WD-40 COMPANY (WDFC): what the price requires
At today's price, WD-40 COMPANY (WDFC) is priced for +24.7% growth. boothcheck doesn't publish a fair value or a price target; it shows what the price assumes, so you can judge whether that bar is too high.
Generated: 2026-07-14 · Exported: 2026-07-17 · Source: https://boothcheck.com/report/WDFC
Headline
| Field | Value |
|---|---|
| Ticker | WDFC |
| Company | WD-40 COMPANY |
| Current price | $249.45/sh |
What The Price Requires (Inversion)
The assumption today's price embeds, recovered by inverting the valuation.
| Field | Value |
|---|---|
| Inversion basis | whole-company |
| Operating margin needed | 11.4% |
| Operating margin today | 16.2% |
| Margin compression implied | -4.8pp |
| Implied growth | 24.7% |
| Multiple paid | 34x operating income |
The operating-margin requirement is derived from the framework's value band at year 12, a separately labeled basis from the headline growth/duration solve.
Solve inputs: computed at a 8.2% cost of capital with 4% terminal growth over a 5-year stage; each 1pp of cost of capital moves the implied operating-profit growth ~8.9pp.
Reconcile: at the x-ray's 9.3% required return this reads ~7 years; the models below use their own rates.
How unusual the bet is: high
| Reference | Value |
|---|---|
| vs own history | +4.07σ |
| cohort percentile (of 76 peers) | 86 |
| sustained it ~5 years at this level | 34% |
| implied end-window share | 0% |
Valuation X-Ray
Every valuation family lands below the price. The price therefore requires assumptions beyond what those standard frames encode.
How the valuation models price the stock relative to the market price. Price/FV above 1.0 means the market pays more than that lens defends (expensive); at or below 1.0 the lens can defend the price.
| Family | Median price/FV | Models | Reads |
|---|---|---|---|
| Asset | 3.90x | 5 | expensive |
| Earnings | 4.41x | 5 | expensive |
| Relative | 3.53x | 3 | expensive |
| Growth | 1.35x | 3 | expensive |
Families that call it expensive: Asset, Earnings, Relative
The models below discount at their own flat-beta convention rates (cost of equity 9.3%, WACC 9.0%); the inversion above states its own rate.
Per-Model Detail (n=16)
| Model | Family | FV | Price/FV | Applicable | Methodology |
|---|---|---|---|---|---|
| DCF Perpetual Growth | Growth | $119.65 | 2.08x | yes | FCF base $0.1B, growth 4% (input: historical growth), terminal g 4.0%, WACC 9.0%, 5yr projection |
| DCF Exit Multiple | Growth | $212.25 | 1.18x | yes | Exit EV/EBITDA: 30.0x / 32.0x / 34.0x (bear / base = today's held flat / bull), 5yr |
| Relative Valuation | Relative | $127.36 | 1.96x | yes | P/E 22.44x (blended: static sector reference 14x + trailing (TTM) 42x), scenarios: 18.8x / 22.4x / 26.1x (bear / base = reference held flat / bull), EV/EBITDA 15.21x |
| Simple DDM | Growth | — | — | no | — |
| Two-Stage DDM | Growth | — | — | no | — |
| Simple Excess Return | Asset | $64.02 | 3.90x | yes | BV/sh $19.91, ROE (TTM) 29.7%, ke 9.3% |
| Two-Stage Excess Return | Asset | $118.27 | 2.11x | yes | 5yr excess ROE then converge to ke=9.3% |
| Discounted Future Market Cap | Growth | $184.46 | 1.35x | yes | Rev $0.6B, growth 4% (input: historical growth; tapered), Terminal P/S: 4.4x / 5.3x / 6.2x (bear / base = today's held flat / bull, cap 8x) |
| Growth-Adjusted P/E | Relative | — | — | no | — |
| Margin Trajectory | Growth | — | — | no | — |
| Earnings Power Value | Earnings | $55.49 | 4.50x | yes | Normalized EBIT (5y avg op income, one-time charges added back) $0.09B × (1−21%) / WACC 9.0% → EPV (no growth) |
| Residual Income | Asset | $97.48 | 2.56x | yes | BV $19.91 + 5yr PV of (ROE (TTM) 29.7% − Kₑ 9.3%) × BV; BV grows 8.8%/yr |
| Graham Number | Asset | $51.37 | 4.86x | yes | √(22.5 × EPS $5.89 × BVPS $19.91) — Graham's conservative floor |
| EV/EBITDA Relative | Relative | $58.90 | 4.24x | yes | EBITDA $0.11B × sector EV/EBITDA 8.0x |
| FCF Yield | Earnings | $62.82 | 3.97x | yes | FCF $84.1M / Kₑ 9.3% — zero-growth perpetuity |
| SBC-Adj FCF Yield | Earnings | $56.57 | 4.41x | yes | SBC-adj FCF $0.08B (FCF $0.08B − SBC $0.01B) capitalized at Kₑ |
| Ben Graham Formula | Earnings | $26.41 | 9.45x | yes | EPS $5.89 × (8.5 + 2×-1.6%) × (4.4 / 5.3%) |
| ROIC-Justified P/B | Asset | $13.91 | 17.93x | yes | BV $19.91 × (ROIC 6.3% / WACC 9.0%) |
| P/Sales Sector | Relative | $70.68 | 3.53x | yes | Revenue $0.64B × sector P/S 1.5x |
| PEG Fair Value | Relative | — | — | no | — |
| Earnings Yield | Earnings | $63.68 | 3.92x | yes | EPS $5.89 / required return 9.3% (Rf 4.3% + ERP 5.0%) |
| Funds From Operations Multiple | Relative | — | — | no | — |
| Clinical Phase NPV | Growth | — | — | no | — |
| Merton | Asset | — | — | no | — |
