Latest news with #TREX
The Hill
2 days ago
- Politics
- The Hill
US taking drone lessons from Russia-Ukraine war
The Trump administration is taking a page out of Ukraine's playbook when it comes to drone warfare, according to the Pentagon's chief technology officer. Emil Michael, the under secretary of Defense for research and engineering, said Russia's more than three-year invasion of Ukraine has shown the new trajectory of warfare, one that the U.S. and the rest of the world is learning from. 'When you see Ukraine and Russia, that's more likely that sort of trajectory of warfare where the front lines are not humans and tanks, the front lines are machines and robots figuring out how to counter each other. And that's a big lesson,' he told NewsNation's Mills Hayes. Michael was speaking from Indiana during the Technology Readiness Experimentation (TREX) event – a days-long demonstration of new, cutting-edge military technology in which defense companies and engineers test prototypes of war technology in front of U.S. military leaders. The Trump administration is using such events to figure out how to quickly equip troops with small, easily replaced drones, an action it struggles with compared to the likes of adversaries including China, Russia and Iran. While the United States has mastered the development of large, complex and expensive unmanned aircraft such as the Predator and Reaper, its industrial base has struggled to keep up on producing the smaller, inexpensive drones that have come to define the conflicts in Ukraine and Middle East. But Michael said the Pentagon has learned a few things from the Russia-Ukraine war, including that it's the warfighters as much as defense companies that will need to be part of what he calls 'the innovation loop,' or adjusting drone technology to fit the current conflict. 'These drones are changing in capabilities every three-to-four weeks, which is staggering, right?' said Michael, referring to Ukraine's development of new drone types and tactics in the war, including swarm capabilities – forcing both sides to develop countermeasures and adapt their strategies. 'The warfighters, the people who are actually operating these drones are the ones who are actually improving them. They're in some cases writing software. They're saying, 'well, what if we do this?' And they're doing the experimentation at the very lowest level of the warfighter,' he said. 'That's a totally new way of thinking.' The on-the-ground spontaneity is a departure from the typical route of a large weapons system being delivered to U.S. troops, who are trained on how to use them ahead of time. 'Now we're going to rely on the warfighters to be part of the innovation loop. And that's what the war in Ukraine and Russia taught us,' Michael said. Drones are the new front line of modern conflicts, featuring prominently in Russia's war in Ukraine and Israel's conflicts in the Middle East. That was on full display in June with Ukraine's Operation Spiderweb. In that operation, Kyiv for months smuggled hundreds of small drones deep inside Russia for a coordinated strike that destroyed upwards of 40 Russian warplanes on five airbases across the country. Drone also make up for a large amount of casualties in Russia's strikes on Ukrainian cities, which have only grown in intensity since earlier this year.
Yahoo
05-08-2025
- Business
- Yahoo
Trex's (NYSE:TREX) Q2 Sales Top Estimates
Composite decking and railing products manufacturer Trex Company (NYSE:TREX) beat Wall Street's revenue expectations in Q2 CY2025, with sales up 3% year on year to $387.8 million. On the other hand, next quarter's revenue guidance of $300 million was less impressive, coming in 1% below analysts' estimates. Its non-GAAP profit of $0.73 per share was 2.8% above analysts' consensus estimates. Is now the time to buy Trex? Find out in our full research report. Trex (TREX) Q2 CY2025 Highlights: Revenue: $387.8 million vs analyst estimates of $377.1 million (3% year-on-year growth, 2.8% beat) Adjusted EPS: $0.73 vs analyst estimates of $0.71 (2.8% beat) Adjusted EBITDA: $122 million vs analyst estimates of $117.9 million (31.5% margin, 3.5% beat) Revenue Guidance for Q3 CY2025 is $300 million at the midpoint, below analyst estimates of $303.1 million Operating Margin: 26.4%, down from 31.1% in the same quarter last year Free Cash Flow Margin: 52.3%, up from 42% in the same quarter last year Market Capitalization: $6.8 billion 'Our prominent position in both the pro channel and home centers enabled Trex to deliver another quarter of sales performance that exceeded expectations,' said Bryan Fairbanks, President and CEO. Company Overview Addressing the demand for aesthetically-pleasing and unique outdoor living spaces, Trex Company (NYSE:TREX) makes wood-alternative decking, railing, and patio furniture. Revenue Growth Examining a company's long-term performance can provide clues about its quality. Any business can put up a good quarter or two, but the best consistently grow over the long haul. Thankfully, Trex's 7.7% annualized revenue growth over the last five years was decent. Its growth was slightly above the average industrials company and shows its offerings resonate with customers. Long-term growth is the most important, but within industrials, a half-decade historical view may miss new industry trends or demand cycles. Trex's annualized revenue growth of 7.6% over the last two years aligns with its five-year trend, suggesting its demand was stable. This quarter, Trex reported modest year-on-year revenue growth of 3% but beat Wall Street's estimates by 2.8%. Company management is currently guiding for a 28.4% year-on-year increase in sales next quarter. Looking