Trex Company, Inc. (NYSE:TREX) released its earnings results on October 10, 2023, revealing earnings per share (EPS) of $0.51 for the quarter. This figure fell short of analysts’ expectations, which had anticipated $0.57, resulting in a miss of $0.06 per share, according to Zacks Investment Research. The construction company reported a return on equity of 21.27% and a net margin of 16.53%.
In light of the latest earnings, Trex adjusted its full-year 2025 guidance for EPS, along with its fourth-quarter guidance for the same year. This revision indicates the company’s response to current market conditions and operational performance.
Stock Performance and Trading Activity
On the trading floor, Trex shares experienced a decline, dropping $0.90 to reach $47.04 during midday trading on the day of the earnings announcement. A total of 3,272,964 shares changed hands, significantly surpassing the average volume of 1,641,404 shares. The company currently boasts a market capitalization of $5.04 billion, with a price-to-earnings (P/E) ratio of 27.19, a PEG ratio of 2.02, and a beta of 1.49. Over the past year, Trex has seen its stock fluctuate between a low of $46.31 and a high of $80.74.
Insider trading activity also emerged as significant, with Senior Vice President Amy M. Fernandez selling 1,538 shares on August 6, 2023, for an average price of $64.18. This transaction totaled $98,708.84, reducing her holdings to 22,953 shares valued at approximately $1,473,123.54. Following the sale, insiders hold 0.71% of Trex stock.
Analysts’ Perspectives and Future Outlook
Market analysts have responded to Trex’s latest earnings release with mixed sentiments. The Goldman Sachs Group recently lowered its price target for Trex from $83.00 to $73.00, maintaining a “buy” rating. Conversely, Wall Street Zen upgraded Trex from a “sell” to a “hold” rating.
Additionally, Zelman & Associates revised their price objective for Trex from $74.00 to $66.00, labeling the stock as an “outperform.” B. Riley upgraded Trex to a “strong-buy” rating, while DA Davidson set a price target of $60.00 and assigned a “neutral” rating.
Overall, Trex has received two “Strong Buy” ratings, ten “Buy” ratings, eight “Hold” ratings, and two “Sell” ratings. According to data from MarketBeat, the consensus recommendation for Trex is a “Moderate Buy,” with an average price target of $70.71.
Trex Company, Inc. is recognized for manufacturing and distributing composite decking, railing, and various outdoor living products and accessories for both residential and commercial markets across the United States. Its product lineup includes Trex Transcend, Trex Select, Trex Signature, Trex Transcend Lineage, and Trex Enhance, all designed to resist fading, staining, mold, and scratching.
As Trex navigates this challenging financial quarter, market observers will be keen to see how the company adapts its strategies to regain investor confidence and meet future financial targets.
