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Trex Company
(NYSE:TREX)
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Rating:70Outperform
Price Target:
$52.00
▲(13.61% Upside)
Action:Upgraded
Date:08/24/26
TREX scores solidly due to strong profitability and constructive earnings-call momentum (raised guidance, strong free cash flow, and expanded buybacks). The score is held back by only modest recent growth and a step-down in profitability versus 2024 with rising leverage/uneven cash conversion, plus a neutral-to-mixed technical posture and a mid-to-premium P/E with no dividend yield provided.
Positive Factors
Strong Profitability and Current Cash Generation
Healthy margins and positive operating and free cash flow provide internal funding for capacity, channel investment and shareholder returns. This financial base supports resilience through normal housing and remodeling cycles, despite some historical cash-conversion variability.
Negative Factors
Modest Growth and Lower Profitability
Recent growth is restrained and profitability has fallen from its 2024 peak, limiting the pace at which earnings can compound. Sustained improvement will depend on stronger demand, favorable mix and successful realization of planned operating efficiencies.
Read all positive and negative factors
Positive Factors
Negative Factors
Strong Profitability and Current Cash Generation
Healthy margins and positive operating and free cash flow provide internal funding for capacity, channel investment and shareholder returns. This financial base supports resilience through normal housing and remodeling cycles, despite some historical cash-conversion variability.
Read all positive factors
Trex Company (TREX) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$4.66B
Dividend YieldN/A
Average Volume (3M)1.95M
Price to Earnings (P/E)27.2
Beta (1Y)1.35
Revenue Growth6.97%
EPS Growth-2.53%
CountryUS
Employees1,839
SectorIndustrials
Sector Strength72
IndustryConstruction Materials
Share Statistics
EPS (TTM)1.68
Shares Outstanding101,865,190
10 Day Avg. Volume2,358,147
30 Day Avg. Volume1,945,316
Financial Highlights & Ratios
PEG Ratio-1.33
Price to Book (P/B)3.63
Price to Sales (P/S)3.20
P/FCF Ratio30.14
Enterprise Value/Market Cap<0.01
Enterprise Value/Revenue<0.01
Enterprise Value/Gross Profit<0.01
Enterprise Value/Ebitda<0.01
Forecast
1Y Price Target
$52.82Price Target Upside15.40% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering14
EPS Forecast (FY)1.77
Revenue Forecast (FY)$1.24B
Trex Company Business Overview & Revenue Model
Company Description
Trex Company, Inc. is a leading U.S. manufacturer and distributor specializing in outdoor living products for both residential and commercial applications. The company's operations are segmented into Trex Residential and Trex Commercial. For its r...
How the Company Makes Money
Trex makes money primarily by manufacturing and selling branded outdoor living building products, with revenue driven mainly by sales of composite decking boards and related railing systems. Its core revenue stream comes from wholesale sales into ...
Trex Company Earnings Call Summary
Earnings Call Date:Aug 04, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Nov 02, 2026
Earnings Call Sentiment Positive
The call was predominantly positive: the company delivered better-than-expected Q2 sales (+8% YoY), broad-based product/channel momentum (double-digit railing growth and improved entry-level sales), strong adjusted EBITDA ($112M) and free cash flow ($182M), raised full-year guidance and expanded share repurchase authorization ($150M). Near-term margin pressure resulted from product mix, accelerated Little Rock depreciation and temporary manufacturing inefficiencies (a >100 bp drag in Q2), plus a $5M noncash write-down. Management expects operational efficiency and Little Rock to drive margin accretion primarily in 2027, and provided conservative near-term guidance given geopolitical uncertainty. Overall, positives (top-line beat, cash generation, strategic initiatives and upgraded guidance) materially outweigh the temporary and manageable lowlights.Positive Updates
Net Sales Beat and Top-Line Growth
Q2 net sales of $418 million, up 8% year-over-year, with sell-in/sell-out on a rolling 12-month basis up 9% and 7% respectively; demand accelerated through May and June and continued into Q3.
Negative Updates
Gross Margin Pressure and Sequential Decline
Q2 gross profit $158 million with gross margin of 37.9%—down from prior quarter and prior year; short-term factors (mix, Little Rock depreciation, and manufacturing inefficiencies) reduced margin by more than 100 basis points during the quarter.
Read all updates
Q2-2026 Updates
Positive
Negative
Net Sales Beat and Top-Line Growth
Q2 net sales of $418 million, up 8% year-over-year, with sell-in/sell-out on a rolling 12-month basis up 9% and 7% respectively; demand accelerated through May and June and continued into Q3.
