NYSE:TREX

Stock Analysis Report

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Executive Summary

Trex Company, Inc. manufactures and distributes wood and plastic composite products, and related accessories for residential and commercial decking, and railing applications in the United States.


Snowflake Analysis

Flawless balance sheet with solid track record.


Similar Companies

Share Price & News

How has Trex Company's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: TREX's share price has been volatile over the past 3 months.


Market Performance


7 Day Return

-1.0%

TREX

0%

US Building

0%

US Market


1 Year Return

78.0%

TREX

0%

US Building

0%

US Market

Return vs Industry: TREX exceeded the US Building industry which returned -8.8% over the past year.

Return vs Market: TREX exceeded the US Market which returned 5% over the past year.


Shareholder returns

TREXIndustryMarket
7 Day-1.0%0%0%
30 Day1.4%0%0%
90 Day72.1%0%0%
1 Year78.0%78.0%0%0%0%0%
3 Year269.7%269.7%0%0%0%0%
5 Year417.9%417.9%0%0%0%0%

Price Volatility Vs. Market

How volatile is Trex Company's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Trex Company undervalued compared to its fair value and its price relative to the market?

47.52x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: TREX ($126.75) is trading above our estimate of fair value ($91.8)

Significantly Below Fair Value: TREX is trading above our estimate of fair value.


Price To Earnings Ratio

PE vs Industry: TREX is poor value based on its PE Ratio (47.5x) compared to the Building industry average (19.1x).

PE vs Market: TREX is poor value based on its PE Ratio (47.5x) compared to the US market (16.5x).


Price to Earnings Growth Ratio

PEG Ratio: TREX is poor value based on its PEG Ratio (3.5x)


Price to Book Ratio

PB vs Industry: TREX is overvalued based on its PB Ratio (16.2x) compared to the US Building industry average (2.2x).


Next Steps

Future Growth

How is Trex Company forecast to perform in the next 1 to 3 years based on estimates from 12 analysts?

13.6%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: TREX's forecast earnings growth (13.6% per year) is above the savings rate (2.2%).

Earnings vs Market: TREX's earnings (13.6% per year) are forecast to grow slower than the US market (22.8% per year).

High Growth Earnings: TREX's earnings are forecast to grow, but not significantly.

Revenue vs Market: TREX's revenue (10.9% per year) is forecast to grow faster than the US market (9.3% per year).

High Growth Revenue: TREX's revenue (10.9% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: TREX's Return on Equity is forecast to be high in 3 years time (26.7%)


Next Steps

Past Performance

How has Trex Company performed over the past 5 years?

25.2%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: TREX has high quality earnings.

Growing Profit Margin: TREX's current net profit margins (20.3%) are higher than last year (18.6%).


Past Earnings Growth Analysis

Earnings Trend: TREX's earnings have grown significantly by 25.2% per year over the past 5 years.

Accelerating Growth: TREX's earnings growth over the past year (20.7%) is below its 5-year average (25.2% per year).

Earnings vs Industry: TREX earnings growth over the past year (20.7%) exceeded the Building industry -6.8%.


Return on Equity

High ROE: TREX's Return on Equity (34.4%) is considered high.


Next Steps

Financial Health

How is Trex Company's financial position?


Financial Position Analysis

Short Term Liabilities: TREX's short term assets ($321.9M) exceed its short term liabilities ($117.0M).

Long Term Liabilities: TREX's short term assets ($321.9M) exceed its long term liabilities ($62.2M).


Debt to Equity History and Analysis

Debt Level: TREX's debt to equity ratio (6.3%) is considered satisfactory.

Reducing Debt: TREX's debt to equity ratio has reduced from 62.9% to 6.3% over the past 5 years.

Debt Coverage: TREX's debt is well covered by operating cash flow (552.9%).

Interest Coverage: TREX earns more interest than it pays, so coverage of interest payments is not a concern.


Balance Sheet


Next Steps

Dividend

What is Trex Company current dividend yield, its reliability and sustainability?


Dividend Yield vs Market

Notable Dividend: Unable to evaluate TREX's dividend yield against the bottom 25% of dividend payers, as the company has not reported any recent payouts.

High Dividend: Unable to evaluate TREX's dividend yield against the top 25% of dividend payers, as the company has not reported any recent payouts.


Stability and Growth of Payments

Stable Dividend: Insufficient data to determine if TREX's dividends per share have been stable in the past.

Growing Dividend: Insufficient data to determine if TREX's dividend payments have been increasing.


Current Payout to Shareholders

Dividend Coverage: Insufficient data to calculate payout ratio to determine if its dividend payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: No need to calculate the sustainability of TREX's dividend in 3 years as they are not forecast to pay a notable one for the US market.


