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More Reading from MarketBeat.com WD-40 Stock Sank After Earnings—Here Are 5 Reasons Bulls Aren't WorriedReported by Thomas Hughes. Publication Date: 1/12/2026. 
Key Points - WD-40 is trading near long-term lows, setting for a rebound that can deliver a high-double-digit total return within years.
- Q1 softness is tied to distributor order timing, not end-market weakness, and long-term forecasts were reaffirmed.
- Capital returns underpin the outlook, including the dividend and share buybacks.
WD-40's (NASDAQ: WDFC) fiscal Q1 2026 earnings report prompted a market sell-off. However, the decline opened a buying opportunity that many total-return investors find attractive. Warren Buffett is sitting on $344 billion, the biggest cash position of his career. Meanwhile, CEOs behind America's most powerful tech companies are selling billions in shares even as Wall Street tells everyday investors to buy the AI dip. After 46 years tracking institutional money flows, one pattern stands out: money is leaving crowded AI trades and flooding into an ignored corner of the market. The reason is power. A single AI data center uses as much electricity as a small city, and the grid can't handle what's coming. Institutions are quietly loading up on companies upgrading America's power backbone. See the stocks flagged to lead the next leg of this market. Although the stock is down significantly from its high, it continues to trade in line with long-term trends, suggesting meaningful upside potential and a healthy dividend. Despite Q1 results falling short of analyst expectations, WD-40's long-term setup remains intact—and five fundamentals explain why the sell-off may present a buying opportunity. 1. Revenue Growth Is Still Intact The WD-40 report failed to spark a rally because growth missed expectations. At $154.4 million, reported revenue grew by less than 1%, driven largely by FX translation. On an FX-neutral basis, revenue declined by more than 2%. That said, the internal details are more encouraging: growth exists, and some of the weakness reflects the timing of distributor orders rather than underlying demand. Direct-market sales rose a robust 8%, supported by gains in the Americas and EIMEA regions and strength in the Specialty Products segment. Management expects indirect-market softness to normalize as the year progresses. 2. Gross Margin Expansion Signals Operating Leverage Timing-related softness appears to explain much of the disappointing headline, but profitability actually improved. Gross margin widened by 140 basis points, positioning the company for stronger earnings as revenue leverage returns. The reported 10% increase in SG&A was linked to non-recurring charges with limited impact on cash flow. Free cash flow margin remained at 17.5%, supporting continued capital returns including dividends and buybacks. 3. WD-40 Reaffirms Fiscal 2026 Guidance and Long-Term Outlook Despite a weak Q1, the company reaffirmed full-year guidance and indicated it expects results toward the high end of the range. For fiscal 2026, WD-40 forecasts revenue growth of 5%–9%, operating income growth of 5%–12%, and commensurate earnings growth. Management also highlights a long-term opportunity: the company estimates it has reached only about 25% saturation of its target market and could expand substantially over time. Given that backdrop, the stock's current ~34x price multiple in early 2026 looks less demanding. On a potential end-state basis the stock would trade at roughly 10x, implying significant value. 4. Dividend Growth and Buybacks Support Total Returns WD-40's capital return program — dividends plus share repurchases — remains a meaningful support for long-term total returns. The dividend, yielding slightly more than 2% with the stock near long-term lows, represents roughly 60% of projected earnings and has been increased annually for 17 consecutive years. The most recent dividend raise was over 8%, and future increases are expected to track earnings growth. The company repurchased more than $20 million of stock in fiscal 2025 and plans to accelerate buybacks in 2026. Q1 repurchases exceeded $7.5 million, modestly reducing the outstanding share count year over year. 5. Institutional Ownership Provides a Stock Price Backstop Institutions — the driving force behind most stocks — favor this one. They own more than 90% of the float and shifted back to buying in the back half of 2025 after selling earlier in the year. That buying coincided with the market bottom and suggests a potential floor for the stock in early 2026. The main risk is a pullback toward the long-term moving average near $175, but deeper lows appear unlikely. The more probable path is that the stock continues to find support around early-January levels before regaining traction later in the year. 
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