WD-40 Company (WDFC) | Investment Case

1. Company Snapshot

1.a. Company Description

WD-40 Company develops and sells maintenance products, and homecare and cleaning products in the Americas, Europe, the Middle East, Africa, and the Asia Pacific.The company provides multi-purpose maintenance products that include aerosol sprays, non-aerosol trigger sprays, and in liquid-bulk form products under the WD-40 Multi-Use brand name; and specialty maintenance products, such as penetrants, degreasers, corrosion inhibitors, greases, lubricants, and rust removers under the WD-40 Specialist brand, as well as various products under the WD-40 Bike brand name.It also offers multi-purpose and specialty drip oils, and spray lubricant products, as well as other specialty maintenance products under the 3-IN-ONE brand name; and professional spray maintenance products and lubricants for the bike market under the GT85 brand name.

In addition, the company provides automatic toilet bowl cleaners under the 2000 Flushes brand name; aerosol and liquid trigger carpet stain and odor eliminators under the Spot Shot brand; room and rug deodorizers under the Carpet Fresh brand name; carpet and household cleaners, and rug and room deodorizers under the 1001 brand; heavy-duty hand cleaner products under the Lava brand name in the United States, as well as under the Solvol brand name in Australia; and automatic toilet bowl cleaners under the X-14 brand name.It sells its products primarily through warehouse club stores, hardware stores, automotive parts outlets, industrial distributors and suppliers, mass retail and home center stores, value retailers, grocery stores, online retailers, farm supply, sport retailers, and independent bike dealers.The company was founded in 1953 and is headquartered in San Diego, California.

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1.b. Last Insights on WDFC

WD-40 Company's recent performance faced negative drivers, including divestiture of its UK homecare and cleaning businesses, which may impact revenue growth. Although Q4 revenue grew 4.8% to $163.5 million, beating expectations, the company's decision to sell its 1001 and 1001 Carpet Fresh brands to Supreme Imports Ltd may weigh on future sales. Additionally, managing oil cost pressures and global expansion into new markets, such as Dubai and Thailand, present challenges. The company declared a quarterly dividend of $0.94 per share, providing returns to shareholders.

1.c. Company Highlights

Last Price	191.14
Change Percentage	-1.10%
Open	194.41
Previous Close	193.27
Market Cap ( Millions)	2586
Volume	51579
Year High	278.1
Year Low	187.4
M A 50	195.97
M A 200	220.76

FCF Yield	3.14%
Dividend Yield	1.97%
ROE	36.63%
Debt / Equity	3.44%
Net Debt / EBIDTA	-44.50%
Price To Book	9.65
Price Earnings Ratio	28.43
Price To FCF	31.86
Price To sales	4.17
EV / EBITDA	23.08

2. WD-40's Fiscal Year 2025: A Year of Resilience and Growth

WD-40 Company reported consolidated net sales of $163 million for the fourth quarter and $620 million for the full fiscal year, reflecting approximately 5% growth compared to the prior year. The company's maintenance products, which account for approximately 95% of total net sales, reached $156 million in Q4 and $591 million for the year, with 6% year-over-year growth. Gross margin continues to improve, surpassing the target of 55%, with a full fiscal year gross margin of 55.1% and a Q4 gross margin of 54.7%. The actual EPS came out at $5.50, in line with expectations. Pro forma net sales were $603 million, a 6% increase over 2024 results.

Publication Date: Oct -23

                                    📋 Highlights
                                    Fiscal Year 2025 Sales Growth:
                                                Consolidated net sales reached $620 million (5% YoY), with Q4 sales at $163 million.
Core Product Performance:
                                                Maintenance products (95% of revenue) grew 6% YoY to $591 million, driven by WD-40 Multi-Use Product ($478 million, +6%) and WD-40 Specialist ($82 million, +11%).
Gross Margin Expansion:
                                                Full-year gross margin hit 55.1% (exceeding 55% target), with Q4 margin at 54.7%, supported by lower chemical costs and pricing.
Regional Growth Variance:
                                                Asia Pacific surged 28% to $23 million (driven by 44% growth in distributor markets), while Americas declined 2% to $77 million.
2026 Outlook:
                                                Anticipates 5–9% sales growth to $630–$655 million, gross margin of 55.5–56.5%, and operating income of $103–$110 million.

