NEW YORK (TheStreet) -- Industrial and construction products supplier Fastenal (FAST - Get Report) has been a relative outperformer, given the uneven growth in U.S. manufacturing.

But the company's decision to ramp up its salesforce at various retail locations -- though it's been a boon for 2014 revenue -- has come at the expense of higher profits. The Minnesota-based company has outgrown its competitors in terms of revenue yet there are signs that margins have begun to contract.

Part of this can be blamed on the investment made in hiring more sales people. The company is willing to sacrifice near-term profits for higher sales. That's not necessarily a problem, given that sales in Fastenal's previous two quarters have climbed by an average of 10% year over year.

But larger competitors including W.W. Grainger  (GWW - Get Report) and smaller competitors like HD Supply  (HDS - Get Report) shouldn't be ignored. The latter, while half the size of Fastenal in market cap ($6 billion vs. $12 billion), produces more than twice Fastenal's sales in the last 12 months ($8.8 billion vs. $3.74 billion).

Just this past week, Fastenal's profit estimates for the quarter that ended March have dropped from 42 cents per share to 41 cents per share, down 7% in the past two months when it was at 44 cents. For the quarter ending in June, estimates are down 4%, from 50 cents per share two months ago to now 48 cents per share.

For the full year ending in December, the company is now projected to earn a profit of $1.84 per share, down 3.6% from three months ago when full-year profit estimates were at $1.91 per share.

Why are estimates falling? Aside from competitive threats, Fastenal in the fourth quarter, reported in January, warned that sales from its top-producing regions may be hurt by weak oil prices, among other things. This means that areas that account for 10% to 12% of its sales may be pressured.

So while Fastenal, which reports first-quarter earnings results Tuesday before the open, may be justified in its recent investments to grow long-term sales, investors must nonetheless reconcile the issue of value. Having grown profits in its previous eight quarters, the company has shown it can execute, yes. But there's no clear sign that these shares will trend higher any time soon.

And even though Fastenal stock, which is down 16% on the year, may seem undervalued, the stock is trading at a premium P/E of 24, compared to the S&P 500  (SPX) index, which trades at a P/E of 21.

So at around $40 per share and trading near its 52-week low, there's still the possibility that these shares can still fall, say, to around $35 per share -- assuming Fastenal trades at fair value to the rest of the market. For that matter, competitors W.W. Grainger or MSC Industrial Direct  (MSM - Get Report), which are valued at P/Es of 20 and 18, respectively, seem like better investments, given the rate at which analysts have trimmed their profit estimates on Fastenal.

When estimates are being revised lower, it makes sense for investors to adjust their expectations accordingly. While Fastenal, which has grown sales almost 150% in the past decade from around $1.5 billion to $3.7 billion, remains a solid company, the stock is not a screaming buy today. But should shares fall 10% around $36 or $35 then I'd to reconsider.

This article is commentary by an independent contributor. At the time of publication, the author held no position in the stocks mentioned.