Shares of Trex Co. Inc. (NYSE:TREX) scaled a new 52-week high of $62.93 on Aug 27, before settling lower at $61.78. Trex’s share price has been on the rise since the company posted record second-quarter fiscal 2016 results on Aug 2.
This Winchester, VA-based manufacturer and distributor of wood/plastic composite products, and related accessories, primarily for the residential and commercial decking, and railing applications in the United States has a market cap of $1.91 billion.
Average volume of shares traded over the last three months is approximately 270K. Trex has delivered year-to-date returns of around 62.41%. The company has outperformed the Zacks Consensus Estimate in three of the four trailing quarters, with an average positive surprise of 8.11%.
TREX COMPANY Price and Consensus
TREX COMPANY Price and Consensus | TREX COMPANY Quote
Growth Drivers
Trex reported record second-quarter fiscal 2016 earnings of 79 cents per share which increased 36% from 58 cents in the year-ago quarter. Earnings came above the Zacks Consensus Estimate of 72 cents per share. Trex’s strong performance in the quarter reflects the continuing build in demand for our market-leading products, the structural benefits of its recycled-content business model and ongoing manufacturing cost reductions, all of which are driving significant operating leverage.
Strong first half 2016 results have put the company on track to deliver strong earnings growth for the full year, driven by high single-digit sales growth and lower production costs.
Trex expects revenue for the third quarter of 2016 to be approximately $105 million, a 12% year over year increase. Gross margin comparisons are expected to continue to benefit from higher capacity utilization and cost savings. Trex raised its 2016 guidance for incremental margin to average at 80%, up from the prior forecast of 60%.
At present, Trex has a Zacks Rank #1 (Strong Buy).
Other Stocks to Consider
Some other stocks in the industry worth considering include Gibraltar Industries, Inc. (NASDAQ:ROCK) , United Rentals, Inc. (NYSE:URI) and NCI Building Systems Inc. (NYSE:NCS) . While Gibraltar Industries and United Rentals sport the same rank as Trex, NCI Building Systems carry a Zacks Rank #2 (Buy).
NCI BLDG SYSTEM (NCS): Free Stock Analysis Report
TREX COMPANY (TREX): Free Stock Analysis Report
UTD RENTALS INC (URI): Free Stock Analysis Report
GIBRALTAR INDUS (ROCK): Free Stock Analysis Report
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