Read all positive updates
Company Guidance
Management raised its outlook and gave specific near‑term targets: Q2 net sales were $418M (+8% YoY) with gross profit $158M (37.9% gross margin), adjusted EBITDA $112M and adjusted diluted EPS $0.62 (‑$0.03 impact from a $5M write‑down); free cash flow was $182M used to repurchase ~$51M of stock and repay $130M of revolver. For Q3 they guide net sales of $305M–$320M and expect adjusted gross margin around mid‑37% (adjusted); for the full year they raised adjusted gross margin to ~38% (from 37.5%) and set adjusted EBITDA guidance of $335M–$350M, while targeting SG&A of ~18% of sales (Q2 GAAP SG&A $67M, 16.1%; adjusted $66M). They authorized up to an additional $150M of share repurchases for the balance of 2026, expect to bring ~50% of Little Rock lines into production by year‑end (Little Rock to be accretive to margins primarily in 2027), noted capacity to serve $1.8–$2.0B of revenue, and highlighted that every 1% share taken from wood equals roughly $80M of incremental sales.Trex Company Financial Statement Overview
Summary
Income Statement
78
Positive
Balance Sheet
74
Positive
Cash Flow
67
Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 1.21B | 1.17B | 1.15B | 1.09B | 1.11B | 1.20B |
| Gross Profit | 461.47M | 459.96M | 485.67M | 452.41M | 403.99M | 460.50M |
| EBITDA | 294.87M | 320.92M | 360.35M | 326.39M | 306.46M | 356.83M |
| Net Income | 177.35M | 190.41M | 226.39M | 205.38M | 184.63M | 208.74M |
Balance Sheet | ||||||
| Total Assets | 1.63B | 1.49B | 1.32B | 932.88M | 933.71M | 920.32M |
| Cash, Cash Equivalents and Short-Term Investments | 6.47M | 3.81M | 1.29M | 1.96M | 12.32M | 141.05M |
| Total Debt | 290.80M | 229.09M | 255.38M | 32.00M | 253.46M | 35.33M |
| Total Liabilities | 616.39M | 456.53M | 474.16M | 216.21M | 415.36M | 195.29M |
| Stockholders Equity | 1.01B | 1.03B | 850.14M | 716.67M | 518.35M | 725.03M |
Cash Flow | ||||||
| Free Cash Flow | 204.68M | 124.54M | -92.71M | 223.33M | 39.99M | 98.67M |
| Operating Cash Flow | 358.11M | 358.11M | 143.93M | 389.42M | 216.22M | 258.06M |
| Investing Cash Flow | -159.43M | -233.22M | -236.53M | -166.09M | -168.88M | -158.04M |
| Financing Cash Flow | -197.73M | -122.38M | 91.94M | -233.70M | -176.06M | -80.67M |
Trex Company Technical Analysis
Neutral
45.77
Price Trends
46.68
Negative
43.75
Positive
40.83
Positive
Market Momentum
0.13
Positive
44.49
Neutral
13.31
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TREX, the sentiment is Neutral. The current price of 45.77 is below the 20-day moving average (MA) of 47.88, below the 50-day MA of 46.68, and above the 200-day MA of 40.83, indicating a neutral trend. The MACD of 0.13 indicates Positive momentum. The RSI at 44.49 is Neutral, neither overbought nor oversold. The STOCH value of 13.31 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for TREX.
Trex Company Risk Analysis
Trex Company disclosed 2 risk factors in its most recent earnings report. Trex Company reported the most risks in the "Tech & Innovation" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Trex Company Peers Comparison
UnderperformOutperform
Sector (63)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
76 Outperform | $7.40B | 23.95 | 35.36% | 0.82% | 8.57% | 8.25% | |
70 Outperform | $4.66B | 27.24 | 17.38% | ― | 6.97% | -2.53% | |
68 Neutral | $10.33B | 23.50 | 23.40% | 0.52% | 10.37% | 4.62% | |
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% | |
63 Neutral | $832.93M | 151.93 | 1.31% | ― | 10.50% | ― | |
52 Neutral | $1.34B | -156.10 | -0.96% | ― | 14.47% | -220.54% | |
50 Neutral | $219.51M | -0.42 | -1054.21% | ― | -8.13% | -44.66% |
* Industrials Sector Average
TREX
Trex Company
45.77
-14.45
-24.00%
AWI
Armstrong World
175.09
-19.17
-9.87%
ROCK
Gibraltar Industries
45.27
-15.36
-25.33%
WMS
Advanced Drainage Systems
136.99
-6.45
-4.50%
JELD
JELD-WEN
2.53
-3.83
-60.22%
SWIM
Latham Group
7.08
-0.71
-9.11%
Trex Company Corporate Events
Business Operations and StrategyExecutive/Board Changes
Trex Company Appoints New Chief Commercial Officer
Positive
Aug 24, 2026
On August 20, 2026, Trex Company’s board appointed industry veteran Brian J. Taylor, formerly a senior commercial leader at POOLCORP and Sherwin-Williams, as Senior Vice President and Chief Commercial Officer, effective August 24, 2026, a ro...
Financial DisclosuresRegulatory Filings and Compliance
Trex Company Corrects Adjusted EBITDA Guidance Disclosure
Positive
Jul 15, 2026
On July 13, 2026, Trex Company, Inc. disclosed that its management had misstated full-year Adjusted EBITDA guidance during a 5:00 p.m. ET conference call, citing a range of $330 million to $345 million. The company clarified that the correct guida...
Business Operations and StrategyFinancial Disclosures
Trex Realigns Distribution Network and Lifts 2026 Outlook
Positive
Jul 13, 2026
On July 13, 2026, Trex announced a major realignment of its North American distribution network, appointing Specialty Building Products (SBP), via U.S. Lumber Group, as its sole national distributor of decking and railing across the U.S. and Canad...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.