# Trex Company (TREX.US)

Canonical: https://gigainvestors.com/s/TREX

Analysis as of: 2026-10-16T07:32:29.223Z. Financial observations: FY1996–FY2026.

Listing currency: USD. Reporting currency: USD.

## Verdict

Not a wonderful business

Quality tests for Buy: not passed (profit record: pass; earnings resilience is evidence only). Published buy qualification: no.

Share price: $46.21 per share; close as of 2026-10-15.

Estimated value: low $8.71 per share, central $9.92 per share, high $11.52 per share. Buy at or below the central value $9.92 per share. Valuation as of 2026-10-16T07:32:29.223Z; scenarios are not confidence intervals.

Expected annual return: 4.5% at the stated quote. About 4.5% a year at today's price (required return 10.0%). required return 10.0% a year (10% floor; US 10-year bond 5.1% + 4 points).

## Checklist

### understandable: pass

- 2 revenue declines in the last 10 years (informational)

- Financial history: 10 years

- Years with declining revenue: 2

- Years with a net loss: 0

- Operating margin variation: 0.09×

Chart: Operating margin; fiscal year observations.

- FY2017: 0.25×

- FY2018: 0.26×

- FY2019: 0.25×

- FY2020: 0.27×

- FY2021: 0.23×

- FY2022: 0.22×

- FY2023: 0.25×

- FY2024: 0.27×

- FY2025: 0.22×

- LTM to Jun 2026: 0.20×

### moat: pass

- ROIC, median of available years: 37.6%

- ROIC, second-lowest year: 20.3%

- Typical minus recent gross margin: 1.8 pp

- Typical gross margin (annual median): 41.0%

- Recent gross margin (lower of latest and 3-year median): 39.2%

- Years with nonpositive capital: 0

- Capital spending / revenue: 14.2%

- ROIC including acquisitions, ten-year median: 19.8%

Chart: ROIC excluding acquisitions; fiscal year observations.

- FY2016: 65.3%

- FY2017: 53.6%

- FY2018: 60.3%

- FY2019: 52.6%

- FY2020: 40.3%

- FY2021: 34.9%

- FY2022: 23.9%

- FY2023: 27.1%

- FY2024: 20.3%

- FY2025: 15.3%

### economics: fail

- owner earnings cash conversion below threshold

- Owner earnings / net income, 5-yr: 0.43×

- Cash conversion uses consolidated totals: No

- Owner earnings, five-year total: $433M

- Net income, five-year total: $1.0B

- Return on incremental invested capital: 12.2%

- Working capital / revenue, annual change: 0.4 pp

- Working capital / revenue, change between three-year averages: 1.3 pp

- Working capital / revenue, final three-year average: 18.1%

Chart: Annual owner cash / profit; fiscal year observations.

- FY2021: 0.85×

- FY2022: 0.29×

- FY2023: 0.44×

- FY2024: 0.34×

- FY2025: 0.19×

### management: pass

- Historical market-dollar context (not the management verdict): 2016 to 2025 (9 years)

- potential debt-funded buybacks (informational)

- buybacks leaned toward cheaper years (informational)

- ROIC first 3 years vs last 3 years: 60.3% vs 20.3%

- Per-share earnings: 0.76 to 1.89 (three-year endpoint medians)

- Management verdict uses per-share economic progress: Yes

- Ordinary dilution, 10-year annual growth: 5.4%

- Ordinary dilution, 5-year annual growth: -1.6%

- Market cap gain: -$105M

- Cumulative retained earnings: $1.6B

- Diluted shares, 10-year annual growth: 5.4%

- Diluted shares, 5-year annual growth: -1.6%

- $1 test, starting fiscal year: FY2016

- $1 test, ending fiscal year: FY2025

- Per-share value growth: 12.1%

- Per-share value change: $1.13

- Per-share value, starting three-year median: $0.76

- Per-share value, ending three-year median: $1.89

- Buybacks concentrated in cheaper years (correlation): 0.66

- Average buyback yield: 1.6%

- Buyback history: 10 years

- Debt-funded buybacks: Yes

- Acquisition spending: $160M

- Cumulative net income, 10 years: $1.6B

- ROIC, first three-year median: 60.3%

- ROIC, last three-year median: 20.3%

Chart: Earnings per share; fiscal year observations.

