Trex (TREX) Stock Forecast & Price Target

Trex Co Inc has demonstrated a positive financial trajectory, with adjusted EBITDA guidance projected between $378 million and $385 million, reflecting a year-over-year increase of approximately 6% at the midpoint. The company experienced robust sell-through rates, with a forecasted 5% revenue growth in 2024, alongside a 10% increase in EBITDA, despite experiencing volatility in quarterly performance. Furthermore, Trex's strategic initiatives, such as increasing inventory levels and introducing new products, are expected to enhance free cash flow and support ongoing growth in adjacent product categories.

Trex Co Inc is facing a significant revenue decline with a projected 1Q25 sales drop of approximately 10-12% year-over-year, largely attributed to diminished channel inventory builds. The company's financial outlook is further weakened by increased competition within the Residential segment, which may lead to reduced prices and margins, alongside the anticipated drag on gross margins from higher depreciation costs at the new Arkansas facility. Additionally, broader economic challenges, such as declining consumer confidence and wages, are expected to negatively impact Trex's overall financial performance.