Trex (NYSE:TREX) Announces Quarterly Earnings Results

Trex (NYSE:TREX) announced its quarterly earnings data on Tuesday. The construction company reported $0.62 earnings per share for the quarter, missing the consensus estimate of $0.63 by ($0.01), FiscalAI reports. Trex had a net margin of 14.68% and a return on equity of 18.03%. The company had revenue of $418.02 million during the quarter, compared to the consensus estimate of $415.71 million. During the same quarter in the previous year, the firm posted $0.71 EPS. The business’s revenue for the quarter was up 7.8% compared to the same quarter last year.

Here are the key takeaways from Trex’s conference call:

• Second-quarter net sales rose 8% to $418 million, exceeding expectations, with broad-based strength across products, channels, and price points. Sell-through remained healthy and demand accelerated through May and June, continuing into the third quarter.
• Trex raised its full-year 2026 guidance, including adjusted gross margin of approximately 38%, and authorized up to an additional $150 million in share repurchases. Strong quarterly free cash flow of $182 million also enabled $130 million of debt repayment.
• The company accelerated the Little Rock plant’s decking ramp by more than six months, with roughly half of its lines expected to be in production by year-end. Management expects the facility to become margin-accretive as utilization rises, with most benefits arriving in 2027 and beyond.
• Trex sees substantial growth potential from converting wood decking customers and replacing tertiary brands, citing more than $100 million of tertiary-brand business across its distribution network and approximately $80 million of opportunity for every 1% of wood-decking share gained.
• Second-quarter gross margin fell to 37.9% due to unfavorable product mix, Little Rock depreciation, and more than 100 basis points of temporary manufacturing inefficiencies from rapidly increasing production. Management also included geopolitical uncertainty in its outlook, making demand and mix the key swing factors for reaching the high or low end of its EBITDA guidance.

Trex Stock Down 2.3%

Shares of Trex stock opened at $48.45 on Thursday. The business has a 50 day moving average of $45.23 and a 200 day moving average of $41.85. Trex has a 52 week low of $29.77 and a 52 week high of $66.06. The company has a market cap of $5.03 billion, a PE ratio of 28.95, a P/E/G ratio of 5.40 and a beta of 1.48.

Analyst Upgrades and Downgrades

Several research analysts recently commented on the stock. Stephens lifted their target price on shares of Trex from $45.00 to $50.00 and gave the stock an “equal weight” rating in a research note on Tuesday, July 28th. BMO Capital Markets set a $57.00 price target on shares of Trex in a report on Wednesday. Zacks Research upgraded shares of Trex from a “hold” rating to a “strong-buy” rating in a research report on Wednesday, July 15th. Truist Financial upped their price objective on shares of Trex from $55.00 to $60.00 and gave the company a “buy” rating in a research note on Tuesday, July 14th. Finally, Bank of America increased their target price on shares of Trex from $42.00 to $44.00 and gave the stock an “underperform” rating in a report on Tuesday, July 14th. One equities research analyst has rated the stock with a Strong Buy rating, ten have given a Buy rating, nine have issued a Hold rating and two have given a Sell rating to the stock. According to data from MarketBeat.com, the company presently has an average rating of “Hold” and a consensus target price of $49.20.

Insiders Place Their Bets

In other Trex news, SVP Jacob T. Rudolph sold 1,400 shares of the business’s stock in a transaction on Thursday, June 25th. The shares were sold at an average price of $50.00, for a total transaction of $70,000.00. Following the transaction, the senior vice president directly owned 36,631 shares of the company’s stock, valued at approximately $1,831,550. The trade was a 3.68% decrease in their position. The sale was disclosed in a document filed with the Securities & Exchange Commission, which can be accessed through the SEC website. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. 0.93% of the stock is currently owned by company insiders.

Institutional Investors Weigh In On Trex

Several institutional investors and hedge funds have recently modified their holdings of TREX. Empowered Funds LLC purchased a new position in shares of Trex during the fourth quarter valued at about $50,000. Kestra Advisory Services LLC purchased a new stake in Trex in the fourth quarter worth about $67,000. UMB Bank n.a. boosted its position in Trex by 70.2% during the 4th quarter. UMB Bank n.a. now owns 2,185 shares of the construction company’s stock valued at $77,000 after acquiring an additional 901 shares in the last quarter. Smartleaf Asset Management LLC boosted its position in Trex by 1,120.1% during the 2nd quarter. Smartleaf Asset Management LLC now owns 2,245 shares of the construction company’s stock valued at $123,000 after acquiring an additional 2,061 shares in the last quarter. Finally, Voleon Capital Management LP purchased a new position in shares of Trex during the 2nd quarter worth approximately $203,000. 95.96% of the stock is owned by hedge funds and other institutional investors.

About Trex

Trex Company, Inc is a leading manufacturer of wood-alternative decking and railing systems designed for residential and commercial outdoor living environments. The company’s core offerings feature composite decking products made from a proprietary blend of recycled wood fibers and plastic film, which deliver enhanced durability, resistance to rot and insect damage, and low maintenance compared to traditional wood. Trex also provides matching railing, lighting, fencing and cladding solutions that allow customers to create cohesive, high-performance outdoor spaces.

Trex’s product portfolio is organized into multiple performance tiers, including premium, mid-range and value-oriented lines.