WD‑40 stock ripped higher, jumping 9.2% to about US$210 after the company posted its Q4 2026 scorecard. Traders focused on the headline surge in quarterly net sales to US$176.8 million and rewarded the ticker fast. The longer view looks different. Over the past 90 days the share price had declined roughly 9.1%, while trailing net profit margin over the last year eased to 12% from 14.6%.
That tension between a euphoric day and a more demanding multi‑year picture, with a rich P/E multiple and softer profitability, is the core story investors now have to price in.
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Q4 2026 Earnings Summary
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Revenue (Q4 2026 vs. Q4 2025):US$176.78 million vs. US$163.47 million (up about 8%)
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Net Income (Q4 2026 vs. Q4 2025):US$14.55 million vs. US$21.19 million (down about 31%)
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Basic EPS (Q4 2026 vs. Q4 2025):US$1.08 vs. US$1.57 (declined about 31%)
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Gross Margin (FY 2026 vs. FY 2025):55.3% vs. 55.1% (broadly stable year on year)
Management leaned hard into WD-40 as a "perpetual compounder.". Ask Charlie what makes WD-40 a perpetual compounder .
WD-40 bullish thesis: market headroom meets mixed execution
The optimistic story says WD-40 can keep widening its reach while holding its margin structure together.
"Analysts expect WD-40 to keep benefiting from global geographic expansion and direct market strategies, with recent growth in regions such as China, India and Latin America supporting the view that a large portion of the attainable market is still untapped."
FY26 maintenance product sales reached US$665.9m and Q4 trade bloc data backs that expansion, with double digit gains in EIMEA and Asia Pacific plus Latin America strength. Direct market rollout in Japan also started. Revenue momentum and the 55.3% full year gross margin show the expansion and margin discipline pieces are broadly tracking, even though Q4 profitability softened.
WD-40 bearish thesis: input costs and mix pressure profitability
The cautious view argues rising costs and less profitable legacy brands could erode economics even if sales grow.
"Higher petroleum based specialty chemical costs linked to conflict in the Middle East are already pressuring gross margins, with management cautioning that these input costs rose faster than headline oil prices and may ease only gradually."
Q4 gross margin of 52.8% confirms that pressure, with specialty chemicals hitting profitability despite pricing and can savings. Management still kept FY26 gross margin slightly above 55% and guides 54% to 55.5% for FY27, so the downside risk is present but not yet translating into a broad margin break, helped by cost programs and pricing actions.
That disagreement has a full argument behind it. → Uncover the higher Fair Value this Narrative argues for .
Hunt For Mispriced Earnings Power
WD-40 recently reported results that contrasted sharply with its prior few months. The real opportunity is in stocks that may be undervalued before the market reassesses their earnings power.
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Company 1 - 34% below our estimate - converts high-complexity manufacturing orders into longer contracts in tightly regulated end markets.
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Company 2 - 40% below our estimate - scales new film plants and installation hubs to serve automakers and dealers bundling surface protection.
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Company 3 - 24% below our estimate - meters enterprise AI workloads through cloud tools so customers expand spending as automation projects go live.
That is three of the list. See all 29 potentially undervalued companies →
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.
Companies discussed in this article include WDFC .
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