Trex Company, Inc.
Thesis
Trex is positioned to benefit from favorable macro drivers in the home-building sector, particularly in the Repair & Remodel market. The company has a strong brand presence and market share in composite decking, which is expected to grow significantly as it takes market share from pressure-treated wood. Despite short-term challenges, Trex's long-term growth potential remains robust, with a projected IRR of ~24% and a target price of $84 by 2025, representing a 190% upside.
Did it work?
The stock price has decreased by 19.5% since the pitch, which contradicts the long thesis that anticipated significant growth and a target price of $84 by 2025. Given that 52 months have elapsed, which is well beyond the typical short-term challenges mentioned, the thesis has not played out as expected.
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