Trex Company (TREX) AI Stock Analysis

• Market Cap: $4.44B
• Dividend Yield: N/A
• Average Volume (3M): 1.81M
• Price to Earnings (P/E): 22.5
• Beta (1Y): 1.28
• Revenue Growth: 0.10%
• EPS Growth: -15.99%
• Country: US
• Employees: 1,838
• Sector: Industrials
• Sector Strength: 72
• Industry: Construction
• EPS (TTM): 0.51
• Shares Outstanding: 107,254,780
• 10 Day Avg. Volume: 1,637,648
• 30 Day Avg. Volume: 1,808,214
• PEG Ratio: 3.12
• Price to Book (P/B): 8.78
• Price to Sales (P/S): 6.49
• P/FCF Ratio: -80.56
• Enterprise Value/Market Cap: 1.03
• Enterprise Value/Revenue: 3.89
• Enterprise Value/Gross Profit: 9.85
• Enterprise Value/Ebitda: 13.93
• 1Y Price Target: $44.12
• Price Target Upside: 6.52% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 18
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 67 Neutral
• Price Target: $45.00 ▲(8.64% Upside)

Trex Company's overall stock score reflects strong financial health and positive corporate events, but is tempered by bearish technical indicators and mixed earnings call sentiment. The moderate valuation further supports a cautious outlook.

Positive Factors

Robust balance sheet and low leverage

A low debt-to-equity ratio (0.14) and a strong ROE (~20.5%) provide durable financial flexibility. This capital structure supports continued investment in product development and capacity, cushions cyclical housing downturns, and enables strategic actions like buybacks without overleveraging.

Product innovation driving sizable sales mix

New product introductions now represent a quarter of trailing sales, showing sustained innovation and successful commercialization. That durable shift diversifies revenue, reduces reliance on legacy SKUs, and supports premium pricing and higher lifetime customer value over multiple years.

Expanded manufacturing capacity improving efficiencies

A higher-performing Arkansas plastic processing and decking plant strengthens unit economics and capacity. Over the medium term this scale can lower per-unit costs, shorten lead times for customers, and support new product rollouts, underpinning sustainable margin and volume growth.

Negative Factors

Weak free cash flow growth and conversion

Negative free cash flow growth, despite operating cash roughly matching net income, signals persistent conversion issues—likely from capex, working capital, or investments. That limits long-term financial optionality for reinvestment, dividends, or buffering through downturns.

Projected gross margin pressure from mix and depreciation

A ~250bp expected gross margin hit from product mix shifts and Arkansas facility depreciation represents a structural headwind. If persistent, it compresses operating margins long-term unless offset by price, higher-margin SKUs, or further efficiency gains, pressuring profitability.

Eased consumer demand and missed revenue guidance

Lower-than-expected sell-through and a muted near-term outlook reflect softer end-market demand. If this trend endures, it can depress volumes across seasons, limit operating leverage benefits, and force higher marketing spend or price promotions that erode long-term margin recovery.

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 generates revenue primarily through the sales of its composite decking and railing products. The company has established a strong distribution network, including partnerships with retailers, lumberyards, and distributors, which helps to reach a broad customer base. Additionally, Trex benefits from a growing trend towards sustainable building materials, as its products are made from recycled wood and plastic. This eco-friendly positioning attracts environmentally conscious consumers. Trex also engages in marketing and promotional activities to bolster sales, and its reputation for quality helps to maintain customer loyalty and repeat business. Seasonal demand fluctuations, particularly in the spring and summer months, also play a role in revenue generation.

Trex Company Financial Statement Overview

Summary

Trex Company demonstrates strong financial health with solid profitability and a stable balance sheet. The income statement and balance sheet are commendable, but the cash flow statement indicates potential areas for improvement in cash conversion and free cash flow generation.

