WD-40 (WDFC) Stock Faces Rich Valuation As Margins Slip To 13.2%

WD-40 (WDFC) has just posted Q3 2026 results with total revenue of US$195.1 million and basic EPS of US$2.25, set against trailing 12 month revenue of US$674.7 million and basic EPS of US$6.59 that reflect a 3.1% earnings growth rate over the past year compared with 6% per year over the last five years. Over recent quarters the company has seen revenue move from US$156.9 million in Q3 2025 to US$163.5 million in Q4 2025, US$154.4 million in Q1 2026, US$161.7 million in Q2 2026, and now US$195.1 million in Q3 2026, while basic EPS has ranged from US$1.54 to US$2.20 and then US$2.25. This sets up a picture of steady profitability with margins that may matter more than headline growth for investors weighing this update.

See our full analysis for WD-40.

With the latest figures on the table, the next step is to see how WD-40’s numbers line up with the widely held narratives around its growth, margins, and overall quality, and where those stories might be tested by the current earnings print.

See what the community is saying about WD-40

TTM margins ease to 13.2%

• On a trailing 12 month basis, WD-40 is earning US$88.97 million of net income on US$674.68 million of revenue, which works out to a 13.2% net margin compared with 14.1% the prior year.
• Consensus narrative expects margins to edge up over time, yet the current 13.2% trailing margin and one year earnings growth of 3.1% versus a 6% five year average show profitability running below that longer term pace.
  • Analysts are assuming revenue growth of about 6.2% a year and margin expansion from 12.5% to 12.8%. The reported margin trend is slightly in the opposite direction for now.
  • This gap between a modest softening in recent margin and the expectation of gradual improvement is exactly what readers can use to judge how realistic the consensus narrative feels.

Q3 net income steps up to US$30.2 million

• Q3 2026 net income of US$30.22 million compares with US$20.26 million in Q2 2026 and US$20.92 million in Q3 2025, while basic EPS moved to US$2.25 from US$1.50 last quarter and US$1.54 in the same quarter last year.
• This pattern gives bulls some backing, because the bullish view leans on WD-40 adding earnings power as it leans into higher value formats and geographies. At the same time, the trailing 12 month earnings growth rate of 3.1% and margin drift from 14.1% to 13.2% show that stronger single quarter results sit alongside slower multi year growth.
  • Bullish investors point to premium products and geographic expansion, yet the recent 3.1% trailing earnings growth is roughly half the 6% five year average, which is more restrained than that bullish story.
  • The latest quarterly step up in net income to just over US$30 million is therefore useful to test whether the recent slowdown is a blip or part of a gentler long run path than bullish forecasts assume.

For a closer look at how bullish investors connect WD-40's recent numbers to their long term story, check out the 🐂 WD-40 Bull Case.

Rich valuation versus 13.2% margin

• With the share price at US$264.91, WD-40 trades on about 40x trailing earnings, while the DCF fair value is given as US$49.79 and trailing net profit margin is 13.2%.
• These figures line up closely with concerns from the bearish narrative, which focuses on slower than targeted regional growth and the risk that current profitability does not fully support such a high multiple, particularly when earnings forecasts of about 0.2% a year and the recent step down in margin from 14.1% to 13.2% leave less room for disappointment than the industry average P/E of 17.6x would imply.
  • Bears highlight that valuation already prices in a lot, and the difference between the current share price and the DCF fair value of US$49.79 illustrates how sensitive this set up is to any further cooling in earnings growth.
  • At the same time, the reliable 1.54% dividend and five year average earnings growth of 6% mean the business is still profitable and distributing cash, so the bearish view leans heavily on the gap between those fundamentals and the current 40x P/E.

Skeptics who want to see how these valuation concerns fit into a fuller story on WD-40 can walk through the 🐻 WD-40 Bear Case.

Next Steps

To see how these results tie into long-term growth, risks, and valuation, check out the full range of community narratives for WD-40 on Simply Wall St. Add the company to your watchlist or portfolio so you'll be alerted when the story evolves.

If this WD-40 update feels mixed to you, that is the point; the story is not one sided. Act while the numbers are fresh in mind and stress test your own thesis against the 2 key rewards.

See What Else Is Out There

WD-40 combines a 13.2% net margin with a high 40x P/E and slower 3.1% earnings growth, which leaves little cushion if expectations soften.

If WD-40's rich valuation makes you uneasy, use the 44 high quality undervalued stocks right now to hunt for companies where pricing lines up more closely with recent fundamentals.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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