Composite decking and railing products manufacturer Trex Company (NYSE:TREX) will be announcing earnings results tomorrow afternoon. Here’s what you need to know.
Trex beat analysts’ revenue expectations by 3.3% last quarter, reporting revenues of $233.7 million, down 23.1% year on year. It was an exceptional quarter for the company, with an impressive beat of analysts’ EBITDA estimates.
Is Trex a buy or sell going into earnings? Read our full analysis here, it’s free.
This quarter, analysts are expecting Trex’s revenue to decline 18% year on year to $160.5 million, a reversal from the 1.9% increase it recorded in the same quarter last year. Adjusted earnings are expected to come in at $0.04 per share.
Analysts covering the company have generally reconfirmed their estimates over the last 30 days, suggesting they anticipate the business to stay the course heading into earnings. Trex has only missed Wall Street’s revenue estimates once over the last two years, exceeding top-line expectations by 2.9% on average.
Looking at Trex’s peers in the home construction materials segment, some have already reported their Q4 results, giving us a hint as to what we can expect. Simpson delivered year-on-year revenue growth of 3.1%, beating analysts’ expectations by 4.3%, and Griffon reported a revenue decline of 1.7%, falling short of estimates by 0.8%. Simpson traded up 1.5% following the results while Griffon was also up 8.8%.
Read our full analysis of Simpson’s results here and Griffon’s results here.
Stocks, especially growth stocks where cash flows further in the future are more important to the story, had a good 2024. An economic soft landing (so far), the start of the Fed's rate cutting campaign, and the election of Donald Trump were positives for the market, and while some of the home construction materials stocks have shown solid performance, the group has generally underpeformed, with share prices down 6.2% on average over the last month. Trex is down 18.5% during the same time and is heading into earnings with an average analyst price target of $77.63 (compared to the current share price of $60.55).
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