Is Fastenal Co. overvalued or undervalued?

As of 17 October 2025, the valuation grade for Fastenal Co. has moved from expensive to fair, indicating a shift in its perceived value. The company appears to be fairly valued based on its current metrics, despite its relatively high P/E ratio of 42, compared to peers like Ferguson Plc, which has a P/E of 28.08, and W.W. Grainger, Inc. at 52.61. Additionally, Fastenal's EV to EBITDA ratio stands at 28.58, while its EV to Sales ratio is 6.35, suggesting that while the company is not undervalued, it is not excessively overvalued either.
In terms of performance, Fastenal has shown a year-to-date return of 18.09%, outperforming the S&P 500's return of 13.30% for the same period. However, over longer periods, such as the 3-year and 5-year returns, Fastenal has lagged significantly behind the S&P 500, with returns of -7.90% and -6.19%, respectively. This mixed performance, along with its strong ROCE of 40.26% and ROE of 31.21%, suggests that while Fastenal is fairly valued, its long-term growth prospects may warrant closer scrutiny.