to EBITDA ratio of 28.58, compared to W.W. Grainger, Inc. at 36.90. Additionally, the Price to Book Value stands at 13.08, suggesting a premium valuation relative to its assets.
In terms of peer comparison, Fastenal's P/E ratio of 46.51 is notably higher than both W.W. Grainger and Ferguson, reinforcing the notion of overvaluation. Despite a strong return of 31.33% year-to-date compared to the S&P 500's 12.22%, the long-term performance shows a stark contrast, with Fastenal's 10-year return of 114.44% lagging behind the S&P 500's 231.64%. This discrepancy further emphasizes the concern regarding its current valuation.