| V5 Mechanical | — | — | — | no | — |
Solvency
| Field | Value |
|---|---|
| Net debt | $50.9m |
| Net debt / NOPAT (after-tax) | 0.65x |
| Net debt / operating income (pre-tax) | 0.51x |
| Interest coverage | 31.1x |
| Share count CAGR (buyback) | -0.4% |
| Burning cash | no |
Bullet Takeaways
- WD-40 is effectively a one-brand company, with maintenance products now 97% of revenue, and it runs that brand at a gross margin of 55.6%, the kind of pricing power that comes from a household name with no real substitute on the shelf.
- The biggest risk is the price, not the business: at $228 no family of valuation method reaches the stock, so the premium rests on the brand compounding at a pace well above what a mature consumer-products company normally sustains.
- What to watch is whether growth holds against an elevated multiple: the company grew second-quarter sales 11% and reaffirmed full-year guidance for net sales of $630 to $655 million and diluted EPS of $5.75 to $6.15.
Bull Case
The most revealing thing about WD-40 is what management does with the cash, because a single-brand company that throws off this much margin has to allocate capital with discipline or it drifts. The company has chosen to concentrate rather than diversify. Maintenance products are now 97% of revenue, and the strategy is explicitly to push the WD-40 Multi-Use Product and WD-40 Specialist lines while pulling back on advertising and promotion for lower-priority brands, a deliberate focus the company describes as its four-by-four strategic framework. That focus is a capital-allocation statement: spend behind the brand that earns the highest return and let the rest fade.
The economics that focus produces are what justify the market's regard. Gross margin reached 55.6% in the second quarter, a level that says the blue-and-yellow can commands a price its cost base does not require. WD-40 has the rare consumer-products quality of being cheap in absolute dollars but having no close substitute in the user's mind, which lets the company raise price and hold volume. The 10-K describes exactly that dynamic: after price increases, volume recovered as customers adjusted, and that recovery continued into the most recent fiscal year, lifting sales period over period. A brand that can take price and keep its volume is the textbook definition of pricing power.
The growth engine is geographic breadth on top of that pricing. Second-quarter sales rose 11%, with maintenance products up 13%, and the strength was broad-based across the Americas, the combined Europe-India-Middle East-Africa region, and Asia-Pacific. For a brand most associated with a single market, the runway is the rest of the world, where the product is under-penetrated and the same focus strategy can be replayed. Management reaffirmed full-year guidance for net sales of $630 to $655 million, operating income of $103 to $110 million, and diluted EPS of $5.75 to $6.15, and the balance sheet is pristine, carrying only a modest net debt position with operating earnings covering interest dozens of times over. This is a clean compounder that returns its cash and grows a beloved brand into new markets.
Bear Case
The honest bear case starts with the cycle this kind of business runs, because WD-40's recent strength is partly a recovery, not a new baseline. The 10-K is explicit that the higher sales of the last two fiscal years reflect a volume recovery after customers absorbed earlier price increases. That is a one-time normalization, not a permanent acceleration. A mature consumer brand that grows by taking price and then watching volume recover to the prior trend is not a structural double-digit grower; it is a low-single-digit volume business with periodic pricing resets. The second-quarter growth of 11% flattered by foreign-exchange and pricing should be read against the constant-currency maintenance-product figure of 6%, which is a truer picture of the underlying demand.
The structural vulnerability is concentration at both ends. On the product side, the company is now 97% one category, so there is no diversification to cushion a stumble in the core. On the customer side, WD-40 sells through retailers and distributors, and the company warns that customer strategies such as shelf simplification, discontinuing product offerings, or shifting shelf space to competitors could reduce its sales. A brand this dependent on physical retail placement is exposed to the buying decisions of a concentrated set of large customers, and the rise of private-label and competing maintenance sprays gives those customers leverage. Input costs add a margin wobble, since the product is petroleum-derived and the cost base moves with chemical and freight prices the company does not control.
