Why Are WD-40 (WDFC) Shares Soaring Today

Radek Strnad /
2024/07/11 11:30 am EDT

What Happened:

Shares of household products company WD-40 (NASDAQ:WDFC) jumped 13.1% in the morning session after the company reported second quarter results that blew past analysts' revenue and EPS expectations. Looking ahead, its full-year revenue guidance came in higher than Wall Street's estimates. On the other hand, its full-year earnings forecast was underwhelming, but the other beats more than made up for it. Overall, we think this was a really good quarter that should please shareholders. After the initial pop the shares cooled down to $228.73, up 4.1% from previous close.

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What is the market telling us:

WD-40's shares are not very volatile than the market average and over the last year have had only 2 moves greater than 5%. Moves this big are very rare for WD-40 and that is indicating to us that this news had a significant impact on the market's perception of the business. 

The biggest move we wrote about over the last year was 6 months ago, when the stock gained 6.7% on the news that the company reported first quarter results that exceeded analysts' revenue expectations. Its operating margin also outperformed Wall Street's estimates. Management provided encouraging comments and added that improved trends observed in the second half of fiscal year '23 have carried into fiscal year '24. The CEO said, "This is the first time since fiscal year 2021 that our business has been firing on all cylinders." Therefore, it was not surprising that it reiterated its previous outlook for fiscal 2024, showing that WD-40 is staying on track. Zooming out, we think this was a solid quarter that should please shareholders.

WD-40 is down 5.6% since the beginning of the year, and at $228.73 per share it is trading 17.1% below its 52-week high of $275.82 from January 2024. Investors who bought $1,000 worth of WD-40's shares 5 years ago would now be looking at an investment worth $1,292.

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