Value
4.2/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 3.6 |
| P/S | 7.5 |
| EV/EBITDA | 0.0 |
| Fwd P/E | 4.0 |
| PEG | 4.7 |
| Analyst target | 5.0 |
- ▸Forward P/E: 30.2x
- ▸PEG: 1.82
WDFC · Why this verdict
Why WD-40 (WDFC) is rated SELL
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results. How we score · Editorial policy
Show full disclosure ▾Hide full disclosure ▴
About TrendMatrix. TrendMatrix is a publisher of general securities research and market commentary. We publish on a regular schedule. All content is the same for every subscriber in a tier — we do not provide personalized investment advice and we do not take into account any individual subscriber's financial situation, investment objectives, risk tolerance, tax situation, or holdings.
Not investment advice. TrendMatrix is not a registered investment adviser. Our content is for informational and educational purposes only. Consult your own licensed investment adviser, broker, or tax professional before making any investment decision.
Conflicts and positions. People who build TrendMatrix, or entities they control, may hold positions, long or short, in securities it covers, and may trade them at any time. Positions are not disclosed individually. Verdicts are generated by an automated model applied by the same rules to every covered stock, and are not adjusted for any position held by the people who build TrendMatrix. We do not accept payment from issuers for coverage.
No paid promotion. TrendMatrix does not accept payment from any issuer, broker, or third party in exchange for coverage of any security.
No fiduciary duty. No fiduciary, advisory, or agency relationship is created between you and TrendMatrix by reading our content or subscribing to our service.
Performance. Past performance is not indicative of future results. Performance figures reflect the published model only and do not reflect any individual subscriber's actual results.
VerdictSELL
Overall score5.8/10
ConfidenceMEDIUM
MacroRISK_OFF
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. | ↓Deteriorating |
| 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. | ↓Deteriorating |
| 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. | ↓Deteriorating |
| 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. | ↓Deteriorating |
| 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.
↓DeterioratingEarnings
- 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.
↓DeterioratingQuality 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.
↓DeterioratingValuation 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.
↓DeterioratingOptions
- 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
7.9/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 10.0 |
| ROA | 9.4 |
| Gross margin | 7.1 |
| Op margin | 4.3 |
| Net margin | 6.0 |
| Current ratio | 8.7 |
| FCF quality | 7.6 |
| Moat | 7.6 |
| Piotroski F | 10.0 |
- ▸Excellent ROE: 30%
- ▸Wide economic moat
- ▸Compounder quality: strong returns + growth
- ▸Strong Piotroski F-Score: 9/9
Growth
4.9/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 4.5 |
| EPS growth | 5.3 |
Momentum
6.7/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 3.9 |
| MACD | 10.0 |
| OBV | 10.0 |
| MA position | 7.2 |
| Volume | 2.6 |
- ▸Volume accumulation (rising OBV)
- ▸Below 200-MA but MA still rising (+0.5%/30d) — pullback in uptrend, not confirmed weakness
Sentiment
6.5/10data confidence 100%| Component | Sub-score |
|---|---|
| Analyst rating | 6.8 |
| Price target | 7.5 |
| erm sentiment | 5.0 |
- ▸Light analyst coverage (3.0) — signal dampened
Insider
5.2/10data confidence 50%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 5.5 |
- ▸Negligible insider selling — $117,063 (0.004% of mkt cap)
Peer rank
6.1/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 2.7 |
| quality rank | 9.0 |
| growth rank | 4.5 |
- ▸Superior ROE vs peers
- ▸Best-in-class margins
Technical
2.8/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 1.3 |
| support resistance | 2.5 |
| 52w position | 4.5 |
Risk (lower is worse)
7.3/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 7.5 |
| days to cover | 6.9 |
| volatility | 4.8 |
| put call | 7.3 |
| implied vol | 6.4 |
| beta | 10.0 |
| debt equity | 8.5 |
Catalyst
5.2/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 3.3 |
| earnings timing | 5.0 |
| surprise avg | 6.4 |
| dividend safety | 6.5 |
- ▸Earnings concerns: 2B/2M
How the verdict was assembled
Engine trigger
Maintain position. Not compelling to add more. | News modifier -1 (HOLD_IF_HOLDING → SELL_IF_HOLDING).
Engine technical detail
verdict_path:
L4:PATH_F_HOLD|L3:NEWS_MOD=-1Passed (7)
- MOMENTUM:6.7>=5.5
- INSIDER:OK
- 8K:CLEAN
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:70d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (1)
- ASYMMETRY:0.1<1.5@spot
Warning (0)
none
Reward-to-Risk
0.08
Upside
+0.9%
Downside
10.5%
Sizing output
AVOID
Setup— — No clear chart pattern; technical signals are mixed
EdgeNo clear edge — No clear edge identified
SuitabilityAggressive — MCap $2.9B<$5B
Investment implication
None of the engine's positive-conviction paths (C-quality, D-momentum) triggered — the F-path HOLD reflects balanced signals. Strongest-cleared gate: MOMENTUM:6.7>=5.5. Top dim: Quality at 7.9; weakest: Technical at 2.8. No conviction either direction.
The strongest dimensions are Quality at 7.9, Risk (lower is worse) at 7.3, and Momentum at 6.7; the weakest are Technical at 2.8, Value at 4.2, and Growth at 4.9. The V9 engine flagged 1 failed gate, producing an asymmetric reward-to-risk of 0.08 and an engine sizing output of AVOID.
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.