                                

Segmental Performance

The Americas segment saw a 2% decrease in sales to $77 million, driven by lower sales in Latin America, while EMEA sales grew 7% to $63 million, driven by higher sales volumes of WD-40 Multi-Use Product in direct markets. Asia Pacific sales grew 28% to $23 million, driven by a 44% increase in sales of WD-40 Multi-Use Products in distributor markets. As Steven A. Brass noted, there is a long runway for growth in the Asia Pacific region, citing strong performance in China, Australia, and Indonesia.

Strategic Progress

The company made strategic progress against its 4x4 framework, with global sales of WD-40 Multi-Use Product growing 6% to $478 million, and premiumized products accounting for approximately 50% of WD-40 Multi-Use Product sales. WD-40 Specialist sales grew 11% to $82 million, and e-commerce sales increased 10%. The company will introduce a new bio-based format of its multi-use product in select European markets later this fiscal year.

Outlook and Valuation

For fiscal year 2026, the company expects net sales growth of 5-9%, with net sales between $630 and $655 million, and gross margin between 55.5-56.5%. Operating income is expected to be between $103 and $110 million, and diluted EPS is expected to be between $5.75 and $6.15. With a P/E Ratio of 29.89 and an EV/EBITDA of 24.31, the market is pricing in a certain level of growth and profitability. Analysts estimate next year's revenue growth at 5.1%, which is within the company's guidance range.

Return on Capital and Dividend Yield

The company's ROIC is 24.83%, and ROE is 36.63%, indicating a strong ability to generate returns on capital. The Dividend Yield is 1.87%, which is a relatively attractive yield for investors seeking income. With a plan to fully utilize the remaining authorization, the company will continue to prioritize returning capital to investors through dividends and buybacks.

3. NewsRoom

Creative Planning Has $1.88 Million Holdings in WD-40 Company $WDFC

Nov -27

Source: defenseworld.net

Ethic Inc. Makes New $255,000 Investment in WD-40 Company $WDFC

Oct -31

Source: defenseworld.net

WD-40 CEO reveals strategy for oil costs and global expansion

Oct -24

Source: youtube.com

WD-40: A Stable And Reliable Grower

Oct -23

Source: seekingalpha.com

WD-40 Company (WDFC) Q4 2025 Earnings Call Transcript

Oct -23

Source: seekingalpha.com

WD-40 Company Declares Regular Quarterly Dividend

Oct -10

Source: businesswire.com

WD-40 Company Schedules Fourth Quarter and Full Fiscal Year 2025 Earnings Conference Call

Oct -01

Source: businesswire.com

D.A. Davidson Advises WD-40 Company on the Sale of its U.K. Homecare and Cleaning Businesses to Supreme Imports Ltd

Sep -15

Source: businesswire.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (4.50%)

6. Segments

Maintenance Products

Expected Growth: 4.5%

Growing demand for maintenance products driven by increasing industrial and automotive applications, coupled with WD-40 Company's diversified product portfolio and strong brand recognition, is expected to drive segment growth.

Homecare and Cleaning Products

Expected Growth: 4.5%

Growing demand for cleaning and disinfecting products, increasing awareness of health and hygiene, and expansion into new markets drive the growth of WD-40 Company's Homecare and Cleaning Products segment.

7. Detailed Products

WD-40 Multi-Use Product

A penetrating oil that loosens stuck parts, protects tools from rust and corrosion, and displaces moisture.

3-IN-ONE Multi-Purpose Oil

A multi-purpose oil that lubricates, penetrates, and protects surfaces.

Spot Shot Instant Carpet Stain Remover

A carpet stain remover that instantly removes tough stains and odors.

1001 Troubleshooter & Lubricant

A lubricant that loosens stuck parts, reduces friction, and protects surfaces.

Lava Heavy-Duty Hand Cleaner

A heavy-duty hand cleaner that removes tough grease and grime.

X-14 Mildew Stain Remover

A mildew stain remover that removes tough mildew stains and odors.

Rust-Inhibiting Coating

A coating that protects metal surfaces from rust and corrosion.

Water-Resistant Silicone Lubricant

A silicone lubricant that provides long-lasting lubrication and protection.