- FY2016: $0.57

- FY2017: $0.80

- FY2018: $1.14

- FY2019: $1.23

- FY2020: $1.51

- FY2021: $1.80

- FY2022: $1.65

- FY2023: $1.89

- FY2024: $2.09

- FY2025: $1.78

### accounting: pass

- Sloan accruals: -11.2%

- Receivables to sales index (DSRI): 0.56×

- Restructuring years, last five: 1

- Stock compensation / operating cash flow: 2.5%

- Earnings backed by cash: Yes

- Operating cash / earnings: 1.88×

- Accounting red flags: 0

- Goodwill and intangibles / equity: 0.03×

Chart: Sloan accruals; fiscal year observations.

- FY2016: -7.9%

- FY2017: -2.1%

- FY2018: -0.8%

- FY2019: -2.0%

- FY2020: -1.5%

- FY2021: -5.4%

- FY2022: -3.4%

- FY2023: -19.7%

- FY2024: 6.2%

- FY2025: -11.2%

## Holders

- [Andrew Adams](https://gigainvestors.com/MPF): tracked 13F investor; follow the investor page for holding quarter and amounts.

- [Arnold Van Den Berg](https://gigainvestors.com/VAN): tracked 13F investor; follow the investor page for holding quarter and amounts.

## Price story

Down 66% since Dec 2021 · "Next quarter’s revenue guidance of $145 million underwhelmed, coming in 27.1% below analysts’ estimates." (finance.yahoo.com, Nov 2025) · sales +2.9%

Story as of 2026-10-16T09:59:42.995Z; price observation 2026-10-15.

Price needs cash profits to grow 20.6% a year for ten years

- 2025-08-04: Trex's shares fall on Q2 results as margins narrow, outlook disappoints ([seekingalpha.com](https://seekingalpha.com/news/4477982-trexs-shares-fall-on-q2-results-as-margins-narrow-outlook-disappoints?utm_source=feed_news_all&utm_medium=referral&feed_item_type=news))

- 2025-11-04: Trex (NYSE:TREX) Misses Q3 Sales Expectations, Stock Drops 13.3% ([finance.yahoo.com](https://finance.yahoo.com/news/trex-nyse-trex-misses-q3-211922190.html))

### Sales · FY2025–2026

sales +2.9%; source https://www.sec.gov/Archives/edgar/data/1069878/000119312526068732/trex-20251231.htm; observed 2026-02-25.

- FY2017: $565M 

- FY2018: $684M 

- FY2019: $745M 

- FY2020: $881M 

- FY2021: $1.2B 

- FY2022: $1.1B 

- FY2023: $1.1B 

- FY2024: $1.2B 

- FY2025: $1.2B 

- FY2026: $1.2B 

### Gross margin · FY2025

gross margin 39.2%; source https://www.sec.gov/Archives/edgar/data/1069878/000119312526068732/trex-20251231.htm; observed 2026-02-25.

- FY2016: 39.0% 

- FY2017: 43.1% 

- FY2018: 43.1% 

- FY2019: 41.1% 

- FY2020: 40.8% 

- FY2021: 38.5% 

- FY2022: 36.5% 

- FY2023: 41.3% 

- FY2024: 42.2% 

- FY2025: 39.2% 

## Owner memo

Memo as of 2026-10-16T08:06:05.509Z.

### How it makes money

Operates in building products & equipment; annual sales are USD 1.2 billion.