further ahead, sell-side analysts expect revenue to grow 13% over the next 12 months, an improvement versus the last two years. This projection is noteworthy and suggests its newer products and services will catalyze better top-line performance. Software is eating the world and there is virtually no industry left that has been untouched by it. That drives increasing demand for tools helping software developers do their jobs, whether it be monitoring critical cloud infrastructure, integrating audio and video functionality, or ensuring smooth content streaming. Click here to access a free report on our 3 favorite stocks to play this generational megatrend. Operating Margin Operating margin is one of the best measures of profitability because it tells us how much money a company takes home after procuring and manufacturing its products, marketing and selling those products, and most importantly, keeping them relevant through research and development. Trex has been a well-oiled machine over the last five years. It demonstrated elite profitability for an industrials business, boasting an average operating margin of 24.5%. This result isn't surprising as its high gross margin gives it a favorable starting point. Looking at the trend in its profitability, Trex's operating margin decreased by 3.3 percentage points over the last five years. This raises questions about the company's expense base because its revenue growth should have given it leverage on its fixed costs, resulting in better economies of scale and profitability. In Q2, Trex generated an operating margin profit margin of 26.4%, down 4.6 percentage points year on year. Since Trex's operating margin decreased more than its gross margin, we can assume it was less efficient because expenses such as marketing, R&D, and administrative overhead increased. Earnings Per Share Revenue trends explain a company's historical growth, but the long-term change in earnings per share (EPS) points to the profitability of that growth – for example, a company could inflate its sales through excessive spending on advertising and promotions. Trex's EPS grew at an unimpressive 4.5% compounded annual growth rate over the last five years, lower than its 7.7% annualized revenue growth. This tells us the company became less profitable on a per-share basis as it expanded due to non-fundamental factors such as interest expenses and taxes. We can take a deeper look into Trex's earnings to better understand the drivers of its performance. As we mentioned earlier, Trex's operating margin declined by 3.3 percentage points over the last five years. This was the most relevant factor (aside from the revenue impact) behind its lower earnings; interest expenses and taxes can also affect EPS but don't tell us as much about a company's fundamentals. Like with revenue, we analyze EPS over a shorter period to see if we are missing a change in the business. For Trex, its two-year annual EPS growth of 10.7% was higher than its five-year trend. This acceleration made it one of the faster-growing industrials companies in recent history. In Q2, Trex reported adjusted EPS at $0.73, down from $0.80 in the same quarter last year. Despite falling year on year, this print beat analysts' estimates by 2.8%. Over the next 12 months, Wall Street expects Trex's full-year EPS of $1.79 to grow 34.1%. Key Takeaways from Trex's Q2 Results We enjoyed seeing Trex beat analysts' revenue expectations this quarter. We were also happy its EBITDA outperformed Wall Street's estimates. On the other hand, its revenue guidance for next quarter slightly missed. Overall, this print was mixed. The stock remained flat at $64.50 immediately following the results. Sure, Trex had a solid quarter, but if we look at the bigger picture, is this stock a buy? The latest quarter does matter, but not nearly as much as longer-term fundamentals and valuation, when deciding if the stock is a buy. We cover that in our actionable full research report which you can read here, it's free. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
24-06-2025
- Business
- Yahoo
Trex Company, Inc. (TREX): A Bull Case Theory
We came across a bullish thesis on Trex Company, Inc. (TREX) on Stock Analysis Compilation's Substack. In this article, we will summarize the bulls' thesis on TREX. Trex Company, Inc. (TREX)'s share was trading at $57.09 as of 12th June. TREX's trailing and forward P/E were 31.2 and 25.45 respectively according to Yahoo Finance. Pixabay/Public Domain Trex is the world's leading manufacturer of composite decking and railing, uniquely positioned to benefit from the long-term structural shift away from traditional wood decking. As homeowners increasingly prioritize durability and low maintenance, composite materials have steadily gained market share over the past two decades, with Trex emerging as the dominant brand. The company's scale affords it meaningful cost efficiencies and superior distribution capabilities, reinforcing its competitive moat as composite adoption continues to rise, currently representing only about 25% of the total decking market. This leaves ample room for growth as more consumers convert from wood to composite solutions. Trex also boasts a highly regarded management team, a clean balance sheet, and consistent free cash flow generation, all underpinned by strong returns on capital. While near-term sentiment has been weighed down by persistent weakness in the housing market, the long-term investment case remains compelling. With a resilient business model supported by secular tailwinds, Trex is well-positioned to capture incremental share as the composite category expands. The recent pullback in the stock may present an attractive