Yahoo Finance Trex Company, Inc. Just Recorded A 13% EPS Beat: Here's What Analysts Are Forecasting Next
Trex Company, Inc. (NYSE:TREX) shareholders are probably feeling a little disappointed, since its shares fell 5.0% to US$87.38 in the week after its latest first-quarter results. It looks like a credible result overall - although revenues of US$374m were in line with what the analysts predicted, Trex Company surprised by delivering a statutory profit of US$0.82 per share, a notable 13% above expectations. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.
See our latest analysis for Trex Company
Following last week's earnings report, Trex Company's 18 analysts are forecasting 2024 revenues to be US$1.24b, approximately in line with the last 12 months. Statutory earnings per share are forecast to dip 4.3% to US$2.23 in the same period. Before this earnings report, the analysts had been forecasting revenues of US$1.24b and earnings per share (EPS) of US$2.21 in 2024. 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.
It will come as no surprise then, to learn that the consensus price target is largely unchanged at US$102. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. Currently, the most bullish analyst values Trex Company at US$120 per share, while the most bearish prices it at US$75.00. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Trex Company's past performance and to peers in the same industry. We would highlight that Trex Company's revenue growth is expected to slow, with the forecast 1.2% annualised growth rate until the end of 2024 being well below the historical 11% p.a. growth over the last five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 5.2% annually. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Trex Company.
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. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Trex Company's revenue is expected to perform worse than the wider industry. The consensus price target held steady at US$102, with the latest estimates not enough to have an impact on their price targets.
With that in mind, we wouldn't be too quick to come to a conclusion on Trex Company. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple Trex Company analysts - going out to 2026, and you can see them free on our platform here.
However, before you get too enthused, we've discovered 1 warning sign for Trex Company that you should be aware of.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
