Fastenal (NASDAQ:FAST) is slated to release its quarterly report on Wednesday. Yet although investors expect Fastenal earnings to improve slightly, the big question is whether any growth will be enough to support the stock's rich valuation. Unless Fastenal can provide a nice surprise on the earnings front, the answer to that question is likely to be no.

Fastenal has its foot in two parts of the industrial and construction business, supplying corporate customers with fasteners and other products that they can then incorporate into their own work, as well as selling those products directly to retail customers. With the economy starting to perk up, can Fastenal make its mark and get its growth to accelerate? Let's take an early look at what's been happening with Fastenal over the past quarter and what we're likely to see in its quarterly report.

Stats on Fastenal

Analyst EPS Estimate

$0.41

Change From Year-Ago EPS

7.9%

Revenue Estimate

$857.13 million

Change From Year-Ago Revenue

6.5%

Earnings Beats in Past 4 Quarters

1

Source: Yahoo! Finance.

Is Fastenal's earnings growth slowing down too fast?
Analysts have been concerned about Fastenal's earnings growth prospects in recent months, having trimmed a penny per share from their June-quarter estimates and $0.04 and $0.06 respectively from their full-year 2013 and 2014 consensus figures. The stock has reflected that pessimism, having lost more than 5% since early April.

Part of that decline is due to Fastenal's most recent quarterly earnings report, in which the company failed to meet sales expectations. In the company's conference call, Fastenal executives pointed to improving margins and greater signings of customers for its tool and supply vending machines, but even with cost-cutting and other initiatives designed to bolster profits, generally weak economic conditions have contributed to the weak pace of revenue growth.

Worse than that news is the fact that some of Fastenal's competitors have held up somewhat better. MSC Industrial (NYSE:MSM) encountered much of the same sales weakness from the metalworking industry that Fastenal saw in its overall results, and both stocks have performed in line with each other over the past quarter. But W.W. Grainger (NYSE:GWW) soared after its earnings in April, as it saw its earnings rise more than 14% and boosted its guidance for full-year 2013 revenue and earnings.

At this point, though, some analysts are looking at Fastenal's results almost as a self-fulfilling prophecy, as they not only reflect the recent weakness in economic activity but also are contributing to that weakness themselves. In particular, as data on factory orders and construction activity paint an uncertain picture of the industry's immediate future, Fastenal can only concentrate on making the most of the business opportunities it has and hope that macroeconomic influences stop producing headwinds in the near future.

In the coming Fastenal earnings report, look for the company to discuss how it plans to move forward to accelerate its growth. With Fastenal stock fetching almost 25 times forward 2014 earnings, the company can't afford to see its revenue growth slow any further than it already has if it wants to keep investors happy.

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Fool contributor Dan Caplinger has no position in any stocks mentioned. You can follow him on Twitter @DanCaplinger. The Motley Fool recommends MSC Industrial Direct. The Motley Fool owns shares of MSC Industrial Direct. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.