Is it Time to Buy the Dip in Trex Stock or Will the Correction Continue?

Sentiment surrounding TREX has been split

facebook twitter linkedin

Like most stocks today, Trex Company, Inc. (NYSE:TREX) is on the decline, last seen down 4.3% at $89.29 as it sets its sights on its lowest close since late-March. The stock has been the victim of a pretty rough selloff this month. losing 33.8% this year already, and headed for its eighth-straight loss today. In fact, all but one of the security's last 12 sessions has ended in the red, and it just broke back below the formerly supportive 320-day moving average late last week. 

trex jan 24

Recent coverage from UBS did little to help the stock. Last Thursday, UBS started with a "neutral" rating, and a somewhat lofty $111 price target. This put the 12-month consensus price target at $126.50 -- a hefty 41.3% premium to current levels. Meanwhile, just five analysts consider TREX a "strong buy," compared to seven "hold" or worse ratings. 

Short-term options traders are still call-biased, though. This is per the security's Schaeffer's put/call open interest ratio (SOIR) of 0.43, which stands higher than just 16% of readings from the past year. 

Moreover, Trex Company has increased its revenues and net income 64% and 69%, respectively, since fiscal 2018. In addition, TREX has a fairly manageable balance sheet with $54.04 million in cash and $36.94 million in total debt. However, Trex stock’s valuation is on the higher end with TREX trading at a price-earnings ratio of 55.25 and a price-sales ratio of 14.54, making it likely for Trex stock to continue to trending downward as part of a correction.


Now is the time to join our thriving community of Event Traders who consistently profit from every earnings season. With this discounted subscription opportunity, you'll stay ahead of the curve and seize opportunities others miss. Do not let Q3 earnings season pass you by – subscribe now and supercharge your portfolio with expert insights that turn market reactions into profit-generating opportunities!! Don't waste another second... join us right now before the next trade targeting +200% is released!