Trex Company Faces Securities Investigation as Shares Plunge 31%
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Jan 20 2026
0mins
Source: Businesswire
- Financial Performance Decline: Trex reported Q3 2025 net sales of $285 million, falling 5% below the midpoint of its guidance and showing a sequential decline of approximately 26%, indicating significant challenges in sales growth and inventory management.
- Profitability Pressure: The company experienced a 12% decline in net income per share for the nine months ended September 30, 2025, reflecting profitability pressures amid weak market demand and inventory adjustments, which could impact future investor confidence.
- Sales Guidance Revision: Trex revised its 2025 sales growth forecast down to nearly 0% and anticipates a “muted” fourth quarter, signaling a pessimistic outlook on market conditions that may lead to further stock price volatility.
- Stock Price Plunge: Following the disappointing earnings report on November 4, 2025, Trex's share price plummeted from $47.04 to $32.43, a decline of 31.07%, reflecting investor disappointment in the company's future performance and a crisis of confidence in management.
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Analyst Views on TREX
Wall Street analysts forecast TREX stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for TREX is 43.56 USD with a low forecast of 32.00 USD and a high forecast of 57.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
17 Analyst Rating
8 Buy
7 Hold
2 Sell
Moderate Buy
Current: 41.780
Low
32.00
Averages
43.56
High
57.00
Current: 41.780
Low
32.00
Averages
43.56
High
57.00
About TREX
Trex Company, Inc. is a manufacturer of wood-alternative decking and residential railing and outdoor living products and accessories, marketed under the brand name Trex. The Company’s segment is Trex Residential. Its product categories include decking and accessories, railing, and fencing. Its decking products are made in a proprietary process that combines reclaimed wood fibers and recycled polyethylene film. Its decking and accessories include Trex Signature decking, Trex Transcend Lineage decking, Trex Transcend decking, Trex Select decking, Trex Enhance decking, Trex Hideaway Fastener Collection, and Trex DeckLighting outdoor lighting system. Its Trex Transcend decking product can also be used as cladding. Its railing products include Trex Signature X-Series railing, Trex Signature Aluminum railing, Trex Transcend railing, Trex Select railing, Trex Select T-Rail, and Trex Enhance railing. Its Trex Seclusions composite fencing product is offered through two specialty distributors.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Trex Company (TREX) Under Investigation for Sales Practices, 2025 Growth Slashed to 0%
- Investigation Background: Hagens Berman is investigating Trex Company for potential undisclosed sales practices, possibly inflating sales figures by overstocking its 'pro channel' partners, leading to a downward revision of 2025 sales growth expectations from +7% to 0%.
- Stock Impact: Trex's stock plummeted 31% on November 5, 2025, resulting in a market cap loss of approximately $1.5 billion, as its Q3 report revealed net sales of $285 million, falling short of market expectations and indicating softening demand.
- Production Strategy Scrutiny: Trex claimed its 'level-loading' production strategy would reduce inventory volatility; however, the investigation will focus on whether this strategy masked a decline in end-user demand, adversely affecting financial performance.
- Investor Call to Action: Hagens Berman encourages investors who suffered losses to reach out for legal support and invites individuals with relevant information to assist in the investigation, highlighting the importance of transparency in corporate practices.
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Trex Company Faces Securities Investigation as Shares Plunge 31%
- Financial Performance Decline: Trex reported Q3 2025 net sales of $285 million, falling 5% below the midpoint of its guidance and showing a sequential decline of approximately 26%, indicating significant challenges in sales growth and inventory management.
- Profitability Pressure: The company experienced a 12% decline in net income per share for the nine months ended September 30, 2025, reflecting profitability pressures amid weak market demand and inventory adjustments, which could impact future investor confidence.
- Sales Guidance Revision: Trex revised its 2025 sales growth forecast down to nearly 0% and anticipates a “muted” fourth quarter, signaling a pessimistic outlook on market conditions that may lead to further stock price volatility.
- Stock Price Plunge: Following the disappointing earnings report on November 4, 2025, Trex's share price plummeted from $47.04 to $32.43, a decline of 31.07%, reflecting investor disappointment in the company's future performance and a crisis of confidence in management.
Continue Reading