NYSE:TREX

Stock Analysis Report

Executive Summary

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

Snowflake

Fundamentals

Flawless balance sheet with reasonable growth potential.


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


Market Performance


7 Day Return

3.6%

TREX

2.4%

US Building

3.4%

US Market


1 Year Return

34.9%

TREX

14.2%

US Building

5.4%

US Market

Return vs Industry: TREX exceeded the US Building industry which returned 14.2% over the past year.

Return vs Market: TREX exceeded the US Market which returned 5.4% over the past year.


Shareholder returns

TREXIndustryMarket
7 Day3.6%2.4%3.4%
30 Day2.7%-0.4%-1.0%
90 Day28.8%3.8%-0.4%
1 Year34.9%34.9%16.0%14.2%7.7%5.4%
3 Year210.9%210.9%28.3%17.5%46.2%36.8%
5 Year420.4%420.4%62.2%42.5%65.6%47.5%

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?

43.89x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Undervalued: TREX ($91.31) is trading above our estimate of fair value ($79.98)

Significantly Undervalued: 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 (43.9x) compared to the Building industry average (20x).

PE vs Market: TREX is poor value based on its PE Ratio (43.9x) compared to the US market (17.7x).


Price to Earnings Growth Ratio

Low PEG Ratio: TREX is poor value based on its PEG Ratio (2.5x)


Price to Book Ratio

PB vs Industry: TREX is overvalued based on its PB Ratio (13.6x) 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 11 analysts?

17.9%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: TREX's forecast earnings growth (17.9% per year) is above the savings rate (2.7%).

Earnings vs Market: TREX's earnings (17.9% per year) are forecast to grow faster than the US market (14.3% per year).

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

Revenue vs Market: TREX's revenue (10.4% per year) is forecast to grow faster than the US market (7.3% per year).

High Growth Revenue: TREX's revenue (10.4% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

High Future ROE: TREX's Return on Equity is forecast to be high in 3 years time (24.7%)


Next Steps

Past Performance

How has Trex Company performed over the past 5 years?

26.8%

Historical annual earnings growth


Earnings and Revenue History


Past Earnings Growth Analysis

Earnings Trend: TREX's earnings have grown significantly by 26.8% per year over the past 5 years.

Accelerating Growth: TREX's earnings growth over the past year (3%) is below its 5-year average (26.8% per year).

Earnings vs Industry: TREX earnings growth over the past year (3%) underperformed the Building industry 7.7%.


Return on Equity

High ROE: TREX's Return on Equity (31.1%) is considered high.


Return on Assets

ROA vs Industry: TREX has a higher Return on Assets than the Building industry average last year.


Return on Capital Employed

ROCE Improving: TREX's Return on Capital Employed has declined over the past 3 years.


Next Steps

Financial Health

How is Trex Company's financial position?


Financial Position Analysis

Short Term Liabilities: TREX's short term assets ($286.2M) exceeds its short term liabilities ($81.5M)

Long Term Liabilities: TREX's short term assets (286.2M) exceeds its long term liabilities (63.2M)


Debt to Equity History and Analysis

Debt Level: TREX is debt free.

Reducing Debt: TREX has no debt compared to 5 years ago when its debt to equity ratio was 35.8%.

Debt Coverage: TREX has no debt, therefore it does not need to be covered by operating cash flow.

Interest Coverage: TREX has no debt, therefore coverage of interest payments is not a concern.


Balance Sheet

Inventory Level: TREX has a high level of physical assets or inventory.

Debt Coverage by Assets: Insufficient data to determine if TREX's debt is covered by short term assets.


Next Steps

Dividend

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


Dividend Yield vs Market

companyn/amarketbottom25%1.5%markettop25%3.8%industryaverage1.8%forecastin3Years0%

Current dividend yield vs market & industry


Stability and Growth of Payments

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

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

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

What is the CEO of Trex Company's salary, the management and board of directors tenure and is there insider trading?

