Trex (TREX) Stock Forecast & Price Target

Trex Co Inc has demonstrated a positive trend with products launched within the past 36 months now accounting for 25% of trailing-twelve-month sales, reflecting strong consumer acceptance despite a challenging macroeconomic environment. The company’s revitalized marketing efforts and strategic investments are increasing early purchase intent indicators, which is further supported by contractors reporting a 2%-3% growth in decking project activity for the year through 3Q25. Additionally, Trex is poised for continued revenue growth driven by renovation market prospects and the anticipated recovery in the market, alongside gains in its wood conversion share and operational efficiencies expected to enhance margins in the longer term.

Trex Co Inc has revised its fiscal year 2025 sales guidance to flat year-over-year growth, a significant reduction from the prior estimate of 5-7%, reflecting deteriorating consumer demand and inventory destocking among partners. The company's gross margin has decreased to 41.0%, coupled with a shortfall in EBITDA of $90 million, which fell below forecasts and indicates a decline in profitability margins. Furthermore, Trex's shares have sharply declined due to these lowered expectations and increased competitive pressures, with the stock now trading near a ten-year trough multiple, compounding concerns of further revenue and earnings miss in subsequent quarters.