Thesis
For the recent Q2 2018 earnings release, Trex (TREX) reported record revenue growth for the eleventh straight quarter. Trex’s Residential business unit generated $189.2M in revenue vs. company expectations of $174M. In other words, the company had expected 10.2% quarterly revenue growth for its core business unit (Residential) but got almost double that with 19.8% instead.
The surprise numbers catapulted the stock 20%+ in one day. Trex CEO Jim Cline attributed the strong sales numbers to elevated levels of consumer confidence and strong demand for wood-alternative (composite) residential outdoor decking,