Trex Company Up 2.2% To $56.52 After Earnings Beat

Trex Company Inc (TREX) reported better than expected earnings this afternoon for Q3 2023.

Wall Street earnings per share (EPS) projections for Trex Company were at $0.50. The company beat those estimates with an EPS of $0.57. The earnings per share of $0.57 (which represents a -14% EPS surprise) led to the company's profits rising 307% compared to last year when the firm reported an EPS of $0.14. The increase in Trex Company's annual growth rate represents how the business is performing well amid recent economic conditions.

Consensus estimates for Trex Company revenue averaged out to $289.9 million, with the business managing to beat those expectations with reported third-quarter revenue of $303.8 million. The $13.9 million (5%) positive revenue surprise led to 61% growth year-over-year as the firm reported revenue of $188.5 million in its year-ago quarter. The higher earnings growth compared to revenue points to Trex Company improving its profit margin.

The stock is up 2.2% to $56.52 after the report.

The firm's lower revenue growth to earnings signals that the firm has been able to reduce costs and improve its profit margin overall.

The average recommendation from Wall Street analysts was a Buy which may get revised based on this new data.

Trading in the five days leading up to the report earned Trex Company a Bearish Sentiment Rank from InvestorsObserver.

Prior to the report, InvestorsObserver gave the stock an overall score of 65. Meanwhile, the average Wall Street analyst rated the stock a Buy.

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.