Income Statement

Trex Company shows a solid income statement with a consistent revenue growth rate of 4.57% in the TTM period. The gross profit margin is healthy at 39.47%, and the net profit margin is strong at 16.76%. However, there is a slight decline in margins compared to previous years, indicating potential cost pressures or pricing challenges.

Balance Sheet

The balance sheet is robust with a low debt-to-equity ratio of 0.14, indicating low leverage and financial stability. The return on equity is strong at 20.53%, reflecting efficient use of equity. The equity ratio is also solid, suggesting a strong capital structure.

Cash Flow

Cash flow analysis reveals a mixed picture. The operating cash flow to net income ratio is stable at 1.01, indicating good cash generation relative to net income. However, the free cash flow growth rate is negative, suggesting challenges in converting earnings into free cash flow. The free cash flow to net income ratio is decent at 0.70, but there is room for improvement.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	1.18B	1.15B	1.09B	1.11B	1.20B	880.83M
Gross Profit	466.04M	485.67M	452.41M	403.99M	460.50M	359.46M
EBITDA	329.43M	360.34M	326.39M	306.46M	356.83M	251.57M
Net Income	197.88M	226.39M	205.38M	184.63M	208.74M	175.63M
Balance Sheet
Total Assets	1.45B	1.32B	932.88M	933.71M	920.32M	770.49M
Cash, Cash Equivalents and Short-Term Investments	11.36M	1.29M	1.96M	12.32M	141.05M	121.70M
Total Debt	158.30M	255.38M	32.00M	253.46M	35.33M	35.29M
Total Liabilities	410.00M	474.16M	216.21M	415.36M	195.29M	181.96M
Stockholders Equity	1.04B	850.14M	716.67M	518.35M	725.03M	588.53M
Cash Flow
Free Cash Flow	198.99M	-92.71M	223.33M	39.99M	98.67M	14.47M
Operating Cash Flow	284.15M	143.93M	389.42M	216.22M	258.06M	187.29M
Investing Cash Flow	-273.30M	-236.53M	-166.09M	-168.88M	-158.04M	-170.66M
Financing Cash Flow	-12.34M	91.94M	-233.70M	-176.06M	-80.67M	-43.77M

Trex Company Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 41.42
• 50DMA: Positive
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TREX, the sentiment is Negative. The current price of 41.42 is above the 20-day moving average (MA) of 41.08, above the 50-day MA of 37.05, and below the 200-day MA of 51.34, indicating a neutral trend. The MACD of 1.36 indicates Positive momentum. The RSI at 57.11 is Neutral, neither overbought nor oversold. The STOCH value of 19.86 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for TREX.

Trex Company Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
AWI	79 Outperform	$7.92B	26.37	38.03%	0.66%	15.10%	23.35%
WMS	74 Outperform	$11.82B	26.14	27.09%	0.47%	2.48%	-6.92%
SSD	71 Outperform	$7.33B	21.65	17.82%	0.69%	4.26%	8.52%
TREX	67 Neutral	$4.44B	22.46	20.50%	―	0.10%	-15.99%
FBIN	67 Neutral	$6.50B	20.55	13.72%	1.91%	-3.78%	-24.77%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
AAON	61 Neutral	$7.43B	77.46	12.08%	0.53%	8.77%	-47.50%

Trex Company Corporate Events

Trex Company Appoints B. Andrew Rose to Board

On December 3, 2025, Trex Company, Inc. announced the appointment of B. Andrew Rose as a new independent member of its Board of Directors. Mr. Rose, who brings over 30 years of business leadership experience, will serve on the Audit and Compensation Committees. His appointment is part of Trex’s ongoing board refreshment efforts, and his expertise is expected to provide valuable insights as the company advances its strategy and capitalizes on long-term growth opportunities. Ronald Kaplan, a director since 2008, will retire and not seek re-election at the 2026 Annual Meeting.

The most recent analyst rating on (TREX) stock is a Hold with a $38.00 price target. To see the full list of analyst forecasts on Trex Company stock, see the TREX Stock Forecast page.