Value
3.1/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 2.9 |
| P/S | 6.8 |
| EV/EBITDA | 0.0 |
| Fwd P/E | 2.9 |
| PEG | 2.9 |
| Analyst target | 3.0 |
- ▸Forward P/E: 38.2x
- ▸PEG: 4.26
WDFC · Why this verdict
Why WD-40 (WDFC) is rated SELL
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
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VerdictSELL
Overall score5.3/10
ConfidenceMEDIUM
MacroNEUTRAL
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
WD-40 has beaten EPS estimates in 3 of the last 4 quarters with an average positive surprise of 24%, and the earnings report in 23 days creates a near-term catalyst event where the recent beat pattern could either extend or disappoint given the overbought price level. Earnings | The upcoming earnings report delivers a positive EPS surprise above 5% and beat streak extends to 4 of the last 5 quarters. | →Stable |
| CounterThe one miss in the prior 4 quarters was a -11.4% negative surprise, suggesting the business can disappoint; with the stock at overbought levels, a miss would likely produce an outsized negative price reaction. | ||
WD-40 holds a moat score of 8.2 and return on equity of 31% with a Piotroski F-Score of 9 out of 9 — a perfect score — indicating a business with durable competitive advantages, consistent financial improvement, and strong returns on capital over an extended period. Quality breakdown | Piotroski F-Score remains at 9 out of 9 and return on equity stays above 25% over the next 12 months. | →Stable |
| CounterWD-40's high moat score reflects brand strength in a narrow niche; the company is a specialty chemical distributor with limited growth avenues, and the moat does not protect against secular shifts in industrial maintenance spending. | ||
WD-40 trades at a forward P/E of 35.5x with a PEG of 4.26, placing it in expensive valuation territory relative to its growth rate, and with RSI at 75 the stock is in overbought technical conditions that have historically preceded near-term pullbacks. Valuation breakdown | RSI falls below 60 and forward P/E compresses below 28x through a combination of earnings growth and modest price consolidation within 12 months. | →Stable |
| CounterPremium-quality consumer and specialty chemical brands routinely trade at 30x+ forward earnings; the valuation may be justified by the durable pricing power and low capital intensity of the WD-40 franchise. | ||
WD-40's put/call ratio of 1.83 indicates defensive options positioning ahead of the earnings event, consistent with investors hedging against downside risk at a fully valued stock trading in overbought territory. Options | Put/call ratio falls below 1.0 within 3 months of the earnings event as the outcome resolves the near-term uncertainty. | →Stable |
| CounterA put/call ratio of 1.83 is elevated but not extreme; it may simply reflect standard hedging by long holders of an illiquid small-cap stock approaching a catalyst event rather than genuine directional bearish conviction. | ||
WD-40 has beaten EPS estimates in 3 of the last 4 quarters with an average positive surprise of 24%, and the earnings report in 23 days creates a near-term catalyst event where the recent beat pattern could either extend or disappoint given the overbought price level.
→StableEarnings
- Expectation
- The upcoming earnings report delivers a positive EPS surprise above 5% and beat streak extends to 4 of the last 5 quarters.
CounterThe one miss in the prior 4 quarters was a -11.4% negative surprise, suggesting the business can disappoint; with the stock at overbought levels, a miss would likely produce an outsized negative price reaction.
WD-40 holds a moat score of 8.2 and return on equity of 31% with a Piotroski F-Score of 9 out of 9 — a perfect score — indicating a business with durable competitive advantages, consistent financial improvement, and strong returns on capital over an extended period.
→StableQuality breakdown
- Expectation
- Piotroski F-Score remains at 9 out of 9 and return on equity stays above 25% over the next 12 months.
CounterWD-40's high moat score reflects brand strength in a narrow niche; the company is a specialty chemical distributor with limited growth avenues, and the moat does not protect against secular shifts in industrial maintenance spending.
WD-40 trades at a forward P/E of 35.5x with a PEG of 4.26, placing it in expensive valuation territory relative to its growth rate, and with RSI at 75 the stock is in overbought technical conditions that have historically preceded near-term pullbacks.
→StableValuation breakdown
- Expectation
- RSI falls below 60 and forward P/E compresses below 28x through a combination of earnings growth and modest price consolidation within 12 months.
CounterPremium-quality consumer and specialty chemical brands routinely trade at 30x+ forward earnings; the valuation may be justified by the durable pricing power and low capital intensity of the WD-40 franchise.
WD-40's put/call ratio of 1.83 indicates defensive options positioning ahead of the earnings event, consistent with investors hedging against downside risk at a fully valued stock trading in overbought territory.
→StableOptions
- Expectation
- Put/call ratio falls below 1.0 within 3 months of the earnings event as the outcome resolves the near-term uncertainty.
