WD-40 (WDFC) Stock Jumps While Q4 Earnings Expose Margin Strain

WD-40 stock jumped about 9% in regular trading, a sharp move for a mature household products business that usually trades on steadier expectations. The catalyst was Q4 2026 numbers that showed net sales of US$176.78 million and full year revenue of US$687.99 million, which appeared sufficient to reassure short term traders.

Stepping back from today’s chart, the story looks more complicated. Trailing earnings per share sit at US$6.11, while the P/E multiple is 34.3x, well above the household products peer group. That valuation level is now a key consideration for anyone focused on more than the current quarter.

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Q4 2026 Earnings Summary

• Revenue (Q4 2026 vs. Q4 2025): US$176.78 million vs. US$163.47 million (up about 8.1%)
• Net Income (Q4 2026 vs. Q4 2025): US$14.55 million vs. US$21.19 million (down about 31.3%)
• Basic EPS (Q4 2026 vs. Q4 2025): US$1.08 vs. US$1.57 (down about 30.7%)
• Gross Margin (Q4 2026 vs. FY 2026 full year): 52.8% in Q4 2026 vs. 55.3% for FY 2026 (Q4 margin was below the full-year level as raw material costs weighed on profitability)

Prefer a clear picture over another wall of earnings tables and margin figures? See WD-40's full visual breakdown, with an at a glance view of its valuation in the company report for WD-40.

WD-40 Bull Case: Premium Mix And Scale Tested

The bullish storyline hinges on WD-40 turning underpenetrated markets and premium formats into a long runway for expansion and earnings power.

"The company has captured only about one quarter of its estimated global potential for WD-40 Multi-Use Product and a little over one tenth for WD-40 Specialist, and continued geographic expansion and deeper penetration in large markets such as India, China and Latin America are key focus areas for pursuing additional revenue growth and potentially expanding earnings power."

FY26 numbers show meaningful progress toward that ambition. Maintenance product sales rose 9% in constant currency, exactly in line with the 5 to 9% target range, while Multi-Use product revenue reached US$533m and Specialist hit US$99m. Premiumized formats are now 52% of Multi-Use sales, and Specialist posted 21% reported growth with strong contributions from Latin America and China. Q4 margin pressure limits the earnings benefit in the short term, yet the scale and mix milestones that underpin the bullish expansion story are being met.

One Narrative disagrees with today's price. → See where this Narrative says WD-40 should trade.

WD-40 Margins: Bear Worries Meet Q4 Reality

One key concern has been that WD-40’s product mix and regional exposure would cap profitability even as sales expand.

"While premium formats such as Smart Straw and EZ Reach and the broader WD-40 Specialist range support higher average selling prices, mix headwinds between direct and distributor markets and across product tiers may cap further gross margin expansion above the current 55 percent level, limiting future improvement in net margins."

The latest year shows this pressure clearly. Full year gross margin held at 55.3%, yet Q4 slipped to 52.8% as specialty chemical costs hit hard. FY27 guidance of 54.0% to 55.5% implies only modest recovery and confirms that mix and input inflation are real constraints, not just theoretical risks.

Hunt For The Next Mispriced Story

WD-40 just showed how steady earnings and a full order book can still leave valuation questions hanging. The real opportunity sits in finding stocks that could be undervalued before the market closes the gap.

• Company 1 - 43% below our estimate - builds utility scale solar hardware and software as backlog growth pulls storage and inverter offerings into core projects.
• Company 2 - 24% below our estimate - metes out cloud and AI infrastructure that enterprises increasingly treat as a default operating system for data and software workflows.
• Company 3 - 44% below our estimate - installs large format LED display systems as rising orders let software, services and streamlined manufacturing take more of the heavy lifting.

That is three of the list. See every one of the 30 undervalued companies on it →

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