Trex Co Inc

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TREX : NYSE : Industrial Goods
$68.6 -1.31 | -1.87%
Today's Range: 68.18 - 69.8
Avg. Daily Volume: 263300.0
03/29/17 - 4:02 PM ET

Financial Analysis


TREX CO INC's gross profit margin for the third quarter of its fiscal year 2016 has increased when compared to the same period a year ago. The company has grown its sales and net income during the past quarter when compared with the same quarter a year ago, and although its growth in net income has outpaced the industry average, its revenue growth has not. TREX CO INC has average liquidity. Currently, the Quick Ratio is 1.41 which shows that technically this company has the ability to cover short-term cash needs. The company's liquidity has increased from the same period last year, indicating improving cash flow.

During the same period, stockholders' equity ("net worth") has increased by 11.59% from the same quarter last year. Together, the key liquidity measurements indicate that it is relatively unlikely that the company will face financial difficulties in the near future.

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Income Statement Q3 FY16 Q3 FY15
Net Sales ($mil)106.1794.02
EBITDA ($mil)14.0410.04
EBIT ($mil)10.576.44
Net Income ($mil)6.93.74


Balance Sheet Q3 FY16 Q3 FY15
Cash & Equiv. ($mil)22.942.53
Total Assets ($mil)210.65232.63
Total Debt ($mil)0.048.5
Equity ($mil)120.52108.0


Profitability Q3 FY16 Q3 FY15
Gross Profit Margin31.4827.38
EBITDA Margin13.2210.68
Operating Margin9.956.85
Sales Turnover2.251.83
Return on Assets29.2719.41
Return on Equity51.1641.81
Debt Q3 FY16 Q3 FY15
Current Ratio2.031.29
Debt/Capital0.00.31
Interest Expense0.080.16
Interest Coverage135.4641.04


Share Data Q3 FY16 Q3 FY15
Shares outstanding (mil)29.3930.87
Div / share0.00.0
EPS0.230.12
Book value / share4.13.5
Institutional Own % n/a n/a
Avg Daily Volume232758.0242035.0

Valuation


BUY. TREX CO INC's P/E ratio indicates a premium compared to an average of 25.86 for the Building Products industry and a premium compared to the S&P 500 average of 26.35. To use another comparison, its price-to-book ratio of 17.21 indicates a significant premium versus the S&P 500 average of 2.94 and a significant discount versus the industry average of 18.96. The price-to-sales ratio is well above both the S&P 500 average and the industry average, indicating a premium. The valuation analysis reveals that, TREX CO INC seems to be trading at a premium to investment alternatives within the industry.


Price/Earnings
1 2 3 4 5
premium   discount
  Price/Cash Flow
1 2 3 4 5
premium   discount
TREX 34.26 Peers 25.86   TREX 15.97 Peers 112.22

Premium. A higher P/E ratio than its peers can signify a more expensive stock or higher growth expectations.

TREX is trading at a significant premium to its peers.

 

Discount. The P/CF ratio, a stock’s price divided by the company's cash flow from operations, is useful for comparing companies with different capital requirements or financing structures.

TREX is trading at a significant discount to its peers.

 
Price/Projected
Earnings
1 2 3 4 5
premium   discount
  Price to
Earnings/Growth
1 2 3 4 5
premium   discount
TREX 25.66 Peers 18.75   TREX 0.57 Peers 1.27

Premium. A higher price-to-projected earnings ratio than its peers can signify a more expensive stock or higher future growth expectations.

TREX is trading at a significant premium to its peers.

 

Discount. The PEG ratio is the stock’s P/E divided by the consensus estimate of long-term earnings growth. Faster growth can justify higher price multiples.

TREX trades at a significant discount to its peers.

 
Price/Book
1 2 3 4 5
premium   discount
  Earnings Growth
1 2 3 4 5
lower   higher
TREX 17.21 Peers 18.96   TREX 46.09 Peers -6.48

Average. A lower price-to-book ratio makes a stock more attractive to investors seeking stocks with lower market values per dollar of equity on the balance sheet.

TREX is trading at a valuation on par with its peers.

 

Higher. Elevated earnings growth rates can lead to capital appreciation and justify higher price-to-earnings ratios.

TREX is expected to have an earnings growth rate that significantly exceeds its peers.

 
Price/Sales
1 2 3 4 5
premium   discount
  Sales Growth
1 2 3 4 5
premium   discount
TREX 4.38 Peers 1.60   TREX 11.20 Peers 11.30

Premium. In the absence of P/E and P/B multiples, the price-to-sales ratio can display the value investors are placing on each dollar of sales.

TREX is trading at a significant premium to its industry.

 

Average. Comparing a company's sales growth to its industry helps to determine if the company is adding or losing market share.

TREX is keeping pace with its peers on the basis of sales growth.

 

 

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