CounterA put/call ratio of 1.83 is elevated but not extreme; it may simply reflect standard hedging by long holders of an illiquid small-cap stock approaching a catalyst event rather than genuine directional bearish conviction.
TrendMatrix Research · core thesis
Engine thesis — one sentence
WD-40 Company is a high-quality compounder with a Piotroski F-Score of 9 out of 9, a 31% return on equity, and a wide economic moat, and has beaten earnings in 3 of the last 4 quarters, but trades at an expensive forward P/E of 35.5x with RSI at 75 indicating overbought conditions and an earnings report due in 23 days.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Per-dimension breakdown
Quality
8.1/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 10.0 |
| ROA | 9.4 |
| Gross margin | 7.1 |
| Op margin | 6.5 |
| Net margin | 6.3 |
| Current ratio | 9.5 |
| FCF quality | 6.1 |
| Moat | 8.2 |
| Piotroski F | 10.0 |
- ▸Excellent ROE: 31%
- ▸Wide economic moat
- ▸Compounder quality: strong returns + growth
- ▸Strong Piotroski F-Score: 9/9
Growth
4.5/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 5.2 |
| EPS growth | 3.8 |
Momentum
6.0/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 4.3 |
| MACD | 10.0 |
| OBV | 5.8 |
| MA position | 9.0 |
| Volume | 1.1 |
- ▸Overbought (RSI 74)
- ▸Above 200-day MA
Sentiment
5.9/10data confidence 100%| Component | Sub-score |
|---|---|
| Analyst rating | 6.8 |
| Price target | 5.5 |
| erm sentiment | 5.0 |
- ▸Light analyst coverage (3.0) — signal dampened
Insider
5.0/10data confidence 50%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 5.1 |
- ▸No net insider activity — $0 (0.000% of mkt cap)
Peer rank
4.5/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 1.3 |
| quality rank | 8.8 |
| growth rank | 7.8 |
- ▸Superior ROE vs peers
- ▸Best-in-class margins
Technical
4.1/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 2.1 |
| support resistance | 0.6 |
| 52w position | 9.6 |
Risk (lower is worse)
5.5/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 6.9 |
| days to cover | 6.7 |
| volatility | 5.8 |
| put call | 0.0 |
| implied vol | 1.1 |
| beta | 10.0 |
| debt equity | 8.3 |
- ▸Elevated put/call: 3.00
- ▸High IV: 74%
Catalyst
6.4/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 6.7 |
| earnings timing | 5.0 |
| surprise avg | 10.0 |
| dividend safety | 5.5 |
- ▸Strong earnings: 3B/1M
- ▸Earnings in 4 days
- ▸Dividend: 166.0%
How the verdict was assembled
Engine trigger
Multiple concerning factors. Consider reducing position.
Engine technical detail
verdict_path:
L4:PATH_F_SELLPassed (6)
- MOMENTUM:6.0>=5.5
- INSIDER:OK
- 8K:CLEAN
- NEWS_EVENTS:NONE_RECENT
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (2)
- ASYMMETRY:-0.8=NEGATIVE
- EARNINGS_PROXIMITY:4d<=7d
Warning (0)
none
Reward-to-Risk
-0.81
Upside
-12.2%
Downside
15.0%
Sizing output
AVOID
Setup— — No clear chart pattern; technical signals are mixed
EdgeNo clear edge — No clear edge identified
SuitabilityAggressive — MCap $3.3B<$5B
Investment implication
The F-path SELL output reflects an overall score of 5.3 below the 5.6 soft trigger — multiple weakening dimensions accumulated rather than a single hard-floor breach. The strongest dimension ( Quality at 8.1) was not enough to lift the adjusted overall above the threshold. Co-occurring failed gates ( ASYMMETRY:-0.8=NEGATIVE, EARNINGS_PROXIMITY:4d<=7d) reinforce the read. Current asymmetry R:R is -0.81 — supplementary context, not the trigger for this path.
The strongest dimensions are Quality at 8.1, Catalyst at 6.4, and Momentum at 6.0; the weakest are Value at 3.1, Technical at 4.1, and Peer rank at 4.5. The V9 engine flagged 2 failed gates, producing an asymmetric reward-to-risk of -0.81 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Wide Moat Compounder Quality
Trip ifPiotroski F-Score drops below 7 out of 9 or return on equity falls below 20%, indicating fundamental quality deterioration.
- P2Overbought Expensive Valuation
Trip ifForward P/E rises above 45x without a corresponding increase in earnings growth forecasts, indicating further valuation expansion beyond already-elevated levels.
- P3Earnings Beat Streak Near Term Catalyst
Trip ifEPS falls below $1.20 in the upcoming quarter, more than 14% below the consensus estimate of $1.41.
- P4Elevated Put Call Options Concern
Trip ifPut/call ratio rises above 3.0, more than 60% above the current 1.83, indicating increasing hedging pressure ahead of the earnings event.