Trex Company (TREX) AI Stock Analysis

• Market Cap: $6.29B
• Dividend Yield: N/A
• Average Volume (3M): 1.68M
• Price to Earnings (P/E): 33.0
• Beta (1Y): 1.36
• Revenue Growth: -9.10%
• EPS Growth: -21.50%
• Country: US
• Employees: 1,838
• Sector: Industrials
• Sector Strength: 89
• Industry: Construction
• EPS (TTM): 0.60
• Shares Outstanding: 107,227,050
• 10 Day Avg. Volume: 2,021,015
• 30 Day Avg. Volume: 1,680,515
• PEG Ratio: -2.90
• Price to Book (P/B): 9.12
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 118.24
• Enterprise Value/Market Cap: 0.79
• Enterprise Value/Revenue: 1.06
• Enterprise Value/Gross Profit: 10.94
• Enterprise Value/Ebitda: 3.53
• 1Y Price Target: $67.82
• Price Target Upside: 5.79% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 13

• Rating: 68 Neutral
• Price Target: $60.00 ▼(-6.41%Downside)

Trex Company's overall stock score is driven by strong profitability and strategic initiatives, offset by challenges in revenue growth, free cash flow management, and valuation concerns. The mixed technical indicators and earnings call sentiments further contribute to a moderate outlook.

Positive Factors

Market Position and Growth

TREX expects to double its railing market share over the next 5 years by offering new products and exclusive railing relationships.

Recycling Capabilities

TREX's recycling capabilities create a competitive advantage by allowing the company to use lower cost materials, which are significantly cheaper than virgin or higher-end recycled materials.

Revenue and Capacity Expansion

The Little Rock facility will expand TREX's revenue capacity from approximately $1 billion to $2 billion and provide supply chain benefits.

Negative Factors

Inventory and Sales

Sales are down 9% year over year mainly due to the previous year's channel inventory build shifting out of the current quarter.

Valuation Concerns

The stock's valuation, trading at roughly 18x our 2025E EBITDA, represents only a modest discount to its close peer AZEK, as somewhat full on a relative basis.

Trex Company Business Overview & Revenue Model

Company Description

Trex Company, Inc. manufactures and distributes decking, railing, and outdoor living products and accessories for residential and commercial markets in the United States. The company operates in two segments, Trex Residential and Trex Commercial. It offers decking products under the names Trex Transcend, Trex Select, and Trex Enhance for protection against fading, staining, mold, and scratching; Trex Hideaway, a hidden fastening system; and Trex DeckLighting, a LED dimmable deck lighting for use on posts, floors, and steps. The company also provides Trex Transcend Railing products that are used in Trex decking products and other decking materials; Trex Select Railing products for a simple clean finished look; Trex Enhance Railing system; and Trex Signature aluminum railing for a contemporary look. In addition, it offers Trex Seclusions, a fencing product that includes structural posts, bottom and top rails, pickets, and decorative post caps. In addition, it designs, engineers, and markets architectural and aluminum railing systems, and staging equipment and accessories for the commercial market, as well as sports stadiums and performing arts venues. Further, the company acts as a licensor in various licensing agreements with third parties to manufacture and sell products under the Trex name, including Trex Outdoor Furniture; Trex RainEscape, an above joist deck drainage system; Trex Pergola, a cellular PVC product; Trex Latticeworks outdoor lattice boards; Trex Cornhole boards; Diablo Trex Blade, a saw blade for wood-alternative composite decking; Trex SpiralStairs and structural steel posts; and Trex Outdoor Kitchens, Cabinetry, and Storage products. It sells its products through wholesale distributors, retail lumber dealers, and Home Depot and Lowe's stores, as well as through its direct sales staff, independent sales representatives, and bidding on projects. Trex Company, Inc. was founded in 1996 and is headquartered in Winchester, Virginia.

How the Company Makes Money

Trex Company makes money primarily through the sale of its composite decking and railing products. Its revenue model is based on manufacturing and distributing eco-friendly outdoor living solutions to contractors, builders, and retail customers through a network of dealers and distributors. Key revenue streams include sales of its flagship Trex decking products, Trex railing systems, and other related accessories. The company benefits from strong brand recognition and a growing demand for sustainable and low-maintenance outdoor products. Strategic partnerships with major retailers, such as The Home Depot and Lowe's, also play a significant role in expanding its market reach and driving sales.