entry point for investors looking to gain exposure to a clear market leader with structural growth drivers, operational discipline, and robust financial health. Previously, we covered a on James Hardie Industries (JHX) which operates in the same industry, highlighting the potential upside from its AZEK acquisition, margin expansion, and improving free cash flow, despite execution and integration risks. Stock Analysis Compilation summarizes the hedge fund investment thesis on Trex Company, Inc. (TREX), reinforcing the structural growth in composite decking, emphasizing its market leadership, operational discipline, and strong secular tailwinds. Together, they showcase complementary plays on durable home exterior trends with varying risk/reward profiles. Trex Company, Inc. (TREX) is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 37 hedge fund portfolios held Trex Company, Inc. (TREX) at the end of the first quarter which was 30 in the previous quarter. While we acknowledge the risk and potential of TREX as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an extremely cheap AI stock that is also a major beneficiary of Trump tariffs and onshoring, see our free report on the best short-term AI stock. READ NEXT: 8 Best Wide Moat Stocks to Buy Now and 30 Most Important AI Stocks According to BlackRock. Disclosure: None. This article was originally published at Insider Monkey. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
10-06-2025
- Business
- Yahoo
TREX Q1 Earnings Call: New Product Mix and Distribution Strategy Drive Outlook Amid Margin Pressures
Composite decking and railing products manufacturer Trex Company (NYSE:TREX) reported revenue ahead of Wall Street's expectations in Q1 CY2025, but sales fell by 9% year on year to $340 million. Its non-GAAP profit of $0.60 per share was in line with analysts' consensus estimates. Is now the time to buy TREX? Find out in our full research report (it's free). Revenue: $340 million vs analyst estimates of $328.4 million (9% year-on-year decline, 3.5% beat) Adjusted EPS: $0.60 vs analyst estimates of $0.59 (in line) Adjusted EBITDA: $95.91 million vs analyst estimates of $99.59 million (28.2% margin, 3.7% miss) Operating Margin: 24%, down from 31.9% in the same quarter last year Organic Revenue fell 9% year on year (56.5% in the same quarter last year) Market Capitalization: $6.12 billion Management pointed to robust demand for Trex's premium composite decking and railing products as a key factor behind higher-than-expected sales in the latest quarter, despite a year-over-year revenue decline. CEO Bryan Fairbanks highlighted that new product launches contributed 22% of trailing 12-month sales, more than twice last year's level, underscoring the company's emphasis on portfolio innovation. Channel inventory practices also played a role, with the company implementing a new inventory strategy to reduce volatility and better align production with market demand. Management also cited distribution enhancements and dealer conversions as supporting factors during the quarter. Looking ahead, management expects mid to high-single-digit sales growth for the year, supported by continued momentum in premium and entry-level product lines and further expansion in the railing segment. Fairbanks expressed confidence that Trex will outperform the broader repair and remodel market, referencing pent-up demand and market share gains as drivers. CFO Brenda Lovcik added that margin improvements are anticipated in the second half, as costs associated with product changeovers and new manufacturing initiatives subside. Management remains watchful of potential headwinds, such as tariffs on aluminum and steel, but has initiated mitigation strategies including supplier diversification and inventory planning. Management attributed quarterly results to strong uptake of recently launched products, expanded dealer relationships, and ongoing investments in manufacturing and digital transformation. New product launches: Products introduced in the past three years now account for 22% of sales, with management highlighting consumer and contractor enthusiasm for features like the SunComfortable technology, originally developed for the Transcend Lineage line and now expanded to other offerings. Dealer conversions and channel strategy: Trex accelerated dealer conversions and TrexPro contractor recruitment, aided by last year's distribution enhancements, leading to improved brand alignment and market reach. Inventory strategy shift: The company's new approach to inventory management aims to reduce quarterly volatility and ensure partners are stocked appropriately, allowing more consistent production and improved operating efficiency. Manufacturing investment: The Arkansas campus began producing recycled plastic pellets, reducing reliance on external suppliers and supporting cost efficiency across manufacturing sites. This milestone advances Trex's broader continuous improvement program. Segment performance: While demand for premium products remained strong, the entry-level segment began to recover, supported by refined product specifications and expanded color options in the mid-tier Select line. Railing products also saw double-digit growth, benefiting from expanded distributor partnerships. Trex's management sees product innovation, distribution expansion, and operational improvements as central to its growth and margin outlook for the remainder of the year. Product mix evolution: Continued investment in new products, including expanded color options and proprietary technologies, is expected to drive share gains in both the premium and entry-level segments. Management believes this will help Trex outpace the