Exploring Trex Co's Earnings Expectations

Trex Co TREX is set to give its latest quarterly earnings report on Monday, 2024-10-28. Here's what investors need to know before the announcement.

Analysts estimate that Trex Co will report an earnings per share (EPS) of $0.32.

Anticipation surrounds Trex Co's announcement, with investors hoping to hear about both surpassing estimates and receiving positive guidance for the next quarter.

New investors should understand that while earnings performance is important, market reactions are often driven by guidance.

Performance in Previous Earnings

In the previous earnings release, the company beat EPS by $0.02, leading to a 21.54% drop in the share price the following trading session.

Here's a look at Trex Co's past performance and the resulting price change:

Market Performance of Trex Co's Stock

Shares of Trex Co were trading at $64.14 as of October 24. Over the last 52-week period, shares are up 16.82%. Given that these returns are generally positive, long-term shareholders are likely bullish going into this earnings release.

Analyst Observations about Trex Co

Understanding market sentiments and expectations within the industry is crucial for investors. This analysis delves into the latest insights on Trex Co.

The consensus rating for Trex Co is Neutral, derived from 13 analyst ratings. An average one-year price target of $79.54 implies a potential 24.01% upside.

Analyzing Analyst Ratings Among Peers

In this analysis, we delve into the analyst ratings and average 1-year price targets of Simpson Manufacturing Co, Zurn Elkay Water and AZEK Co, three key industry players, offering insights into their relative performance expectations and market positioning.

• The consensus among analysts is an Outperform trajectory for Simpson Manufacturing Co, with an average 1-year price target of $218.0, indicating a potential 239.88% upside.
• The consensus among analysts is an Outperform trajectory for Zurn Elkay Water, with an average 1-year price target of $37.5, indicating a potential 41.53% downside.
• AZEK Co is maintaining an Neutral status according to analysts, with an average 1-year price target of $48.44, indicating a potential 24.48% downside.

Snapshot: Peer Analysis

The peer analysis summary provides a snapshot of key metrics for Simpson Manufacturing Co, Zurn Elkay Water and AZEK Co, illuminating their respective standings within the industry. These metrics offer valuable insights into their market positions and comparative performance.

Key Takeaway:

Trex Co ranks highest in revenue growth among its peers. It also leads in gross profit margin. However, it has the lowest return on equity compared to its peers.

About Trex Co

Trex Co Inc is a manufacturer of wooden alternative decking products. The company offers outdoor products in the decking, railing, porch, fencing, trim, steel deck framing, and outdoor lighting categories. Its products are sold under the Trex brand and manufactured in the United States. Further, the company licenses its Trex brand to third parties to manufacture and sell products under the Trex trademark. The distribution is focused on wholesale distributors and retail lumber dealers, which in turn sell Trex products to homeowners and contractors, with an emphasis on professional contractors, remodelers, and homebuilders. The company operates in one reportable segment i.e. Trex Residential.

Trex Co's Financial Performance

Market Capitalization: With restricted market capitalization, the company is positioned below industry averages. This reflects a smaller scale relative to peers.

Positive Revenue Trend: Examining Trex Co's financials over 3 months reveals a positive narrative. The company achieved a noteworthy revenue growth rate of 5.59% as of 30 June, 2024, showcasing a substantial increase in top-line earnings. As compared to competitors, the company surpassed expectations with a growth rate higher than the average among peers in the Industrials sector.

Net Margin: Trex Co's financial strength is reflected in its exceptional net margin, which exceeds industry averages. With a remarkable net margin of 23.11%, the company showcases strong profitability and effective cost management.

Return on Equity (ROE): Trex Co's financial strength is reflected in its exceptional ROE, which exceeds industry averages. With a remarkable ROE of 10.24%, the company showcases efficient use of equity capital and strong financial health.

Return on Assets (ROA): Trex Co's ROA stands out, surpassing industry averages. With an impressive ROA of 6.79%, the company demonstrates effective utilization of assets and strong financial performance.

Debt Management: Trex Co's debt-to-equity ratio is below the industry average at 0.11, reflecting a lower dependency on debt financing and a more conservative financial approach.

To track all earnings releases for Trex Co visit their earnings calendar on our site.

This article was generated by Benzinga's automated content engine and reviewed by an editor.