Trex Company Financial Statement Overview

Summary

Trex Company demonstrates strong profitability and a robust balance sheet with consistent returns and manageable leverage. However, challenges in revenue growth and free cash flow management require attention.

Income Statement

Trex Company shows strong profitability with a stable gross profit margin of approximately 40% over recent periods. However, there is a slight dip in total revenue in the TTM, indicating a potential challenge in maintaining growth. The net profit margin remains robust at around 17.7% for TTM, providing a solid return on sales despite slight fluctuations in EBIT and EBITDA margins.

Balance Sheet

The company's balance sheet is strong, with a healthy equity ratio of about 55.5% as of TTM, reflecting solid asset backing. The debt-to-equity ratio has increased due to higher debt levels, yet remains manageable. Return on equity is impressive, driven by consistent profitability, signaling efficient use of shareholder funds.

Cash Flow

Trex's cash flow performance highlights some concerns, particularly with free cash flow turning negative in recent periods. Operating cash flow remains solid, but high capital expenditures have pressured free cash flow, posing a risk if this trend continues. The operating cash flow to net income ratio is healthy, indicating good cash generation relative to profits.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	1.12B	1.15B	1.09B	1.11B	1.20B	880.83M
Gross Profit	453.79M	485.67M	452.41M	403.99M	460.50M	359.46M
EBITDA	309.64M	360.34M	326.39M	306.46M	356.83M	251.57M
Net Income	197.76M	226.39M	205.38M	184.63M	208.74M	175.63M
Balance Sheet
Total Assets	1.64B	1.32B	932.88M	933.71M	920.32M	770.49M
Cash, Cash Equivalents and Short-Term Investments	4.96M	1.29M	1.96M	12.32M	141.05M	121.70M
Total Debt	494.83M	255.38M	32.00M	245.97M	28.26M	28.58M
Total Liabilities	731.12M	474.16M	216.21M	415.36M	195.29M	181.96M
Stockholders Equity	910.08M	850.14M	716.67M	518.35M	725.03M	588.53M
Cash Flow
Free Cash Flow	-115.08M	-92.71M	223.33M	39.99M	98.67M	14.47M
Operating Cash Flow	163.96M	143.93M	389.42M	216.22M	258.06M	187.29M
Investing Cash Flow	-278.89M	-236.53M	-166.09M	-168.88M	-158.04M	-170.66M
Financing Cash Flow	116.84M	91.94M	-233.70M	-176.06M	-80.67M	-43.77M

Trex Company Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 64.11
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

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 64.11 is above the 20-day moving average (MA) of 56.52, above the 50-day MA of 57.44, and above the 200-day MA of 64.08, indicating a bullish trend. The MACD of 1.06 indicates Negative momentum. The RSI at 68.57 is Neutral, neither overbought nor oversold. The STOCH value of 89.83 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TREX.

Trex Company Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
WTS	79 Outperform	$8.49B	29.13	17.61%	0.81%	3.89%	8.17%
AWI	75 Outperform	$7.24B	26.70	38.60%	0.74%	14.55%	17.54%
LPX	72 Outperform	$6.26B	15.80	24.41%	1.25%	8.09%	55.08%
TREX	68 Neutral	$6.29B	32.96	23.07%	―	-9.10%	-21.50%
SITE	67 Neutral	$5.76B	51.48	7.64%	―	4.73%	-27.46%
Sector *	58 Neutral	HK$14.03B	4.45	-3.01%	7.32%	3.67%	-54.16%
JOBY	57 Neutral	$9.02B	―	-64.96%	―	-89.50%	-10.50%

Trex Company Corporate Events

Trex Company CFO Resignation and Leadership Transition

On June 23, 2025, Trex Company announced the resignation of its Chief Financial Officer, Brenda Lovcik, who will leave her position to relocate to Minnesota. She will continue in her role until August 5, 2025, after which Bryan Fairbanks, the current CEO and former CFO, will assume the CFO responsibilities on an interim basis. The company has initiated a search for a new CFO. Despite this leadership change, Trex reaffirmed its financial guidance for 2025, projecting revenue growth of 5%-7% and an Adjusted EBITDA margin exceeding 31%.

The most recent analyst rating on (TREX) stock is a Hold with a $80.00 price target. To see the full list of analyst forecasts on Trex Company stock, see the TREX Stock Forecast page.