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Trex: Trex's Q4 2025 Earnings: A Strong Finish to a Challenging Year

Trex reported net sales of $161 million in Q4 2025, a 4% decrease compared to the prior year period, but above the midpoint of guidance due to higher-than-anticipated railing sales. Gross profit was $49 million, down from $71 million, and gross margin was 30.2%, down compared to 43% in the prior year, primarily due to changes in accounting methodology. For the full year, net sales totaled $1.17 billion, a 2% increase compared to $1.15 billion, primarily due to pricing and expansion in railing placements. Net income was $190 million or $1.78 per diluted share compared to $238 million or $2.20 per diluted share in 2024. Adjusted EPS came in at $1.88, beating analyst estimates.

TREX

USD 41.7

0.6%

A-Score: 3.5/10

Publication date: February 25, 2026

Full Report

Author: Analystock.ai

📋 Highlights
  • Q4 Sales Growth: 2% year-over-year despite a down repair and remodel sector.
  • Arkansas Campus Development: $233 million invested in 2025 to add capacity and reduce external sourcing reliance.
  • Railing Strategy Success: Robust double-digit growth in 2025, contributing to higher-than-expected Q4 sales.
  • 2025 Full-Year Performance: Net sales of $1.17 billion (2% increase) and adjusted EBITDA of $336 million.
  • 2026 EBITDA Guidance: $315–$340 million, with share buybacks prioritized as free cash flow increases to $50 million in 2025.

Segment Performance

The company's railing solutions have seen significant growth, with double-digit growth in 2025. Trex's railing strategy achieved robust double-digit growth, driven by its unbeatable railing portfolio. The company is targeting contractors in New England and the West Coast, where PVC is more prevalent, and is looking to convert them to WPC. Bryan Fairbanks discussed how Trex's volume in decking is a significant advantage, and the company will leverage that scale to improve railing's profitability over time.

Guidance and Outlook

For 2026, Trex expects net sales of $1.185 billion to $1.23 billion, representing low single-digit to mid-single-digit percent growth year-over-year. Adjusted EBITDA is expected to range from $315 million to $340 million. The company expects railings to be up double-digit, with decking growth being more moderate. Trex's guidance implies 3% growth at the midpoint, with sell-through expected to be similar, and no significant inventory changes.

Valuation

Trex's current valuation metrics indicate a P/E Ratio of 23.3, P/B Ratio of 4.29, and EV/EBITDA of 15.27. With expected revenue growth of 7.1% next year, the stock appears reasonably valued. The company's focus on innovation, continuous improvement, and providing excellent service is expected to drive growth and profitability.

Financial Health

Trex's return on equity (ROE) stands at 19.16%, indicating strong profitability. The company's net debt to EBITDA ratio is 0.56, suggesting a manageable debt burden. With a free cash flow yield of 3.28%, Trex is expected to generate significant cash flows in the coming years, which will be used to fund growth initiatives and return value to shareholders.

Trex's A-Score