Trex Co Inc

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TREX : NYSE : Industrial Goods
$67.95 -1.4 | -2.0%
Today's Range: 67.74 - 69.93
Avg. Daily Volume: 295800.0
01/19/17 - 2:46 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 managed to grow both sales and net income at a faster pace than the average competitor in its industry this quarter as compared to the same quarter a year ago. 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 Volume284996.0250334.0

Valuation


BUY. TREX CO INC's P/E ratio indicates a premium compared to an average of 23.93 for the Building Products industry and a premium compared to the S&P 500 average of 25.49. To use another comparison, its price-to-book ratio of 16.73 indicates a significant premium versus the S&P 500 average of 2.84 and a significant discount versus the industry average of 21.34. 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 33.29 Peers 23.93   TREX 15.52 Peers 18.41

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 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 24.85 Peers 19.25   TREX 0.55 Peers 1.53

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 16.73 Peers 21.34   TREX 46.09 Peers 33.68

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 discount to 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 4.26 Peers 1.55   TREX 11.20 Peers 7.91

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.

 

Higher. A sales growth rate that exceeds the industry implies that a company is gaining market share.

TREX has a sales growth rate that significantly exceeds its peers.

 

 

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