Trex Company (TREX)
NYSE:TREX
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Trex Company
(NYSE:TREX)
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Rating:57Neutral
Price Target:
$43.00
▲(0.54% Upside)
Action:ReiteratedDate:04/01/26
The score is held up by strong balance-sheet quality and a meaningful rebound in cash generation, plus constructive (but modest) 2026 guidance and shareholder returns. It is pulled down by weak technical momentum and especially the very high P/E valuation, alongside recent revenue/margin pressure.
Positive Factors
Balance Sheet Strength
Low leverage (TTM D/E ~0.17) gives Trex durable financial flexibility to fund capex, complete the Arkansas ramp, execute repurchases, and pursue M&A without pressuring liquidity. Reduced leverage also limits covenant stress and lowers solvency risk during cyclical dips.
Negative Factors
Revenue Volatility
Sharp recent revenue swings reduce predictability of margins and cash flow, complicating capacity planning and diluting operating leverage. Persistent top-line variability raises execution risk for fixed-cost investments like Arkansas and increases earnings forecast dispersion.
Read all positive and negative factors
Positive Factors
Negative Factors
Balance Sheet Strength
Low leverage (TTM D/E ~0.17) gives Trex durable financial flexibility to fund capex, complete the Arkansas ramp, execute repurchases, and pursue M&A without pressuring liquidity. Reduced leverage also limits covenant stress and lowers solvency risk during cyclical dips.
Read all positive factors
Trex Company (TREX) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$4.35B
Dividend YieldN/A
Average Volume (3M)1.73M
Price to Earnings (P/E)405.3
Beta (1Y)1.29
Revenue Growth1.98%
EPS Growth-14.85%
CountryUS
Employees1,838
SectorIndustrials
Sector Strength72
IndustryConstruction
Share Statistics
EPS (TTM)0.04
Shares Outstanding103,889,030
10 Day Avg. Volume1,758,256
30 Day Avg. Volume1,733,794
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 Cap1.07
Enterprise Value/Revenue3.95
Enterprise Value/Gross Profit10.10
Enterprise Value/Ebitda14.47
Forecast
1Y Price Target
$47.82Price Target Upside11.80% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering15
EPS Forecast (FY)1.64
Revenue Forecast (FY)$1.21B
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. ...
How the Company Makes Money
Trex makes money primarily by manufacturing and selling outdoor living building products, with composite decking as its core revenue driver. Revenue is generated mainly from the sale of Trex-branded decking boards and related components (e.g., rai...
Trex Company Earnings Call Summary
Earnings Call Date:Feb 24, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:May 07, 2026
Earnings Call Sentiment Positive
The call conveyed a constructive strategic outlook: Trex reported modest full‑year revenue growth, strong product adoption (24% of sales from new products), robust double‑digit railing growth, meaningful distribution gains, a major capacity investment (Arkansas) coming online, and materially improved operating cash flow enabling share repurchases. However, near‑term profitability was pressured in Q4 by accounting restatements, a $6 million warranty reserve charge, higher SG&A, increased depreciation and the re‑recognition of interest expense, plus a still‑challenging repair & remodel market. Overall, the operational momentum, capacity and cash‑flow strength and clear growth initiatives outweigh the short‑term margin and accounting headwinds, implying a positive outlook as Trex invests for growth.Positive Updates
Full-Year Revenue Growth and Sell-Through
Net sales for full year 2025 were $1.17 billion, up 2% year‑over‑year, with mid‑single‑digit sell‑through for the year despite a challenged R&R market.
Negative Updates
Q4 Revenue Decline
Fourth quarter net sales were $161 million, down 4% year‑over‑year (from $168 million), though results were about $17 million above the midpoint of Q4 guidance due primarily to stronger‑than‑expected railing sales.
Read all updates
Q4-2025 Updates
Positive
Negative
Full-Year Revenue Growth and Sell-Through
Net sales for full year 2025 were $1.17 billion, up 2% year‑over‑year, with mid‑single‑digit sell‑through for the year despite a challenged R&R market.
