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Trex Company
(NYSE:TREX)
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Rating:69Neutral
Price Target:
$53.00
▲(23.92% Upside)
Action:Reiterated
Date:05/09/26
The score is driven primarily by solid financial performance (healthy profitability and improving growth/FCF versus last year), supported by a constructive but cautious earnings outlook with active buybacks. The main constraints are only-neutral technical momentum (still below the 200-day average) and near-term margin headwinds that management expects to manage through mix, pricing, and cost actions.
Positive Factors
High margins and solid profitability
Sustained TTM gross (~39%) and net (~16%) margins reflect durable pricing power, favorable product mix and manufacturing scale. These margins support long‑term cash generation and reinvestment capacity, even if peak 2024 levels pulled back, indicating resilient core profitability.
Negative Factors
Planned FY margin headwind (~250 bps)
A persistent ~250bps gross‑margin drag from Arkansas depreciation and higher railing mix is structural for 2026. That pressure will weigh on operating profit conversion through the year and requires lasting mix shifts, cost‑outs, or price actions to fully offset.
Read all positive and negative factors
Positive Factors
Negative Factors
High margins and solid profitability
Sustained TTM gross (~39%) and net (~16%) margins reflect durable pricing power, favorable product mix and manufacturing scale. These margins support long‑term cash generation and reinvestment capacity, even if peak 2024 levels pulled back, indicating resilient core profitability.
Read all positive factors
Trex Company (TREX) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$5.04B
Dividend YieldN/A
Average Volume (3M)2.10M
Price to Earnings (P/E)27.1
Beta (1Y)1.30
Revenue Growth5.36%
EPS Growth-1.81%
CountryUS
Employees1,838
SectorIndustrials
Sector Strength72
IndustryConstruction
Share Statistics
EPS (TTM)1.79
Shares Outstanding103,898,730
10 Day Avg. Volume2,310,896
30 Day Avg. Volume2,099,854
Financial Highlights & Ratios
PEG Ratio-1.33
Price to Book (P/B)3.63
Price to Sales (P/S)3.20
P/FCF Ratio27.91
Enterprise Value/Market Cap1.02
Enterprise Value/Revenue4.38
Enterprise Value/Gross Profit11.17
Enterprise Value/Ebitda15.76
Forecast
1Y Price Target
$47.67Price Target Upside11.45% Upside
Rating ConsensusHold
Number of Analyst Covering11
EPS Forecast (FY)1.68
Revenue Forecast (FY)$1.21B
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:May 07, 2026
(Q1-2026)
| % Change Since: |
Next Earnings Date:Aug 10, 2026
Earnings Call Sentiment Positive
The call conveyed measured optimism: Trex reported modest top-line growth (Q1 net sales +1%) with stronger-than-expected gross margin (40.5%, +100 bps vs plan) and adjusted EBITDA growth (+2%). Management highlighted meaningful strategic progress—marketing and lead-generation gains (double-digit increase), distribution wins, aggressive $150M buyback execution ($100M ASR completed), near-complete Arkansas capacity that will substantially reduce future CapEx, and durable competitive advantages from a high recycled-content manufacturing base. Offsets include intentional Q1 volume level-loading, negative Q1 free cash flow (improved ~40% YoY), near-term margin headwinds (~250 bps full-year) driven by Arkansas depreciation and railing mix, expected SG&A step-up in Q2, weather-driven regional softness, and conservatism in guidance due to geopolitical and macro uncertainty. Overall, positives around execution, capital allocation, and structural advantages appear to outweigh short-term operational and margin headwinds.Positive Updates
Modest Revenue Growth
Net sales of $343 million in Q1, up 1% year-over-year, driven by consumer sales and channel stocking ahead of peak season.
Negative Updates
Negative Free Cash Flow in Q1
Free cash flow was negative $143 million in Q1 due to build-up of inventory and accounts receivable ahead of peak selling season, despite a nearly 40% improvement versus prior year.
Read all updates
Q1-2026 Updates
Positive
Negative
Modest Revenue Growth
Net sales of $343 million in Q1, up 1% year-over-year, driven by consumer sales and channel stocking ahead of peak season.
