Trex Company, Inc. (NYSE:TREX) investors will be delighted, with the company turning in some strong numbers with its latest results. Trex Company delivered a significant beat with revenue hitting US$360m and statutory EPS reaching US$0.52, both beating estimates by more than 10%. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.
Taking into account the latest results, the consensus forecast from Trex Company's 20 analysts is for revenues of US$1.33b in 2027. This reflects a credible 3.5% improvement in revenue compared to the last 12 months. Per-share earnings are expected to ascend 15% to US$2.04. Before this earnings report, the analysts had been forecasting revenues of US$1.32b and earnings per share (EPS) of US$2.02 in 2027. The consensus analysts don't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.
View our latest analysis for Trex Company
The consensus price target rose 7.3% to US$59.58despite there being no meaningful change to earnings estimates. It could be that the analystsare reflecting the predictability of Trex Company's earnings by assigning a price premium. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. Currently, the most bullish analyst values Trex Company at US$75.00 per share, while the most bearish prices it at US$46.00. This shows there is still a bit of diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.
Of course, another way to look at these forecasts is to place them into context against the industry itself. It's clear from the latest estimates that Trex Company's rate of growth is expected to accelerate meaningfully, with the forecast 2.8% annualised revenue growth to the end of 2027 noticeably faster than its historical growth of 0.3% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to see revenue growth of 6.4% annually. It seems obvious that, while the future growth outlook is brighter than the recent past, Trex Company is expected to grow slower than the wider industry.
The Bottom Line
The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.
Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have forecasts for Trex Company going out to 2028, and you can see them free on our platform here.
You can also view our analysis of Trex Company's balance sheet, and whether we think Trex Company is carrying too much debt, for free on our platform here.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.