Fastenal (FAST) stock trades at 43.3 times earnings. The S&P 500 trades at 22.9. Shareholders are clearly paying a premium for a company that keeps growing. Management says its key account strategy mainly drove the latest quarter. These large customers generally carry lower gross margins. Fastenal has not yet shown that it can keep winning those accounts without wearing down the profit it makes on each sale.

How Far Has Fastenal’s Gross Margin Slipped?

The decline is less than one percentage point over two years, but the figure has dropped annually. Fastenal retained 45.5% of its sales as gross profit in the twelve months to June 2024. That metric slipped to 45.1% a year later. In the twelve months to June 2026, the…