Heightened Competition Pressured Trex Co. (TREX) in Q4

Core Insights - Conestoga Capital Advisors reported that US equities had solid returns in 2025, with double-digit gains across major indices, but underlying conditions showed extreme volatility and market leadership [1] - The Small Cap Strategy of Conestoga Capital Advisors returned -1.89% net of fees in Q4 2025, underperforming the Russell 2000 Growth Index's 1.22% return [1] Company Overview: Trex Company, Inc. (NYSE:TREX) - Trex Company, Inc. is a leading manufacturer of composite decking and railing products for residential outdoor living markets [3] - As of February 18, 2026, Trex's stock closed at $41.89 per share, with a one-month return of -3.43% and a 12-month decline of 35.54% [2] - The market capitalization of Trex Company, Inc. is $4.493 billion [2] Performance Analysis - In Q4 2025, Trex's performance was negatively impacted by heightened competitive intensity, including increased pricing pressure and competition from both established and lower-priced alternatives, affecting volumes and margins [3] - Despite maintaining market leadership and a strong brand, investor concerns regarding rising competition and the sustainability of near-term profitability led to the decision to sell the stock in Q4 2025 [3] Hedge Fund Interest - Trex Company, Inc. was held by 41 hedge fund portfolios at the end of Q3 2025, unchanged from the previous quarter [4] - While Trex is acknowledged for its potential as an investment, the company is not considered among the 30 most popular stocks among hedge funds, with certain AI stocks viewed as offering greater upside potential and less downside risk [4]