Read all positive updates
Company Guidance
Trex reiterated full-year 2026 guidance of net sales of $1.185–$1.230 billion, adjusted gross margin of ~37.5% and adjusted EBITDA of $340–$350 million, and guided Q2 net sales of $388–$403 million. In Q1 the company reported net sales of $343 million (+1% YoY), gross profit $139 million and gross margin 40.5% (≈100 bps favorable), adjusted EBITDA $103 million (+2%), SG&A $56 million (16.2% of sales; $54M ex $1M digital and $0.2M Arkansas startup), and free cash flow of negative $143 million (an ~40% improvement YoY). Management expects FY CapEx of $100–$120 million (down from $224M in 2025) with 2027 maintenance CapEx ~5–6% of revenue, trailing 12‑month sell‑in up 7% and sell‑out up 6%, net leverage ~1x EBITDA (target 1–2x), will complete a $150M repurchase (including a $100M ASR) in Q2 with a board‑authorized 10M‑share increase, and reiterated a flat‑to‑down repair & remodel backdrop plus an embedded ~250‑bp gross‑margin headwind in 2026 (170–180 bps depreciation, 70–80 bps railing mix) to be managed by mix, pricing, cost‑outs and the Arkansas ramp.Trex Company Financial Statement Overview
Summary
Income Statement
78
Positive
Balance Sheet
72
Positive
Cash Flow
70
Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 1.18B | 1.17B | 1.15B | 1.09B | 1.11B | 1.20B |
| Gross Profit | 461.25M | 459.96M | 485.67M | 452.41M | 403.99M | 460.50M |
| EBITDA | 326.96M | 320.92M | 360.35M | 326.39M | 306.46M | 356.83M |
| Net Income | 191.38M | 190.41M | 226.39M | 205.38M | 184.63M | 208.74M |
Balance Sheet | ||||||
| Total Assets | 1.73B | 1.49B | 1.32B | 932.88M | 933.71M | 920.32M |
| Cash, Cash Equivalents and Short-Term Investments | 4.49M | 3.81M | 1.29M | 1.96M | 12.32M | 141.05M |
| Total Debt | 435.20M | 229.09M | 255.38M | 32.00M | 253.46M | 35.33M |
| Total Liabilities | 734.05M | 456.53M | 474.16M | 216.21M | 415.36M | 195.29M |
| Stockholders Equity | 995.76M | 1.03B | 850.14M | 716.67M | 518.35M | 725.03M |
Cash Flow | ||||||
| Free Cash Flow | 239.42M | 134.52M | -92.71M | 223.33M | 39.99M | 98.67M |
| Operating Cash Flow | 393.70M | 358.11M | 143.93M | 389.42M | 216.22M | 258.06M |
| Investing Cash Flow | -178.16M | -233.22M | -236.53M | -166.09M | -168.88M | -158.04M |
| Financing Cash Flow | -216.01M | -122.38M | 91.94M | -233.70M | -176.06M | -80.67M |
Trex Company Technical Analysis
Positive
42.77
Price Trends
42.35
Positive
40.87
Positive
41.46
Positive
Market Momentum
2.18
Negative
60.59
Neutral
75.23
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TREX, the sentiment is Positive. The current price of 42.77 is below the 20-day moving average (MA) of 46.20, above the 50-day MA of 42.35, and above the 200-day MA of 41.46, indicating a bullish trend. The MACD of 2.18 indicates Negative momentum. The RSI at 60.59 is Neutral, neither overbought nor oversold. The STOCH value of 75.23 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive 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 |
|---|---|---|---|---|---|---|---|
73 Outperform | $6.77B | 22.49 | 34.81% | 0.66% | 9.71% | 13.17% | |
73 Outperform | $8.26B | 23.42 | 17.68% | 0.69% | 6.31% | 11.06% | |
69 Neutral | $5.04B | 27.08 | 18.85% | ― | 5.36% | -1.81% | |
67 Neutral | $11.66B | 27.77 | 22.43% | 0.47% | 5.03% | -5.49% | |
65 Neutral | $8.82B | 74.22 | 13.40% | 0.53% | 28.27% | -25.82% | |
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% | |
60 Neutral | $6.35B | 23.65 | 11.48% | 1.91% | -2.01% | -34.26% |
* Industrials Sector Average
TREX
Trex Company
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Trex Company Corporate Events
Business Operations and StrategyExecutive/Board ChangesShareholder Meetings
Trex Company Names Zachary Lauer Chief Operations Officer
Positive
May 4, 2026
On April 28, 2026, Trex Company’s board appointed long‑time executive Zachary C. Lauer as Senior Vice President and Chief Operations Officer, a move formally announced in a May 4, 2026 press release. Lauer, who has more than two decade...
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.