JFrog stock rises as Cantor Fitzgerald maintains Overweight rating after strong Q2
On Monday, DA Davidson maintained a Neutral stance on Trex Company Inc. (NYSE:TREX) shares, with a set price target of $60.00. According to InvestingPro data, the stock currently trades at an EV/EBITDA multiple of 21.87x, with 13 analysts recently revising their earnings expectations downward. Following the first quarter earnings of 2025, the research firm stood by its valuation, which is based on 17 times the projected 2025 EBITDA. Trex surpassed expectations with its top and bottom line results, despite a 9.1% revenue decline over the last twelve months. The company reaffirmed its full-year outlook, which anticipates a sales growth of 5%-7% year-over-year and EBITDA margins exceeding 31%. For deeper insights into Trex’s financial health and growth prospects, access the comprehensive Pro Research Report available exclusively on InvestingPro.
The company’s recent performance showed improvements in product sell-through during March and April, which was a positive development. However, the guidance for the second quarter of 2025 suggests that sales will remain flat compared to the same period the previous year. DA Davidson expressed a cautious perspective regarding the potential delayed effects on consumer confidence that could impact the company.
Despite the current valuation not being considered demanding by the analysts, they believe it fairly reflects the market, given the uncertainties surrounding the timeframe for Trex to return to its historical long-term double-digit growth rates. The company’s financial health and market position seem to be stable, but the cautious outlook is predicated on external economic factors that could influence consumer spending and, consequently, the company’s performance.
In other recent news, Trex Company reported its Q1 2025 earnings, revealing revenue of $340 million, which exceeded forecasts by approximately $10.88 million, and an EPS of $0.60, in line with expectations. The company’s performance was bolstered by strong demand for its premium products, despite a 9% year-over-year decline in net sales. Benchmark analysts maintained a Buy rating on Trex with a price target of $80, citing the company’s strong financial results and strategic market positioning. Meanwhile, Stephens analyst Trey Grooms adjusted Trex’s price target to $65 from $73, maintaining an Equal Weight rating due to concerns about gross margins, which fell short of expectations due to production and cost challenges. Trex’s guidance for the second quarter aligns with estimates, but the company anticipates a subdued gross margin due to ongoing cost issues. Looking ahead, Trex expects full-year net sales growth of 5-7% and an adjusted EBITDA margin exceeding 31%, driven by new product launches and operational improvements. The company continues to focus on capturing market share through its premium offerings and strategic channels, with analysts noting a positive outlook for margin improvement and free cash flow in the coming year.
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