3.3yrs

Average management tenure


CEO

Jim Cline (67yo)

4.2yrs

Tenure

US$2,635,610

Compensation

Mr. James E. Cline, also known as Jim, serves as Non-Executive Director at Latham Pool Products since July 2019. Mr. Cline has been the President and Chief Executive Officer of Trex Co. Inc. since August 1 ...


CEO Compensation Analysis

Compensation vs. Market: Jim's total compensation ($USD2.64M) is below average for companies of similar size in the US market ($USD6.81M).

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


Management Age and Tenure

3.3yrs

Average Tenure

51yo

Average Age

Experienced Management: TREX's management team is considered experienced (3.3 years average tenure).


Board Age and Tenure

9.4yrs

Average Tenure

66yo

Average Age

Experienced Board: TREX's board of directors are considered experienced (9.4 years average tenure).


Insider Trading

Insider Buying: TREX insiders have only sold shares in the past 3 months.


Recent Insider Transactions

SellUS$788,61208 Aug 19
Christopher Gerhard
EntityIndividual
Role
Head of Sales
Vice President of Sales
Shares9,724
Max PriceUS$81.10
SellUS$1,761,75126 Jun 19
Jay Scripter
EntityIndividual
Shares25,476
Max PriceUS$69.19
BuyUS$4,13804 Jan 19
Jay Scripter
EntityIndividual
Shares82
Max PriceUS$50.46

Ownership Breakdown


Management Team

  • John Lewis (53yo)

    President & CEO of Trex Commercial Products Inc

    • Tenure: 2yrs
  • Jim Cline (67yo)

    President

    • Tenure: 4.2yrs
    • Compensation: US$2.64m
  • William Gupp (59yo)

    Senior VP

    • Tenure: 18.4yrs
    • Compensation: US$1.24m
  • Adam Zambanini (42yo)

    President of Trex Residential Products

    • Tenure: 1.3yrs
    • Compensation: US$1.01m
  • Christopher Gerhard (46yo)

    Vice President of Sales

    • Tenure: 7.3yrs
    • Compensation: US$885.78k
  • Bryan Fairbanks (49yo)

    Executive VP & CFO

    • Tenure: 4.2yrs
    • Compensation: US$1.09m
  • Jacob Rudolph

    Vice President of Human Resources

    • Tenure: 2.4yrs
  • S. Adkins

    Vice President of Marketing

    • Tenure: 1.3yrs
  • Viktoriia Nakhla

    AdvisIRy Partner

    • Tenure: 0yrs

Board Members

  • Ron Kaplan (68yo)

    Chairman of the Board

    • Tenure: 9.4yrs
    • Compensation: US$180.00k
  • Jay Gratz (66yo)

    Independent Director

    • Tenure: 12.7yrs
    • Compensation: US$138.00k
  • Dick Posey (72yo)

    Independent Director

    • Tenure: 10.4yrs
    • Compensation: US$136.50k
  • Patricia Robinson (66yo)

    Independent Director

    • Tenure: 18.9yrs
    • Compensation: US$148.83k
  • Michael Golden (65yo)

    Independent Director

    • Tenure: 6.7yrs
    • Compensation: US$134.67k
  • Jerry Volas (64yo)

    Independent Director

    • Tenure: 5.6yrs
    • Compensation: US$134.50k
  • Kristine Juster (56yo)

    Director

    • Tenure: 0yrs
  • Jim Cline (67yo)

    President

    • Tenure: 4.2yrs
    • Compensation: US$2.64m

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$5.335b
  • Shares outstanding: 58.42m
  • Website: https://www.trex.com

Number of Employees


Location

  • Trex Company, Inc.
  • 160 Exeter Drive
  • Winchester
  • Virginia
  • 22603
  • 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/plastic composite products, and related accessories primarily for the residential and commercial decking, and railing applications in the United States. ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/10/15 23:45
End of Day Share Price2019/10/15 00:00
Earnings2019/06/30
Annual Earnings2018/12/31


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.