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Why Most Investors Underestimate The WD-40 Company (WDFC)?

The WD-40 Company (WDFC) has reached a year-to-date (YTD) high of 16.31% and has fallen to -3.43% or -$10.98 in the latest trading session. Despite this, stock performance last year was nearly 64.11% higher. Comparatively, the stock is 16.31% higher year to date and 29.51% higher over the trailing 3-month period. If we analyze the shorter duration, it performed 9.09% better over the week, and 14.45% better over the month.

Last year was good for WD-40. Besides products such as rust converters and specialty lubricants, demand for its WD-40 cleaning lubricant increased. COVID-19 made many people take holidays, so they began repairing their houses, cars, boats, bicycles, and also spent more time on their hobbies. The company reported a 26% year-on-year increase in revenues (ended November 30, 2020) and earnings nearly doubled to $1.72 per share because of this trend. Sales of WD-40 BIKE for bike maintenance saw 260% growth.

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Management at the WD-40 Company (WDFC) targets a $700 million annual sales target. There has been a significant increase in the company’s revenue, which is now at $435 million, leading to a P/S ratio of just less than 10.

Since the WD-40’s sales were good last year and the expectation is that the company will perform well in 2021, the valuation is likely to be high. The forecast for the current fiscal year has not been released by WD-40 yet. WD-40 revenue is expected to grow 13% in fiscal 2021, followed by 6% in fiscal 2022.

Volatility is just a percentage of the projected day-to-day value range, where an informal investor works—the greater the insecurity, the greater the prospect of benefit or misfortune. A stock analysis shows WD-40 Company (WDFC) has a weekly volatility rate of 6.16%, while a monthly volatility rate of 4.35% is recorded. 13.68M shares are outstanding. According to a recent bid, it has a distance from the 20 days simple moving average of 9.44%, a distance from the 50 days simple moving average of 15.09%, and a distance from the 200 days simple moving average of 43.90%.

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