Assessing Trex (TREX) Valuation After Analyst Upgrades And Insider Buying Signal Renewed Optimism
Recent analyst upgrades on Trex Company (TREX), combined with insider buying, new distribution partnerships, and a board appointment, have turned fresh attention to the decking maker’s fundamentals after a stretch of industry and share price pressure.
See our latest analysis for Trex Company.
At a share price of $36.52, Trex’s recent 7 day and 30 day share price returns of 4.10% and 6.35% contrast with a 90 day share price return of 30.42% and a 1 year total shareholder return decline of 44.58%. This suggests that recent momentum has picked up after a tougher stretch that coincided with industry concerns and mixed analyst views.
If Trex’s recent upgrades and insider activity have you rethinking building products, it can also be worth scanning fast growing stocks with high insider ownership for other companies where insiders have meaningful skin in the game.
With Trex trading at $36.52 and sitting at a 24% discount to one intrinsic value estimate and about 17% below the average analyst target, the key question is whether this gap signals an opening or whether expectations already capture future growth.
Most Popular Narrative: 16.2% Undervalued
With Trex Company last closing at $36.52 against a narrative fair value of $43.58, the current discount raises clear questions about what assumptions sit underneath that gap.
The ongoing shift in consumer preference toward sustainable, eco-friendly materials is boosting Trex's appeal, as demonstrated by strong demand for its 95% recycled content composite decking and success in taking market share from traditional wood; this should drive long-term revenue growth.
Curious what kind of revenue path and profit margin profile underpin that higher fair value? The narrative leans on a specific growth runway, a richer earnings mix, and a future earnings multiple that assumes investors keep paying up for those cash flows.
Result: Fair Value of $43.58 (UNDERVALUED)
Have a read of the narrative in full and understand what's behind the forecasts.
However, this hinges on decking demand holding up. A prolonged repair and remodel slowdown or sharper price competition could quickly undercut those margin and fair value assumptions.
Find out about the key risks to this Trex Company narrative.
Build Your Own Trex Company Narrative
If you see the numbers differently or want to pressure test every input yourself, you can build a custom Trex view in minutes by starting with Do it your way.
A great starting point for your Trex Company research is our analysis highlighting 1 key reward and 1 important warning sign that could impact your investment decision.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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