TREX’s Strong Financial Performance: EPS of $0.819 and revenue of $373.64 million exceeded estimates, showcasing significant growth and positive outcomes.
Consistent Earnings Surprises: TREX consistently exceeds EPS estimates for four quarters, with a 13.89% earnings surprise in the reported quarter.
Financial Health and Efficiency: TREX exhibits strong metrics, including a 45.4% gross margin, $133 million in EBITDA, and a balanced financing approach, indicating stability and resilience.
On Thursday, May 9, 2024, TREX (NYSE:TREX) reported its earnings with notable figures, marking a significant moment for the company and its stakeholders. The company’s earnings per share (EPS) stood at $0.819, surpassing the estimated EPS of $0.72, and achieved revenue of approximately $373.64 million, exceeding the anticipated revenue of about $366.73 million.
This financial performance not only indicates a positive outcome for the company but also reflects its ability to outperform expectations, showcasing strong year-over-year growth from the previous year’s earnings of $0.38 per share.
Trex Company, Inc. (TREX) has demonstrated a consistent ability to exceed consensus EPS estimates, marking the fourth consecutive quarter of doing so. With an earnings surprise of 13.89% for the quarter, the company has continued its trend of surpassing expectations.
This is a testament to Trex’s robust financial health and operational efficiency. In the previous quarter, Trex had been anticipated to post earnings of $0.19 per share but instead reported $0.20 per share, delivering a surprise of 5.26%. Such performance highlights the company’s strategic planning and execution capabilities.
The revenue figures reported by Trex for the quarter ending March 2024, totaling $373.64 million, not only represent a significant increase from the $238.72 million reported in the same period a year ago but also exceeded the Zacks Consensus Estimate by 2.01%. This marks the fourth consecutive time the company has surpassed consensus revenue estimates, underscoring its growth trajectory and its ability to consistently deliver above-market expectations. The company’s gross margin of 45.4% and an EBITDA of $133 million, which corresponds to an EBITDA margin of 35.6%, further solidify its financial strength and operational efficiency.
Bryan Fairbanks, the President and CEO of Trex, attributed this exceptional performance to the sustained popularity of the Outdoor Living category and the robust consumer demand for Trex-branded products. The exceptional performance was fueled by sustained Outdoor Living category popularity and robust consumer demand for Trex-branded products, where the premium product sell-through saw double-digit growth in Q1, driven by an expanded product portfolio and strong end-market demand.
This success is also supported by channel partners capitalizing on the company’s Early Buy program, especially after concluding the previous year with historically low inventories.
Trex’s financial metrics, such as a price-to-earnings (P/E) ratio of approximately 37.9 on a trailing twelve-month (TTM) basis and a price-to-sales (P/S) ratio of roughly 7.81 TTM, indicate a strong market valuation and investor confidence. The company’s balanced approach to financing, with a moderate level of debt compared to its equity as indicated by a debt-to-equity (D/E) ratio of nearly 0.3 TTM, and its solid ability to meet short-term obligations, as suggested by a current ratio of approximately 1.39 TTM, further demonstrate its financial health and operational stability.