Trex Company Inc Delivers More Double-Digit Profit Growth and a Surprise Acquisition
Leading wood-alternative decking, railing, and related accessories maker Trex Company Inc (NYSE: TREX) reported second-quarter financial results on July 31, turning in another of the same kind of quarter investors should have become accustomed to over the past few years. Revenue was up 8% to a highest-ever $157.9 million, while earnings increased 22% on a 370 basis point expansion of gross margin to 45.6%.
In addition, the company made an acquisition, buying SC Company, which designs and manufactures steel and aluminum railing for commercial and architectural applications, for $71.5 million. This was a bit of a surprising move considering that SC Company and Trex have very little overlap in typical applications, and no potential manufacturing synergies. In other words, this enters Trex into a brand-new business.
Trex is now in the commercial and architectural railing business. Image source: Trex subsidiary SC Railing.
Source: Fool.com
Trex Co. Inc. Stock
With 0 Sell predictions and 1 Buy predictions the community sentiment towards the Trex Co. Inc. stock is not clear.
As a result the target price of 100 € shows a slightly positive potential of 19.05% compared to the current price of 84.0 € for Trex Co. Inc..
