Shares of WD-40 Co (NASDAQ:WDFC) rallied during Thursday’s extended trading after the company reported its fiscal third-quarter results.
The strong earnings beat for the quarter was driven by robust revenue growth and gross margin expansion against “a relatively stable cost structure,” according to DA Davidson.
The WD-40 Analyst: Michael Baker reaffirmed a Buy rating and raised the price target from $270 to $305.
The WD-40 Thesis: The stock rose 22% year-to-date, with a rebound on lower oil prices. However, Baker sees further upside.
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He highlighted the following results posted by WD-40:
- Total revenues grew 24% to $195.1 million, beating consensus of $172.8 million.
- Gross margins expanded 140 basis points (bps) to 56.6%, above the 55.9% consensus.
- EBIT was reported at $40.3 million, topping consensus of $28.1 million.
- EBITDA came in at $43.8 million, higher than expectations of $31.0 million.
- Earnings grew to $2.33 per share, from last year’s $1.54 per share, and came ahead of the consensus of $1.57 per share.
The company’s revenue outperformance with driven by “beats across regions and strength in multi-use products,” the analyst noted. Trends accelerated with strong momentum in Home Depot Inc (NYSE:HD), he added.
WD-40 indicated that its performance was supported by customers ordering early to get ahead of price hikes planned this summer in Europe and Asia, which may cause revenue growth to decelerate sequentially in the fiscal fourth quarter, Baker stated.
While management’s full-year guidance was raised less than the third-quarter beat, it still indicates that the company’s performance in the back half of 2026 will be better than anticipated, he further said.
WDFC Price Action: Shares of WD-40 had risen by 14.78% to $274.80 at the time of publication on Friday.