- Source: https://www.sec.gov/Archives/edgar/data/1069878/000119312526068732/trex-20251231.htm (filed 2026-02-25); FY2025: revenue 1174267000; grossProfit 459964000; margin = grossProfit / revenue.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16); TREX.US: Trex Company, Inc. manufactures and sells composite decking and railing products in the United States. It offers decking products and accessories that can be used for protection against fading, staining, mold, and scratching, including Trex Transcend, which are decking products that can also be used as cladding; Trex Signature; Trex Transcend Lineage; Trex Select; Trex Enhance; Trex Hideaway fastener collection; and Trex DeckLighting, an outdoor lighting system that includes a post cap, deck rail, riser, a soffit, and a recessed deck lights. The company also offers railing products, such as Trex Signature X-Series Railing, Trex Signature aluminum railing, Trex Transcend Railing, Trex Select Railing, Trex Select T-Rail, Trex Enhance Railing; and fencing products, which includes Trex Seclusions that consists of structural posts, bottom rails, pickets, top rails, and decorative post caps. In addition, it 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 Protect joist, beam and rim tape, a self-adhesive butyl tape that protects wooden deck framing/substructure elements; Trex RainEscape Soffit Light, a plug-and-play LED Soffit light that is installed in the under-deck ceiling of a two-story deck; Trex Seal Ledger Flashing Tape, butyl flashing tape with an aluminum liner; Trex Pergola, Pergolas made from low maintenance aluminum  reinforced cellular PVC; Trex Lattice outdoor boards; Trex Cornhole boards; Trex Blade, a specialty saw blade for wood-alternative composite decking; Trex SpiralStairs; and Trex Outdoor Kitchen cabinetry. The company sells its products through wholesale distributors, retail lumber dealers, and Home Depot and Lowe's stores. Trex Company, Inc. was founded in 1996 and is headquartered in Winchester, Virginia.

### Why customers stay

Margins ranged from 39.2% to 42.2% during 2023–25; it earns 37.6% on its capital.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-25); FY2023: grossProfit / revenue = 41.3%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-25); FY2024: grossProfit / revenue = 42.2%.

- Source: https://www.sec.gov/Archives/edgar/data/1069878/000119312526068732/trex-20251231.htm (filed 2026-02-25); FY2025: grossProfit / revenue = 39.2%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-25); 10-year return on capital observations [[2016,0.6533929586368952],[2017,0.5358468729512645],[2018,0.6026067980413891],[2019,0.5256614096769322],[2020,0.4032763683101694],[2021,0.34902317368217045],[2022,0.23921449538102618],[2023,0.2711593057746578],[2024,0.20281456938927422],[2025,0.152901282053341]]; median 0.3761497709961699. ROIC follows the displayed moat series; financial companies use return on tangible equity.

### Where the cash goes

Spends 44.2% of cash earnings on expansion; earns 12.2% on new investment.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-25); FY2016: growth capex 53000; upkeep 14498000; owner earnings 67847000. Growth capex / owner earnings = 0.000781169395846537.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-25); FY2017: growth capex 0; upkeep 15040000; cash acquisitions 71804000; owner earnings 96948000. Growth capex plus acquisitions / owner earnings = 0.7406444691999835.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-25); FY2018: growth capex 17219000; upkeep 16597000; owner earnings 134572000. Growth capex / owner earnings = 0.1279538091133371.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-25); FY2019: growth capex 13215408.507824436; upkeep 54049591.492175564; owner earnings 104719408.50782444. Growth capex / owner earnings = 0.1261982730435018.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-25); FY2020: growth capex 34512036.35671252; upkeep 138310963.64328748; owner earnings 55259036.35671252. Growth capex / owner earnings = 0.6245500941045675.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-25); FY2021: growth capex 93053552.86035006; upkeep 66340447.13964994; owner earnings 178342552.86035007. Growth capex / owner earnings = 0.5217686489730525.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-25); FY2022: growth capex 0; upkeep 176228000; owner earnings 52696000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-25); FY2023: growth capex 0; upkeep 166089000; owner earnings 89484000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-25); FY2024: growth capex 33001173.48754224; upkeep 203639826.51245776; owner earnings 77422173.48754224. Growth capex / owner earnings = 0.4262496388434814.

