WDFC - WD-40: Oiling Up For Growth Sticking Points On Valuation

2024-06-23 13:56:08 ET

Summary

• WD-40 Company owns multiple household maintenance and cleaning brands, with WD-40 being the most famous.
• Historical financial performance shows consistent growth in revenues and EBITDA, outperforming the S&P 500 on a total return basis.
• Recent financial results for Q2 were mediocre, with a focus on steady growth in maintenance products and 'premiumized' products for long-term growth.
• Despite a positive guidance outlook, the long-term targets in sales growth and margin expansion aren't enough to justify the current valuation.

Introduction

WD-40 Company ( WDFC ) has been an exceptional compounder over time, delivering impressive long-term returns to shareholders. With a high quality business model of manufacturing and selling household maintenance and cleaning products, it's hard to think of a more defensible business that's unlikely to be disrupted any time soon....

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