Trex Company, Inc. Fundamental Analysis (NYSE: TREX)
Trex Company, Inc. (NYSE: TREX) shows moderate financial fundamentals with a PE ratio of 28.08, profit margin of 14.68%, and ROE of 17.38%. The company generates $1.2B in annual revenue with weak year-over-year growth of 1.98%.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 55.8/100 based on profitability, valuation, growth, and balance sheet metrics. The C grade reflects average fundamentals, with notable risks in certain areas.
Fundamental Health Score
We analyze TREX's fundamental strength across five key dimensions:
Efficiency Score
ExcellentTREX demonstrates superior asset utilization.
Valuation Score
ModerateTREX shows balanced valuation metrics.
Growth Score
WeakTREX faces weak or negative growth trends.
Financial Health Score
ExcellentTREX maintains a strong and stable balance sheet.
Profitability Score
ModerateTREX maintains healthy but balanced margins.
Key Financial Metrics
Is TREX Expensive or Cheap?
P/E Ratio
TREX trades at 28.08 times earnings. This indicates a fair valuation.
PEG Ratio
When adjusting for growth, TREX's PEG of -9.71 indicates potential undervaluation.
Price to Book
The market values Trex Company, Inc. at 4.78 times its book value. This suggests the stock is fully valued or overvalued on an asset basis.
EV/EBITDA
Enterprise value stands at 15.66 times EBITDA. This signals the market has high growth expectations.
How Well Does TREX Make Money?
Net Profit Margin
For every $100 in sales, Trex Company, Inc. keeps $14.68 as profit after all expenses.
Operating Margin
Core operations generate 20.17 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $17.38 in profit for every $100 of shareholder equity.
ROA
Trex Company, Inc. generates $10.90 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
Trex Company, Inc. generates strong operating cash flow of $363.66M, reflecting robust business health.
Free Cash Flow
Trex Company, Inc. generates strong free cash flow of $207.85M, providing ample flexibility for dividends, buybacks, or growth.
FCF Per Share
Each share generates $2.00 in free cash annually.
FCF Yield
TREX converts 4.15% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
28.08
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
-9.71
vs 25 benchmark
P/B Ratio
Price to book value ratio
4.78
vs 25 benchmark
P/S Ratio
Price to sales ratio
4.06
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
0.29
vs 25 benchmark
Current Ratio
Current assets to current liabilities
1.06
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
0.17
vs 25 benchmark
ROA
Return on assets percentage
0.11
vs 25 benchmark
ROCE
Return on capital employed
0.21
vs 25 benchmark
How TREX Stacks Against Its Sector Peers
| Metric | TREX Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 28.08 | 27.26 | Neutral |
| ROE | 17.38% | 1196.00% | Weak |
| Net Margin | 14.68% | 224.00% | Weak |
| Debt/Equity | 0.29 | 0.73 | Strong (Low Leverage) |
| Current Ratio | 1.06 | 3.13 | Neutral |
| ROA | 10.90% | 2757.00% | Weak |
TREX outperforms its industry in 1 out of 6 key metrics, but lagging in ROE.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews Trex Company, Inc.'s 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
44.37%
Industry Style: Cyclical, Commodity, Value
High GrowthEPS CAGR
17.41%
Industry Style: Cyclical, Commodity, Value
High GrowthFCF CAGR
107.07%
Industry Style: Cyclical, Commodity, Value
High Growth