Fastenal (NASDAQ:FAST) stock is down today after releasing financial results for the second quarter of 2022. Today’s report appears to match with what analysts had expected, more or less. However, traders seem to have seen something they don’t like, pushing FAST stock lower.
Fastenal specializes in distributing industrial and construction supplies. With a $27 billion market capitalization, it’s a mainstay in the construction equipment business.
Today, however, Wall Street isn’t particularly pleased with the company. Sure, the U.S. Bureau of Labor Statistics just released a red-hot consumer price index (CPI) report, but the major stock market indices are only slightly red. Meanwhile, traders are dumping FAST stock.
The catalyst is easy to spot: Fastenal just disclosed Q2 financial results. On the surface, there’s not much to object to in the report. Fastenal grew revenue 18% year-over-year (YOY) to $1.78 billion. That’s practically in-line with the consensus estimate of $1.79 billion. Plus, the company’s $287.1 million in Q2 net earnings — or 50 cents per share — showed a nearly 20% YOY improvement. That result also matched Wall Street’s forecast of 50 cents per share.
What’s Happening With FAST Stock?
There’s really no other way to put it: FAST stock fell fast today. As of this writing, shares are down nearly 6% and testing the $47 level.
Why did investors react so negatively to the quarterly results? The answer is probably that, sometimes, good enough just isn’t good enough.
Fastenal’s results were barely in-line with analyst estimates. Moreover, the company maintained a “flat gross margin” in Q2. With that, Fastenal could be in a tough position amid rising inflation. With it possibly becoming more expensive to conduct business operations in Q3 compared to Q2, the company’s margins may soon decrease.
Perhaps, then, Fastenal is suffering from unfortunate timing, releasing quarterly data alongside a nasty inflation print. In time, however, FAST may be able to demonstrate resilience in this challenging macroeconomic environment.
On the date of publication, David Moadel did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