The valuation is where the bear case becomes hard to wave away, because the price sits above every method. At $228 the asset-value methods, the earnings-power methods, the peer multiples, and even the forward-growth methods all land below the price, several at a quarter to a third of it. The earnings-power lens, which capitalizes today's profit with no growth, reads the price at roughly four times what current earnings support. When no standard frame reaches the quote, the market is paying for the brand to grow operating income at better than 20% a year and to keep doing it, a pace far above what a mature household-products company has historically sustained. The quality of the brand is not in dispute. What is in dispute is whether a low-to-mid single digit organic grower deserves a price that requires compounding several times that fast.
Valuation
WD-40's valuation is best read as the market paying a steep premium for brand durability, and the inversion makes the size of that premium concrete: at today's price the business has to grow operating income at better than 20% a year, a rate that sits far above the low-to-mid single digit organic growth a mature consumer brand normally delivers. The company earns operating margins around 16.5% today, and the price assumes both growth and margin keep climbing.
What distinguishes this name is that no family of method reaches the price. The asset-value methods, built off book value and the return spread, land well below it. The earnings-power lens, capitalizing current profit with no growth, sits at roughly a quarter of the price, a reflection of how much of the quote is future growth rather than present earnings. Peer multiples land around half the price or less, and even the forward-growth methods, which credit continued compounding, fall short. That is the signature of a price that embeds a scenario beyond what any conventional frame supports. It is not a contradiction in the methods; it is the market assigning a durability premium to a brand it believes will compound longer and more reliably than the cohort, isolated here so a buyer can weigh it directly rather than have it buried in an average.
The balance sheet removes any solvency question and lets the debate stay where it belongs, on growth. WD-40 carries only a small net debt position, under half of trailing operating income, with operating earnings covering interest dozens of times over. There is no fragility to compound a slowdown; a disappointing growth year would compress the multiple, not threaten the company. The decisive judgment for the value is therefore singular and clean: the brand is genuinely excellent and the margins are genuinely high, but the price is not asking whether the business is good. It is asking whether a beloved but mature single-brand company can grow several times faster than its history, for years, and that is the bet a buyer at this price is making.
Catalysts
The second-quarter fiscal 2026 report, released in April, was the most recent catalyst, and it was a solid operational quarter that the market received cautiously given the valuation. Net sales rose 11% to $161.7 million, maintenance products grew 13%, gross margin expanded to 55.6%, and operating income increased 13% to $26.3 million, with GAAP and non-GAAP EPS of $1.50. The growth was broad-based across the Americas, the Europe-India-Middle East-Africa region, and Asia-Pacific, consistent with the geographic expansion strategy. Management reaffirmed full-year guidance for net sales of $630 to $655 million, gross margin of 55.5 to 56.5%, operating income of $103 to $110 million, and diluted EPS of $5.75 to $6.15.
The forward catalysts are about whether the growth justifies the multiple. The constant-currency growth rate, the trajectory of maintenance-product volume in the international segments, and gross margin against petroleum-derived input costs are the variables to watch each quarter. Because the price already embeds an aggressive growth assumption, the more important catalyst risk is to the downside: any quarter where reaffirmed guidance is trimmed, or where volume growth slows beneath the pricing, would weigh heavily on a stock priced for sustained high-rate compounding. The next earnings report is the test of whether the broad-based momentum holds.
Peer Cohorts (Per Segment, With Filing Citations)
EIMEA (reported)
- NEU (NEWMARKET CORPORATION)
- (no filing in the citation store)
- IOSP (INNOSPEC INC.)
- (no filing in the citation store)
- FUL (FULLER H B CO)
- (no filing in the citation store)
- SMG (Scotts Miracle-Gro Co)
- (no filing in the citation store)
- CSW (CSW INDUSTRIALS, INC.)
- (no filing in the citation store)
- BCPC (Balchem Corp)
- (no filing in the citation store)
- AVNT (AVIENT CORPORATION)
- (no filing in the citation store)
- SXT (Sensient Technologies Corp)
- (no filing in the citation store)
Methodology Note
- Priced-in inversion: the valuation is inverted on the current price to recover the operating-income growth, duration, and steady-state margin the price embeds (ROE for financials, FFO growth for REITs).
- Valuation x-ray: the valuation models, grouped into four families (asset, earnings, relative, growth). Each model is expressed as a price/FV ratio (distance from price), not a point fair-value estimate. The spread across families is the disagreement.
- Solvency: net cash/debt, net-debt-to-NOPAT, interest coverage, and share-count CAGR from EDGAR financials (net debt / FFO and fixed-charge coverage for REITs; regulatory-capital framing for financials).
- Peer cohorts: per-segment comparables with deep-linkable SEC filing citations.
Fundamentals sourced from SEC EDGAR filings. Current price from Databento. The priced-in inversion and valuation x-ray are computed by the boothcheck engine; narrative composed by AI from the structured data.
Sources
Q2 FY2026 earnings release, April 2026 · FY2025 10-K, accession 0000105132-25-000067