MeritValue

TREX CO INC

TREXdata completeness 88%17 fiscal years on file
The thesis, from the filings

TREX CO INC earns about 29% on invested capital, far above its ~9% cost of capital, and has bought back 7% of its shares over 5 years — the marks of a durable business run for its owners. The estimate methods put fair value between $19.75 and $74.95 a share.Whether it’s worth owning at today’s price is the last question — and yours to answer, below.

i. The business — what you’d actually own
FigureFY 2021FY 2022FY 2023FY 2024FY 2025
Revenue$1.2B1$1.11B2$1.09B3$1.15B3$1.17B3
Net income$208.7M4$184.6M5$204.1M6$238.4M6$190.4M6
Operating cash flow$258.1M7$216.2M8$389.4M9$143.9M9$358.1M9
Capital expenditure$159.4M10$176.2M11$166.1M12$232.3M12$223.6M12
Free cash flow (derived)$98.7M7$40M8$223.3M9−$88.4M9$134.5M9
Total debt—————
Cash & equivalents$141.1M13$12.3M14$1.96M15$1.29M16$3.81M16
Diluted shares115.8M111.9M108.8M108.3M107.1M

Superscripts are receipts. Each links to the SEC filing the number came from (full list at the bottom).

ii. Your slice — ownership made literal
If you owned
shares
Net assets behind them
$96.57
your share of equity
Profit it earned you last year
$17.78
Free cash flow it threw off
$12.56
Debt you’d be carrying
—

10 shares is a claim on $96.57 of net worth that earned you $17.78 and generated $12.56 of cash last year.

iii. Is this a good business?
Moat signal · return on invested capital
29% avg · 5y
FY21 36%FY22 35%FY23 28%FY24 27%FY25 18%

It earned about 29% on invested capital, year after year, against a ~9% cost of capital — the footprint of real pricing power. Competition usually drags returns like this back down; here it hasn't.

seeing a moat in the numbers →
Management signal · capital allocation
−7% shares · 5y

Share count is down 7% over 5 years — management has been buying back stock, quietly handing owners a bigger slice.

reading capital allocation →

Signals, not verdicts — read from the filings above. Numbers don’t prove a moat; they show its footprint. You decide.

iv. What it’s worth — engine v0.1.0

The 3 estimate methods that apply put fair value between $19.75 and $74.95 a share. They rest on different assumptions, so where they diverge is the story; the Graham Number is a stricter floor, not a target.

DCF · Growth Exit 10Y
$74.95
assumptions (10)
  • riskFreeRate4.7%
  • equityRiskPremium5.0%
  • beta100.0%
  • equityWeight85.0%
  • costOfDebtSpread1.5%
  • taxRate21.0%
  • terminalGrowth2.5%
  • projectionYears10
  • fcfGrowth20.0%
  • fcfBase$134.5M
DCF · Growth Exit 5Y
$40.99
assumptions (10)
  • riskFreeRate4.7%
  • equityRiskPremium5.0%
  • beta100.0%
  • equityWeight85.0%
  • costOfDebtSpread1.5%
  • taxRate21.0%
  • terminalGrowth2.5%
  • projectionYears5
  • fcfGrowth20.0%
  • fcfBase$134.5M
Earnings Power Value
$19.75
assumptions (8)
  • riskFreeRate4.7%
  • equityRiskPremium5.0%
  • beta100.0%
  • equityWeight85.0%
  • costOfDebtSpread1.5%
  • taxRate21.0%
  • normalizedEarnings$204.1M
  • growthAssumed0.0%
Graham Number
$19.67
assumptions (1)
  • grahamMultiplier2250.0%

Different models answer different questions — which to trust when →

v. The price question — last, on purpose
Is today’s price fair?
See live price ↗
Type a price. The ledger answers.
Or set your own belief
FCF growth, next 5 years20.0%
Discount rate (WACC)8.93%
Terminal growth2.5%
At your growth, a share is worth $40.99
The three cases
Bear0.0%$17.98
Base20.0%$40.99
Bull20.0%$40.99

Bear/base/bull growth = 0% / filed history / history + 5pp. Type a price to see the return each case implies.

Default growth 20.0%= this company’s own filed history (median-to-median FCF CAGR, clamped 0–20%). Your adjustments are recorded anonymously. They become the “what do owners actually believe” dataset.

Sources — the receipts
  1. 10-K · period ending 2021-12-31 · accession 0001193125-24-046315 (RevenueFromContractWithCustomerExcludingAssessedTax)
  2. 10-K · period ending 2022-12-31 · accession 0000950170-25-025780 (RevenueFromContractWithCustomerExcludingAssessedTax)
  3. 10-K · period ending 2023-12-31 · accession 0001193125-26-068732 (RevenueFromContractWithCustomerExcludingAssessedTax)
  4. 10-K · period ending 2021-12-31 · accession 0001193125-24-046315 (NetIncomeLoss)
  5. 10-K · period ending 2022-12-31 · accession 0000950170-25-025780 (NetIncomeLoss)
  6. 10-K · period ending 2023-12-31 · accession 0001193125-26-068732 (NetIncomeLoss)
  7. 10-K · period ending 2021-12-31 · accession 0001193125-24-046315 (NetCashProvidedByUsedInOperatingActivities)
  8. 10-K · period ending 2022-12-31 · accession 0000950170-25-025780 (NetCashProvidedByUsedInOperatingActivities)
  9. 10-K · period ending 2023-12-31 · accession 0001193125-26-068732 (NetCashProvidedByUsedInOperatingActivities)
  10. 10-K · period ending 2021-12-31 · accession 0001193125-24-046315 (PaymentsToAcquirePropertyPlantAndEquipment)
  11. 10-K · period ending 2022-12-31 · accession 0000950170-25-025780 (PaymentsToAcquirePropertyPlantAndEquipment)
  12. 10-K · period ending 2023-12-31 · accession 0001193125-26-068732 (PaymentsToAcquirePropertyPlantAndEquipment)
  13. 10-K · period ending 2021-12-31 · accession 0001193125-23-051000 (CashAndCashEquivalentsAtCarryingValue)
  14. 10-K · period ending 2022-12-31 · accession 0001193125-24-046315 (CashAndCashEquivalentsAtCarryingValue)
  15. 10-K · period ending 2023-12-31 · accession 0000950170-25-025780 (CashAndCashEquivalentsAtCarryingValue)
  16. 10-K · period ending 2024-12-31 · accession 0001193125-26-068732 (CashAndCashEquivalentsAtCarryingValue)