Abstract

Trex Company, Inc. will report fourth-quarter 2025 results on February 24, 2026, Post Market; this preview details expected revenue, EPS, EBIT, margin context, segment performance, and the prevailing institutional stance heading into the print.

Market Forecast

Based on the company’s current-quarter projections, Trex Company, Inc. revenue is estimated at 144.46 million, representing a year-over-year decline of 9.92%, with adjusted EPS forecast at -$0.02 year-over-year down 134.03% and EBIT at -0.76 million year-over-year down 110.25%. There is no formal margin guidance in the forecast set, but the cadence of gross profit margin and net profit margin commentary will be critical to gauging near-term profitability normalization.

The main business continues to be driven by residential products, with last quarter’s revenue of 285.35 million and year-over-year growth of 22.09% reflecting strong sell-through and price/mix at seasonally advantaged levels; the current-quarter outlook suggests volume moderation and tighter cost discipline as the company navigates early-year seasonality and operating expense absorption. The most promising opportunity remains within the residential portfolio supported by new product launches and brand recognition, with last quarter’s residential revenue at 285.35 million up 22.09% year-over-year, positioning the category for demand capture into the spring selling season.

Last Quarter Review

Trex Company, Inc. delivered third-quarter 2025 revenue of 285.35 million, a gross profit margin of 40.46%, GAAP net profit attributable to the parent company of 51.77 million, a net profit margin of 18.14%, and adjusted EPS of $0.51, up 37.84% year-over-year. A notable financial takeaway from the quarter was that both revenue and EPS missed consensus (revenue surprise of -15.25 million and EPS surprise of -$0.06), and net profit declined sequentially with a quarter-on-quarter rate of -31.80%, underscoring sensitivity to mix and cost absorption.

Main business highlights: the residential category accounted for 285.35 million in revenue, up 22.09% year-over-year, benefiting from resilient demand and effective channel execution despite competitive promotional activity and normalization in ordering patterns.

Current Quarter Outlook

Main business: Residential decking and related products

The residential portfolio is the anchor of Trex Company, Inc.’s performance, and the current quarter’s forecast implies a more measured volume environment ahead of the spring season. With estimated revenue at 144.46 million and adjusted EPS at -$0.02, the guidance reflects early-year seasonality, cost absorption, and product mix dynamics that typically weigh on margins in the first quarter of the calendar year. Management’s commentary on pricing, promotional cadence, and channel inventory levels will be central to interpreting revenue quality and the potential for margin recovery into the next seasonal wave. The EBIT projection of -0.76 million signals near-term operating leverage pressure, placing heightened emphasis on SG&A containment and manufacturing efficiency to mitigate deleveraging when volumes are light. Investors will look for details on input cost trends, freight, and yield improvements within the residential portfolio to assess gross margin trajectory as temperatures and foot traffic improve in the spring.

Most promising business: Residential innovations and accessories

New offerings and brand equity within Trex Company, Inc.’s residential lineup continue to be a meaningful lever for engagement and conversion. The launch of Refuge ignition-resistant decking, designed with Class A flame spread performance, positions the portfolio to address code-driven demand in fire-prone regions and may broaden addressable opportunities, especially where wildfire resilience is now codified. While the immediate revenue impact in the current quarter could be modest given early-stage rollout and seasonality, the product should support mix enhancement and help sustain attach rates with complementary accessories into the higher-demand months. The company’s recognition as “America’s Most Trusted Outdoor Decking” again this year reinforces conversion potential at retail and trade, and may help stabilize sell-through when consumers weigh alternatives at the point of purchase. Against that backdrop, the most promising near-term vector is the residential category itself, where new SKUs and brand reinforcement could accelerate in the spring; last quarter’s residential revenue of 285.35 million, up 22.09% year-over-year, underscores capacity to participate in seasonal lift once demand normalizes. Monitoring acceptance of Refuge across code-sensitive geographies and early reorder patterns will be important for quantifying its incremental contribution to the residential portfolio.

Factors most impacting the stock this quarter

The stock’s immediate reaction will likely hinge on revenue realization versus the 144.46 million estimate, the degree of margin compression disclosed, and any discussion of expense phasing and depreciation tied to recent capacity investments. The absence of formal gross margin or net margin forecasts places extra focus on qualitative commentary; clarity on SG&A timing, stepped-up depreciation, and product mix will inform whether the implied seasonal loss in EPS is a transient effect or a broader signal about earnings cadence into 2026. UBS has highlighted near-term headwinds including higher selling, general and administrative expenses, increased depreciation at the Little Rock facility, and product mix pressure; how management frames these elements and any cost-offsets will influence expectations for margin expansion later in the year. Guidance framing for the first half of 2026—especially sell-in versus sell-through, promotional strategy, and retail inventory—will be examined to gauge whether volume will recover in line with historical patterns. The market will also parse color on accessories attachment rates, customer satisfaction metrics, and channel reorder velocity after the winter months. Finally, rating changes and target revisions can amplify post-print moves; recent upgrades suggest institutional appetite for the longer-term margin narrative, and positive commentary on expense normalization or mix improvement could support the shares even if near-term numbers reflect seasonality.

Analyst Opinions

Bullish views predominate in the January 1 to February 17 window. Counting explicit Buy/Overweight calls versus Underperform/Sell within the period, the ratio of bullish to bearish opinions is 2:0, with multiple upgrades reinforcing confidence in execution and margin recovery beyond near-term headwinds. UBS upgraded Trex Company, Inc. to Buy and raised its price target to $52, noting that while 2026 may present near-term challenges—higher SG&A, stepped-up depreciation at the Little Rock facility, and product mix—these dynamics are well understood, setting the stage for margin expansion beginning in 2027. UBS also highlighted expectations for a return to high single-digit annual sales growth longer term driven by portfolio initiatives and category conversion, framing the current quarter’s softness as transitional. DA Davidson upgraded the shares to Buy with a $50 price target, emphasizing opportunity tied to product innovation, brand strength, and alignment of expense structure with expected volume patterns over the coming periods. The prevailing bullish perspective into the print is that current-quarter pressure is consistent with seasonality and investment timing, and that the company’s brand equity, product roadmap, and planned expense normalization can support a constructive trajectory as demand improves into the spring selling season. In the near term, these analysts will focus on how reported revenue compares to the 144.46 million estimate, whether adjusted EPS tracks the projected -$0.02, and how commentary on margins, SG&A phasing, and manufacturing depreciation informs the slope of recovery in subsequent quarters. The anticipated catalysts for reinforcing the bullish case include visibility on accessories attachment, early adoption signals for ignition-resistant decking, and any incremental detail suggesting that expense absorption in this quarter will ease as volumes rise, allowing operating leverage to reassert in the back half of the year.