8. WD-40 Company's Porter Forces

Forces Ranking

Threat Of Substitutes

WD-40 has a unique formula that is difficult to replicate, and customers are loyal to the brand, making substitutes less of a threat.

Bargaining Power Of Customers

While customers have some bargaining power due to the availability of alternative products, WD-40's strong brand recognition and customer loyalty mitigate this threat.

Bargaining Power Of Suppliers

WD-40 has a diversified supplier base and is not heavily dependent on any one supplier, reducing the bargaining power of suppliers.

Threat Of New Entrants

The barrier to entry is high due to WD-40's strong brand recognition, patented formula, and established distribution network, making it difficult for new entrants to compete.

Intensity Of Rivalry

While there is some competition in the lubricant market, WD-40's strong brand recognition and customer loyalty help to mitigate the intensity of rivalry.

9. SWOT Analysis

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

	Value
Debt Weight	37.95%
Debt Cost	3.95%
Equity Weight	62.05%
Equity Cost	3.80%
WACC	3.86%
Leverage	61.15%

11. Quality Control: WD-40 Company passed 8 out of 9 key points

Strong Liquidity

Low Deb

Strong Interest Coverage

Healthy Cash Flow

Operating Efficiency

Strong Return On Equity

Consistent Revenue Growth

Consistent Operating Cash Flow Growth

Margin Improvement

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

WD-40

A-Score: 4.7/10

Value: 1.5

Growth: 6.0

Quality: 8.2

Yield: 3.0

Momentum: 1.0

Volatility: 8.7

1-Year Total Return ->

Axalta Coating Systems

A-Score: 4.6/10

Value: 5.8

Growth: 5.6

Quality: 6.9

Yield: 0.0

Momentum: 2.0

Volatility: 7.7

1-Year Total Return ->

Quaker Chemical

A-Score: 4.4/10

Value: 5.8

Growth: 6.3

Quality: 3.2

Yield: 3.0

Momentum: 2.5

Volatility: 5.3

1-Year Total Return ->

Avient

A-Score: 4.2/10

Value: 5.2

Growth: 3.2

Quality: 4.0

Yield: 5.0

Momentum: 1.5

Volatility: 6.0

1-Year Total Return ->

Albemarle

A-Score: 3.9/10

Value: 8.2

Growth: 3.6

Quality: 2.9

Yield: 3.0

Momentum: 3.0

Volatility: 2.7

1-Year Total Return ->

Avantor

A-Score: 3.5/10

Value: 6.3

Growth: 5.8

Quality: 5.0

Yield: 0.0

Momentum: 0.0

Volatility: 3.7

1-Year Total Return ->

Peers Metrics

12.e Scoring ^Insights

12.f DCF ^BETA

Parameters

Short Term Growth

-3.35%

Short term Time

10.0

Long-Term Growth

2.00%

WACC

3.86%

WD-40 Company - US9292361071

1. Company Snapshot

1.a. Company Description

1.b. Last Insights on WDFC

1.c. Company Highlights

Expensive

Better Quality

Medium Volatility

Earnings Beats

Revenues Beats

Less Volatile

Earnings Miss

Revenues Miss

2. WD-40's Fiscal Year 2025: A Year of Resilience and Growth

Segmental Performance

Strategic Progress

Outlook and Valuation

Return on Capital and Dividend Yield

3. NewsRoom

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (4.50%)

6. Segments

Maintenance Products

Expected Growth: 4.5%

Homecare and Cleaning Products

Expected Growth: 4.5%

7. Detailed Products

WD-40 Multi-Use Product

3-IN-ONE Multi-Purpose Oil

Spot Shot Instant Carpet Stain Remover

1001 Troubleshooter & Lubricant

Lava Heavy-Duty Hand Cleaner

X-14 Mildew Stain Remover

Rust-Inhibiting Coating

Water-Resistant Silicone Lubricant

8. WD-40 Company's Porter Forces

Forces Ranking

Threat Of Substitutes

Bargaining Power Of Customers

Bargaining Power Of Suppliers

Threat Of New Entrants

Intensity Of Rivalry

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

11. Quality Control: WD-40 Company passed 8 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

191.14$

Current Price

191.14$

Potential

-0.00%

Expected Cash-Flows

12.e Scoring ^Insights

12.f DCF ^BETA