Trex Co Inc

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TREX : NYSE : Industrial Goods
$49.38 up 0.47 | 0.96%
Today's Range: 48.82 - 49.45
Avg. Daily Volume: 288,600
07/27/16 - 3:58 PM ET

Financial Analysis


TREX CO INC's gross profit margin for the first quarter of its fiscal year 2016 has increased when compared to the same period a year ago. The company has grown sales and net income during the past quarter when compared with the same quarter a year ago, however, it was unable to keep up with the growth of the average competitor within its industry. TREX CO INC has weak liquidity. Currently, the Quick Ratio is 0.84 which shows a lack of ability to cover short-term cash needs. The company's liquidity has decreased from the same period last year, indicating deteriorating cash flow.

At the same time, stockholders' equity ("net worth") has significantly decreased by 33.44% from the same quarter last year. Overall, the key liquidity measurements indicate that the company is in a position in which financial difficulties could develop in the future.

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Income Statement Q1 FY16 Q1 FY15
Net Sales ($mil)131.68120.8
EBITDA ($mil)40.8431.29
EBIT ($mil)37.0227.65
Net Income ($mil)23.417.55


Balance Sheet Q1 FY16 Q1 FY15
Cash & Equiv. ($mil)3.82.56
Total Assets ($mil)312.7289.88
Total Debt ($mil)141.584.0
Equity ($mil)87.55131.54


Profitability Q1 FY16 Q1 FY15
Gross Profit Margin46.6742.95
EBITDA Margin31.0125.9
Operating Margin28.1122.89
Sales Turnover1.441.42
Return on Assets17.2516.13
Return on Equity61.6135.56
Debt Q1 FY16 Q1 FY15
Current Ratio1.051.37
Debt/Capital0.620.39
Interest Expense0.570.14
Interest Coverage64.71201.85


Share Data Q1 FY16 Q1 FY15
Shares outstanding (mil)29.3332.08
Div / share0.00.0
EPS0.780.55
Book value / share2.984.1
Institutional Own % n/a n/a
Avg Daily Volume290145.0475901.0

Valuation


BUY. This stock's P/E ratio indicates a significant discount compared to an average of 72.33 for the Building Products industry and a premium compared to the S&P 500 average of 25.05. To use another comparison, its price-to-book ratio of 16.00 indicates a significant premium versus the S&P 500 average of 2.81 and a significant discount versus the industry average of 34.80. The price-to-sales ratio is well above both the S&P 500 average and the industry average, indicating a premium. Upon assessment of these and other key valuation criteria, TREX CO INC proves to trade at a discount 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 27.45 Peers 72.33   TREX 28.55 Peers 16.34

Discount. A lower P/E ratio than its peers can signify a less expensive stock or lower growth expectations.

TREX is trading at a significant discount to its peers.

 

Premium. 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 premium 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 19.82 Peers 21.63   TREX 0.70 Peers 0.98

Average. An average price-to-projected earnings ratio can signify an industry neutral stock price and average future growth expectations.

TREX is trading at a valuation on par with 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 16.00 Peers 34.80   TREX 20.00 Peers 421.10

Discount. 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 significant discount to its peers.

 

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

However, TREX is expected to significantly trail its peers on the basis of its earnings growth rate.

 
Price/Sales
1 2 3 4 5
premium   discount
  Sales Growth
1 2 3 4 5
premium   discount
TREX 3.10 Peers 1.78   TREX 9.68 Peers 9.34

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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