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

2.0yrs

Average management tenure


CEO

Bryan Fairbanks (50yo)

0.25

Tenure

US$1,281,793

Compensation

Mr. Bryan Horix Fairbanks serves as President and Chief Executive Officer of Trex Company, Inc. since April 29, 2020. He serves as Director of Trex Company, Inc. since April 29, 2020. Mr. Fairbanks served  ...


CEO Compensation Analysis

Compensation vs Market: Bryan's total compensation ($USD1.28M) is below average for companies of similar size in the US market ($USD7.33M).

Compensation vs Earnings: Bryan's compensation has been consistent with company performance over the past year.


Leadership Team

NamePositionTenureCompensationOwnership
Bryan Fairbanks
President0.25yrUS$1.28m0.025% $1.8m
William Gupp
Senior VP19.17yrsUS$1.18m0.057% $4.2m
Christopher Gerhard
Vice President of Sales8.08yrsUS$920.28k0.013% $943.0k
Adam Zambanini
President of Trex Residential Products2yrsUS$1.28m0.11% $8.0m
Dennis Schemm
VP & CFO0.25yrno data0.0028% $206.8k
S. Adkins
Vice President of Marketing2yrsno datano data
Jacob Rudolph
Vice President of Human Resources3.17yrsno datano data

2.0yrs

Average Tenure

50yo

Average Age

Experienced Management: TREX's management team is considered experienced (2 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Bryan Fairbanks
President0.25yrUS$1.28m0.025% $1.8m
Ronald Kaplan
Independent Vice Chairman0.25yrUS$245.00k0.010% $765.6k
Jay Gratz
Independent Director13.42yrsUS$188.75k0.021% $1.5m
Richard Posey
Independent Director11.17yrsUS$186.25k0.026% $1.9m
Patricia Robinson
Lead Independent Director1.5yrsUS$201.25k0.041% $3.0m
Michael Golden
Independent Director7.42yrsUS$186.25k0.010% $732.6k
Gerald Volas
Independent Director6.33yrsUS$181.25k0.016% $1.2m
Kristine Juster
Independent Director0.75yrUS$74.69k0.0016% $121.0k
James Cline
Chairman of the Board0.25yrUS$2.77m0.034% $2.5m

1.5yrs

Average Tenure

67yo

Average Age

Experienced Board: TREX's board of directors are not considered experienced ( 1.5 years average tenure), which suggests a new board.


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

Trex Company, Inc.'s company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Trex Company, Inc.
  • Ticker: TREX
  • Exchange: NYSE
  • Founded: 1996
  • Industry: Building Products
  • Sector: Capital Goods
  • Market Cap: US$7.333b
  • Shares outstanding: 57.85m
  • Website: https://www.trex.com

Number of Employees


Location

  • Trex Company, Inc.
  • 160 Exeter Drive
  • Winchester
  • Virginia
  • 22603-8605
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
TREXNYSE (New York Stock Exchange)YesCommon StockUSUSDApr 1999
TRRDB (Deutsche Boerse AG)YesCommon StockDEEURApr 1999

Biography

Trex Company, Inc. manufactures and distributes wood and plastic composite products, and related accessories for residential and commercial decking, and railing applications in the United States. It offers Trex Transcend, Trex Select, and Trex Enhance protective shells for protection against fading, staining, mold, and scratching; and Trex Hideaway, a hidden fastening system for grooved boards; and Trex DeckLighting, a LED dimmable deck lighting for use on posts, floors, and steps. The company also provides Trex Transcend Railing products used in Trex decking products and other decking materials; Trex Select Railing for simple clean finished look; Trex Enhance railing system; and Trex Signature aluminum railing for contemporary look. In addition, it offers Trex Seclusions fencing product, including structural posts, bottom and top rails, pickets, and decorative post caps; and Trex Elevations, a steel deck framing system. 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 CustomCurve that allows contractors to heat and bend Trex products; Trex Pergola, a cellular PVC product; Trex Latticeworks outdoor lattice boards; Trex Cornhole boards; Diablo Trex Blade, a saw blade for wood-plastic composite decking; Trex SpiralStairs and structural steel posts; Trex Outdoor Kitchens, Cabinetry, and Storage; and Trex Outdoor Fire & Water products. Additionally, it offers architectural and aluminum railing systems, and staging equipment and accessories. The company 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. The company was founded in 1996 and is headquartered in Winchester, Virginia. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/07/06 23:55
End of Day Share Price2020/07/06 00:00
Earnings2020/03/31
Annual Earnings2019/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.