broader repair and remodel market. Operational efficiency gains: The ongoing ramp-up of the Arkansas manufacturing campus and continuous improvement initiatives are projected to enhance margins, particularly as costs tied to product transitions diminish in the second half of the year. Tariff and supply chain mitigation: While less than 5% of cost of sales is directly exposed to tariffs, Trex is taking proactive steps such as supplier diversification, inventory pre-builds, and negotiations with vendors to offset potential cost pressures. Management is monitoring the regulatory environment for further impacts. In upcoming quarters, the StockStory team will watch (1) whether new product introductions continue to gain traction among both contractors and consumers, (2) the pace and impact of expanded distributor relationships on geographic and segment growth, and (3) margin progression as the Arkansas facility ramps up and one-time costs decline. Execution on inventory management and tariff mitigation will also remain important indicators of operational effectiveness. Trex currently trades at a forward P/E ratio of 25.8×. At this valuation, is it a buy or sell post earnings? See for yourself in our full research report (it's free). Donald Trump's victory in the 2024 U.S. Presidential Election sent major indices to all-time highs, but stocks have retraced as investors debate the health of the economy and the potential impact of tariffs. While this leaves much uncertainty around 2025, a few companies are poised for long-term gains regardless of the political or macroeconomic climate, like our Top 9 Market-Beating Stocks. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025). Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-small-cap company Comfort Systems (+782% five-year return). Find your next big winner with StockStory today. Error while retrieving data Sign in to access your portfolio Error while retrieving data Error while retrieving data Error while retrieving data Error while retrieving data
Yahoo
30-05-2025
- Business
- Yahoo
2 Profitable Stocks Worth Investigating and 1 to Think Twice About
A company with profits isn't always a great investment. Some struggle to maintain growth, face looming threats, or fail to reinvest wisely, limiting their future potential. A business making money today isn't necessarily a winner, which is why we analyze companies across multiple dimensions at StockStory. That said, here are two profitable companies that leverage their financial strength to beat the competition and one best left off your watchlist. Trailing 12-Month GAAP Operating Margin: 24% Addressing the demand for aesthetically-pleasing and unique outdoor living spaces, Trex Company (NYSE:TREX) makes wood-alternative decking, railing, and patio furniture. Why Do We Think Twice About TREX? 5.4% annual revenue growth over the last two years was slower than its industrials peers Capital intensity has ramped up over the last five years as its free cash flow margin decreased by 3.9 percentage points Diminishing returns on capital suggest its earlier profit pools are drying up Trex's stock price of $56.42 implies a valuation ratio of 25.5x forward P/E. If you're considering TREX for your portfolio, see our FREE research report to learn more. Trailing 12-Month GAAP Operating Margin: 18.1% With low-pressure heating systems as the first product, Trane (NYSE:TT) designs, manufactures, and sells HVAC and refrigeration systems, the former to commercial and residential building customers and the latter to commercial truck manufacturers. Why Is TT a Good Business? Annual revenue growth of 11.6% over the past two years was outstanding, reflecting market share gains this cycle Share buybacks catapulted its annual earnings per share growth to 23.7%, which outperformed its revenue gains over the last two years Stellar returns on capital showcase management's ability to surface highly profitable business ventures, and its rising returns show it's making even more lucrative bets Trane Technologies is trading at $430.30 per share, or 33.1x forward P/E. Is now the right time to buy? Find out in our full research report, it's free. Trailing 12-Month GAAP Operating Margin: 28.2% Pioneering minimally invasive surgery since its first da Vinci system was FDA-cleared in 2000, Intuitive Surgical (NASDAQ:ISRG) develops and manufactures robotic-assisted surgical systems that enable minimally invasive procedures across various medical specialties. Why Should ISRG Be on Your Watchlist? System Placement averaged 11.8% growth over the past two years and imply healthy demand for its products Sales outlook for the upcoming 12 months implies the business will stay on its desirable two-year growth trajectory Earnings growth has easily exceeded the peer group average over the last five years as its EPS has compounded at 12.3% annually At $555.52 per share, Intuitive Surgical trades at 66.3x forward P/E. Is now the time to initiate a position? See for yourself in our comprehensive research report, it's free. Donald Trump's victory in the 2024 U.S. Presidential Election sent major indices to all-time highs, but stocks have retraced as investors debate the health of the economy and the potential impact of tariffs. While this leaves much uncertainty around 2025, a few companies are poised for long-term gains regardless of the political or macroeconomic climate, like our Top 9 Market-Beating Stocks. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025). Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-micro-cap company Kadant (+351% five-year return). Find your next big winner with StockStory today for free. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
