Composite decking and railing products manufacturer Trex Company (NYSE: TREX) will be reporting earnings this Tuesday afternoon. Here’s what to look for.
Trex beat analysts’ revenue expectations by 2.8% last quarter, reporting revenues of $387.8 million, up 3% year on year. It was a very strong quarter for the company, with an impressive beat of analysts’ organic revenue estimates and a solid beat of analysts’ revenue estimates.
Is Trex a buy or sell going into earnings? Read our full analysis here, it’s free for active Edge members.
This quarter, analysts are expecting Trex’s revenue to grow 28.9% year on year to $301.3 million, a reversal from the 23.1% decrease it recorded in the same quarter last year. Adjusted earnings are expected to come in at $0.57 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 2.3% on average.
Looking at Trex’s peers in the home construction materials segment, some have already reported their Q3 results, giving us a hint as to what we can expect. Hayward delivered year-on-year revenue growth of 7.4%, beating analysts’ expectations by 5.5%, and Builders FirstSource reported a revenue decline of 6.9%, topping estimates by 2.6%. Hayward traded up 12.1% following the results while Builders FirstSource’s stock price was unchanged.
Read our full analysis of Hayward’s results here and Builders FirstSource’s results here.
Investors in the home construction materials segment have had steady hands going into earnings, with share prices flat over the last month. Trex is down 7.6% during the same time and is heading into earnings with an average analyst price target of $68.41 (compared to the current share price of $48.32).
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