- Source: https://www.sec.gov/Archives/edgar/data/1069878/000119312526068732/trex-20251231.htm (filed 2026-02-25); FY2025: growth capex 15663860.86086458; upkeep 217911139.13913542; owner earnings 35460860.86086458. Growth capex / owner earnings = 0.44172252112896604.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-25); Incremental return on capital 0.12195175240071586, from the economics test's unchanged annual inputs.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-25); Dividend observations: [[2016,0],[2017,0],[2018,0],[2019,1089000],[2020,1446000],[2021,1800000],[2022,1742000],[2023,30000],[2024,0],[2025,0]]. Zero only counted when supported by a complete cash-flow statement.

- Source: https://www.sec.gov/Archives/edgar/data/1069878/000119312526068732/trex-20251231.htm (filed 2026-02-25); FY2025: cash repurchases 54472000 USD.

### Are managers owners

Insiders own 0.9% of the company.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16); TREX.US SharesStats.PercentInsiders = 0.882 percentage points; cache date 2026-10-16.

### What could break it

Tariffs account for less than 5% of our cost of sales.

- Source: https://www.sec.gov/Archives/edgar/data/1069878/000119312526068732/trex-20251231.htm (filed 2026-02-25); Manufacturing costs consist of costs of depreciation, utilities, maintenance supplies and repairs, indirect labor, including wages and benefits, and warehouse and equipment rental activities. Tariffs account for less than 5% of our cost of sales. The majority of the tariffs are related to purchases of aluminum and steel used in our railing and fastening products.

### What the price says

The price assumes cash profits grow 20.6% yearly over ten years; actual decline was 8%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-25); Ten-year compound average after fade. Initial solved rate 0.2860771167529762. Price 46.21; FX 1; discount 0.1; same standard ten-year fade to terminal 0.03. FY2015 owner earnings/share 0.7590623583504703 → FY2025 0.3311129124940387. Closing-price date 2026-10-15.

