Trex Co. reported 4Q web gross sales of $228 million that exceeded analysts’ expectations of $216 million. The producer of wood-alternative decking and railing noticed a year-over-year enchancment of 39% in its top-line, reflecting stable demand throughout all of its product strains.
Internet gross sales of the corporate’s residential merchandise jumped 40% to $214 million. Industrial merchandise contributed $15 million to consolidated 4Q gross sales. Trex’s (TREX) 4Q earnings jumped 19% to $0.37 per share year-over-year and surpassed Avenue estimates by a penny.
The corporate’s gross margin contracted 270 foundation factors to 40.5% year-on-year primarily attributable to COVID-19 administration prices and capability ramp-up associated prices at its Virginia facility. EBITDA margin declined 240 foundation factors to 27.9%. (See Trex inventory evaluation on TipRanks)
For 1Q, Trex forecasts revenues to generate between $235 million and $245 million. Analysts predict $236.7 million for the quarter.
Following the earnings launch, Berenberg Financial institution analyst Alex Maroccia reiterated a Purchase ranking and worth goal of $86 (14% draw back potential) on the inventory.
In a word to buyers, Maroccia wrote, “As client demand continues to develop, we imagine Trex will retain the flexibility to seize robust gross sales throughout its product channels, as it would acknowledge extra will increase to its manufacturing functionality all through FY2021.”
General, the Avenue is cautiously optimistic on the inventory, with a Reasonable Purchase consensus ranking based mostly on 2 Buys and a couple of Holds. The typical analyst worth goal of $88.50 implies draw back potential of about 11.7% from present ranges. Shares have gained by about 88.5% over the previous 12 months.