Read all positive updates
Company Guidance
Trex guided full-year 2026 net sales of $1.185–$1.23 billion (low-single to mid-single-digit % growth year-over-year) with adjusted EBITDA of $315–$340 million (including roughly $8 million of expected adjustments for digital transformation and railing conversion, evenly split between COGS and SG&A); Q1 sales are guided at $335–$345 million. Management expects SG&A at about 18% of sales, interest expense of $10–$12 million, depreciation & amortization of ~ $85 million (≈45% in H1 and ~20% of full-year D&A in Q1, implying ~$17–$18 million in Q1), an effective tax rate of ~25.5%–27%, and capital expenditures of $100–$120 million. The company authorized a $150 million share repurchase program for H1 2026, expects meaningful additional free cash flow as the Arkansas facility completes, reported channel inventories of ~6–8 weeks, and indicated gross margin near the mid-37% range (about 100 bps below prior consensus); adjusted metrics do not add back the $6 million warranty reserve expense.Trex Company Financial Statement Overview
Summary
Income Statement
62
Positive
Balance Sheet
82
Very Positive
Cash Flow
70
Positive
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 1.17B | 1.15B | 1.09B | 1.11B | 1.20B |
| Gross Profit | 459.96M | 485.67M | 452.41M | 403.99M | 460.50M |
| EBITDA | 320.92M | 360.34M | 326.39M | 306.46M | 356.83M |
| Net Income | 190.41M | 226.39M | 205.38M | 184.63M | 208.74M |
Balance Sheet | |||||
| Total Assets | 1.49B | 1.32B | 932.88M | 933.71M | 920.32M |
| Cash, Cash Equivalents and Short-Term Investments | 3.81M | 1.29M | 1.96M | 12.32M | 141.05M |
| Total Debt | 229.09M | 255.38M | 32.00M | 253.46M | 35.33M |
| Total Liabilities | 456.53M | 474.16M | 216.21M | 415.36M | 195.29M |
| Stockholders Equity | 1.03B | 850.14M | 716.67M | 518.35M | 725.03M |
Cash Flow | |||||
| Free Cash Flow | 134.52M | -92.71M | 223.33M | 39.99M | 98.67M |
| Operating Cash Flow | 358.11M | 143.93M | 389.42M | 216.22M | 258.06M |
| Investing Cash Flow | -233.22M | -236.53M | -166.09M | -168.88M | -158.04M |
| Financing Cash Flow | -122.38M | 91.94M | -233.70M | -176.06M | -80.67M |
Trex Company Technical Analysis
Positive
42.77
Price Trends
39.41
Positive
38.59
Positive
46.74
Negative
Market Momentum
0.81
Negative
69.24
Neutral
89.53
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 42.77 is above the 20-day moving average (MA) of 37.83, above the 50-day MA of 39.41, and below the 200-day MA of 46.74, indicating a neutral trend. The MACD of 0.81 indicates Negative momentum. The RSI at 69.24 is Neutral, neither overbought nor oversold. The STOCH value of 89.53 is Negative, 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 17 risk factors in its most recent earnings report. Trex Company reported the most risks in the "Production" 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 |
|---|---|---|---|---|---|---|---|
77 Outperform | $7.64B | 31.80 | 36.09% | 0.66% | 12.11% | 17.75% | |
76 Outperform | $11.84B | 30.06 | 25.82% | 0.47% | 1.60% | 0.43% | |
69 Neutral | $7.48B | 29.69 | 17.58% | 0.69% | 4.51% | 8.60% | |
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% | |
60 Neutral | $8.15B | 57.78 | 12.63% | 0.53% | 20.11% | -36.22% | |
57 Neutral | $4.35B | 405.34 | 19.16% | ― | 1.98% | -14.85% | |
52 Neutral | $4.98B | 20.84 | 12.70% | 1.91% | -3.17% | -34.48% |
* Industrials Sector Average
TREX
Trex Company
41.90
-15.54
-27.05%
AAON
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99.59
11.21
12.68%
AWI
Armstrong World
178.27
40.38
29.29%
FBIN
Fortune Brands Innovations
41.54
-11.47
-21.64%
SSD
Simpson Manufacturing Co
181.57
28.81
18.86%
WMS
Advanced Drainage Systems
151.97
39.90
35.61%
Trex Company Corporate Events
Business Operations and StrategyPrivate Placements and Financing
Trex Company Expands and Extends Revolving Credit Facility
Positive
Apr 1, 2026
On March 26, 2026, Trex Company, Inc. amended and restated its existing credit facility, entering a new credit agreement that increases its revolving loan capacity to $700 million from $550 million and extends the maturity to March 26, 2031. The e...
Business Operations and StrategyStock Buyback
Trex Company Launches $100 Million Share Repurchase Program
Positive
Mar 3, 2026
On February 26, 2026, Trex Company, Inc. entered into a $100 million accelerated share repurchase agreement with Wells Fargo Bank to buy back its common stock, funding the prepayment through its line of credit. On February 27, 2026, Trex made the ...
Business Operations and StrategyExecutive/Board Changes
Trex Announces CEO Retirement and Internal Leadership Succession
Neutral
Feb 24, 2026
Trex Company, Inc., the global leader in wood-alternative composite decking and railing, has built a strong outdoor living franchise with a broad licensed product range, backed by one of the industry’s most extensive distribution networks an...
Business Operations and StrategyExecutive/Board Changes
Trex Company Adds Independent Director in Board Refresh
Positive
Feb 9, 2026
On February 9, 2026, Trex Company appointed Irene Tasi, Chief Transformation Officer at PPG and a veteran executive in global industrial and building products, as an independent director to its Board. She will serve on the Audit and Compensation C...
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.