## Monthly share-price history (USD per share)

- 2016-10: $26.91 per share

- 2016-11: $32.90 per share

- 2016-12: $32.20 per share

- 2017-01: $33.87 per share

- 2017-02: $34.01 per share

- 2017-03: $34.70 per share

- 2017-04: $36.60 per share

- 2017-05: $32.14 per share

- 2017-06: $33.83 per share

- 2017-07: $37.61 per share

- 2017-08: $38.00 per share

- 2017-09: $45.04 per share

- 2017-10: $54.73 per share

- 2017-11: $58.88 per share

- 2017-12: $54.20 per share

- 2018-01: $55.80 per share

- 2018-02: $51.70 per share

- 2018-03: $54.39 per share

- 2018-04: $51.94 per share

- 2018-05: $58.92 per share

- 2018-06: $31.30 per share

- 2018-07: $38.87 per share

- 2018-08: $42.35 per share

- 2018-09: $38.49 per share

- 2018-10: $30.65 per share

- 2018-11: $31.87 per share

- 2018-12: $29.68 per share

- 2019-01: $34.88 per share

- 2019-02: $37.48 per share

- 2019-03: $30.76 per share

- 2019-04: $34.64 per share

- 2019-05: $29.91 per share

- 2019-06: $35.85 per share

- 2019-07: $40.88 per share

- 2019-08: $42.77 per share

- 2019-09: $45.47 per share

- 2019-10: $43.95 per share

- 2019-11: $43.03 per share

- 2019-12: $44.94 per share

- 2020-01: $49.12 per share

- 2020-02: $47.83 per share

- 2020-03: $40.07 per share

- 2020-04: $47.61 per share

- 2020-05: $60.06 per share

- 2020-06: $65.04 per share

- 2020-07: $69.67 per share

- 2020-08: $74.75 per share

- 2020-09: $71.60 per share

- 2020-10: $69.54 per share

- 2020-11: $74.82 per share

- 2020-12: $83.72 per share

- 2021-01: $91.77 per share

- 2021-02: $91.64 per share

- 2021-03: $91.54 per share

- 2021-04: $107.99 per share

- 2021-05: $97.41 per share

- 2021-06: $102.21 per share

- 2021-07: $97.10 per share

- 2021-08: $109.76 per share

- 2021-09: $101.93 per share

- 2021-10: $106.40 per share

- 2021-11: $132.77 per share

- 2021-12: $135.03 per share

- 2022-01: $91.47 per share

- 2022-02: $91.84 per share

- 2022-03: $65.33 per share

- 2022-04: $58.19 per share

- 2022-05: $63.72 per share

- 2022-06: $54.42 per share

- 2022-07: $64.52 per share

- 2022-08: $46.79 per share

- 2022-09: $43.94 per share

- 2022-10: $48.09 per share

- 2022-11: $45.89 per share

- 2022-12: $42.33 per share

- 2023-01: $52.72 per share

- 2023-02: $51.13 per share

- 2023-03: $48.67 per share

- 2023-04: $54.66 per share

- 2023-05: $51.35 per share

- 2023-06: $65.56 per share

- 2023-07: $69.14 per share

- 2023-08: $71.37 per share

- 2023-09: $61.63 per share

- 2023-10: $56.21 per share

- 2023-11: $70.27 per share

- 2023-12: $82.79 per share

- 2024-01: $81.48 per share

- 2024-02: $91.76 per share

- 2024-03: $99.75 per share

- 2024-04: $88.55 per share

- 2024-05: $86.48 per share

- 2024-06: $74.12 per share

- 2024-07: $83.63 per share

- 2024-08: $63.74 per share

- 2024-09: $66.58 per share

- 2024-10: $70.85 per share

- 2024-11: $75.03 per share

- 2024-12: $69.03 per share

- 2025-01: $72.83 per share

- 2025-02: $61.69 per share

- 2025-03: $58.10 per share

- 2025-04: $57.82 per share

- 2025-05: $55.87 per share

- 2025-06: $54.38 per share

- 2025-07: $64.24 per share

- 2025-08: $61.63 per share

- 2025-09: $51.67 per share

- 2025-10: $48.32 per share

- 2025-11: $34.98 per share

- 2025-12: $35.08 per share

- 2026-01: $41.42 per share

- 2026-02: $41.42 per share

- 2026-03: $36.42 per share

- 2026-04: $39.20 per share

- 2026-05: $41.40 per share

- 2026-06: $50.04 per share

- 2026-07: $43.36 per share

- 2026-08: $45.58 per share

- 2026-09: $43.56 per share

- 2026-10: $44.48 per share

## Annual estimated value (USD per share)

- FY2016: low $4.96 per share, central $5.63 per share, high $6.53 per share

- FY2017: low $6.00 per share, central $6.80 per share, high $7.87 per share

- FY2018: low $11.26 per share, central $14.83 per share, high $17.23 per share

- FY2019: low $13.36 per share, central $18.60 per share, high $21.64 per share

- FY2020: low $15.47 per share, central $21.71 per share, high $25.35 per share

- FY2021: low $21.96 per share, central $30.93 per share, high $36.16 per share

- FY2022: low $18.56 per share, central $26.06 per share, high $30.59 per share

- FY2023: low $10.05 per share, central $12.85 per share, high $15.02 per share

- FY2024: low $7.81 per share, central $8.89 per share, high $10.32 per share

- FY2025: low $8.06 per share, central $9.17 per share, high $10.65 per share

Historical values use today's bond yield for every fiscal year

Historical values use today's FX rate into trading currency for every fiscal year

Historical values use current restated fundamentals and current commodity classification; they are not point-in-time estimates

## Sources

[Original 10-K filing](https://www.sec.gov/Archives/edgar/data/1069878/000119312526068732/trex-20251231.htm); period 2025-12-31, filed 2026-02-25.

Estimates depend on assumptions and are not guarantees or investment advice. Underlying data remains subject to its source licenses; public reading does not grant bulk redistribution rights.