Using an unlevered Free Cash Flow to Firm (FCFF) model, we project Fastenal Company's cash flows over 5 years with line-by-line expense modeling. Revenue is projected revenue growing from 10.0% to 8.1% annually, with expenses (COGS, SG&A, R&D) held at historical ratios. Depreciation is computed from a vintage matrix based on a 5-year useful life. Working capital is modeled using historical turnover days (DSO 54, DPO 25, DIO 153). At a 8.9% WACC with mid-year discounting, the terminal value (87% of enterprise value) is derived by applying the industry peer median EV/EBITDA multiple of 19.3x to Year 6 EBITDA. After subtracting net debt, the equity value implies a fair price of $34.39 per share, suggesting FAST is overvalued by 24.2% at the current price of $45.40.
Adjust parameters to explore scenarios. Changes are for exploration only and do not affect saved valuations.
| 2026 | 2027 | 2028 | 2029 | 2030 | Terminal | |
|---|---|---|---|---|---|---|
| Profit Before Tax | 1,830 | 1,984 | 2,097 | 2,214 | 2,393 | 2,453 |
| (−) Net Interest | 12 | 13 | 14 | 15 | 16 | 17 |
| (+) D&A | 195 | 212 | 230 | 251 | 264 | 271 |
| EBITDA | 2,037 | 2,210 | 2,341 | 2,480 | 2,674 | 2,740 |
| (−) Tax | 438 | 475 | 502 | 530 | 573 | — |
| (−) CapEx | 243 | 263 | 278 | 293 | 317 | — |
| (−) ΔWC | 380 | 257 | 188 | 196 | 299 | — |
| Free Cash Flow (FCF) | 977 | 1,214 | 1,373 | 1,460 | 1,485 | — |
| Peers' EBITDA Multiple | 19.3x | |||||
| Terminal Value | 52,780 | |||||
| WACC / Discount Rate | 8.87% | |||||
| Timing of FCF (mid year) | 0.5 | 1.5 | 2.5 | 3.5 | 4.5 | 5 |
| Present Value of FCF | 936 | 1,069 | 1,110 | 1,085 | 1,013 | 34,513 |
| Enterprise Value | 39,726 | |||||
| Projection Period | 5,213 | 13.1% | ||||
| Terminal Value | 34,513 | 86.9% | ||||
| (−) Current Net Debt | 165 | |||||
| Equity Value | 39,561 | |||||
| (÷) Outstanding Shares | 1150M | |||||
| Fair Price | $34 | -24.2% | ||||
| WACC \ EV/EBITDA Exit Multiple | 15.3x | 17.3x | 19.3x | 21.3x | 23.3x |
|---|---|---|---|---|---|
| 6.9% | $31 | $34 | $38 | $41 | $44 |
| 7.9% | $29 | $33 | $36 | $39 | $42 |
| 8.9% | $28 | $31 | $34 | $38 | $41 |
| 9.9% | $27 | $30 | $33 | $36 | $39 |
| 10.9% | $26 | $29 | $32 | $34 | $37 |
Current price: $45.40. Green = undervalued, Red = overvalued.
Based on default parameters
This is an unlevered Free Cash Flow to Firm (FCFF) model with a 5-year projection period. Revenue, expenses, D&A, and working capital are projected using the same line-by-line approach as the Growth Exit models. The key difference is the terminal value methodology: instead of assuming perpetual cash flow growth, the terminal value is calculated by applying the industry peer median EV/EBITDA multiple to the projected Year 6 EBITDA.
Using a peer exit multiple anchors the terminal value to how the market currently prices comparable companies, rather than relying on a theoretical perpetual growth assumption. This approach captures relative valuation dynamics and is particularly useful when a company is expected to converge toward industry-average profitability over time. The sensitivity matrix shows how fair value changes across different WACC and EV/EBITDA multiple scenarios.