Core Insights - Trex (NYSE: TREX) experienced a significant decline in stock value, dropping 31% in one week due to a poorly received financial report, marking a five-year low for the company [1][2][8] - Despite achieving over 20% growth in both revenue and earnings, Trex's stock has lost more than half its value in 2025, presenting a potential buying opportunity for investors [2][8] - Trex is a leader in the composite decking market, having transformed over 5 billion pounds of polyethylene film into durable products made from 95% reclaimed and recycled materials [4][6] Financial Performance - Trex's initial costs for composite decking are higher than traditional wood, but the long-term financial benefits, including 25- to 50-year warranties, make it a more cost-effective choice over time [5][6] - The company has historically dominated the composite market with over 50% market share, yet it only holds a 14% share of the total U.S. decking and railing market [6] - Trex enjoyed 10 consecutive years of growth of 9% or better through 2021, with a peak of 36% revenue growth in 2021, but has faced challenges in the past four years due to rising mortgage rates [6][9] Market Dynamics - The surge in mortgage rates since the end of 2021 has negatively impacted Trex by making home renovations less affordable, as cash-out refinancing options have diminished [9] - Despite current challenges, the long-term outlook for Trex remains promising, as the company continues to innovate and maintain a strong position in the composite decking market [8]