Wholesale industrial and construction materials distributor Fastenal (FAST) witnessed a substantial improvement in demand in the second quarter of 2021. However, given that the company’s top- and bottom-line performance continue to be negatively affected by rising inflationary pressure, is the stock worth betting on now? Read on.Fastenal Company (NASDAQ:FAST) is involved in the wholesale distribution of non-residential construction and industrial supplies in the United States, Canada, Mexico, and worldwide. Stronger demand from manufacturing and non-residential construction markets, thanks to an increase in economic activity in the second quarter, helped improve the company’s operational results in its last reported quarter. Its shares have soared 12.8% in price year-to-date and 4.3% over the past three months. FAST is based in Winona, Minn.
Although FAST’s growing digital footprint, which represented 41.7% of its sales in the second quarter, and improved demand from onsite customers bode well for the stock, its valuation at its current share price level could be concerning.
In addition, while President Biden's bipartisan infrastructure deal could boost FAST’s construction parts and equipment-related sales, growing inflationary pressure and a reduction in its national account sales and government customers could hamper its growth.