Value
3.6/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 3.5 |
| P/S | 7.2 |
| EV/EBITDA | 0.0 |
| Fwd P/E | 3.0 |
| PEG | 3.8 |
| Analyst target | 4.0 |
- ▸Forward P/E: 35.6x
- ▸PEG: 2.78
WDFC · Why this verdict
Why WD-40 (WDFC) is rated BUY WAIT
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
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VerdictBUY WAIT
Overall score6.5/10
ConfidenceMEDIUM
MacroNEUTRAL
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.
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. | ↑Improving |
| 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.
↑ImprovingOptions
- 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.
Per-dimension breakdown
Quality
8.2/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 10.0 |
| ROA | 10.0 |
| Gross margin | 7.2 |
| Op margin | 8.3 |
| Net margin | 6.6 |
| Current ratio | 9.0 |
| FCF quality | 5.8 |
| Moat | 8.2 |
| Piotroski F | 8.9 |
- ▸Excellent ROE: 33%
- ▸Earnings quality warning: 77% FCF/NI
- ▸Wide economic moat
- ▸Compounder quality: strong returns + growth
Growth
9.3/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 8.6 |
| EPS growth | 10.0 |
- ▸Strong growth: 24% YoY
Momentum
2.5/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 5.5 |
| MACD | 0.0 |
| OBV | 1.0 |
| MA position | 6.0 |
| Volume | 0.0 |
- ▸Volume distribution (falling OBV)
- ▸Above 200-day MA
Sentiment
6.7/10data confidence 100%| Component | Sub-score |
|---|---|
| Analyst rating | 6.8 |
| Price target | 7.4 |
| erm sentiment | 5.7 |
- ▸Light analyst coverage (3.0) — signal dampened
Insider
7.3/10data confidence 75%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 10.0 |
| notable moves | 7.0 |
- ▸No net insider activity — $0 (0.000% of mkt cap)
- ▸Institutions accumulating
Peer rank
6.7/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 1.5 |
| quality rank | 9.0 |
| growth rank | 8.3 |
- ▸Superior ROE vs peers
- ▸Best-in-class margins
Technical
8.2/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 9.4 |
| support resistance | 9.8 |
| 52w position | 5.5 |
Risk (lower is worse)
6.0/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 7.3 |
| days to cover | 7.7 |
| volatility | 0.0 |
| put call | 2.4 |
| implied vol | 6.5 |
| beta | 10.0 |
| debt equity | 8.4 |
- ▸Elevated put/call: 1.64
Catalyst
6.6/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 6.7 |
| earnings timing | 5.0 |
| surprise avg | 10.0 |
| dividend safety | 6.5 |
- ▸Strong earnings: 3B/1M
How the verdict was assembled
Engine trigger
Wide-moat business. Accumulate on weakness.
Engine technical detail
verdict_path:
L4:PATH_E_WIDE_MOAT|ENTRY_STICKY:PRIOR_STILL_VIABLEPassed (6)
- INSIDER:OK
- 8K:CLEAN
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:89d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (2)
- MOMENTUM:2.5<4.5
- ASYMMETRY:-0.0=NEGATIVE
Warning (0)
none
Reward-to-Risk
-0.02
Upside
-0.2%
Downside
10.3%
Sizing output
STARTER
Setup— — No clear chart pattern; technical signals are mixed
EdgeTemporary headwind — High quality (8.2) with weak momentum (2.5)
SuitabilityAggressive — MCap $3.1B<$5B
Investment implication
The STRONG_BUY_WAIT verdict reflects the MOMENTUM gate's 2.5<4.5 outcome against Growth at 9.3 and asymmetric R:R of -0.02.
The strongest dimensions are Growth at 9.3, Quality at 8.2, and Technical at 8.2; the weakest are Momentum at 2.5, Value at 3.6, and Risk (lower is worse) at 6.0. The V9 engine flagged 2 failed gates, producing an asymmetric reward-to-risk of -0.02 and an engine sizing output of STARTER.
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.