Is Trex Co., Inc. overvalued or undervalued?

As of 10 September 2025, Trex Co., Inc. has moved from a fair to an expensive valuation grade. The company appears overvalued based on its current metrics, with a P/E ratio of 38, a Price to Book Value of 8.25, and an EV to EBITDA ratio of 24.64. In comparison, peers such as Armstrong World Industries, Inc. have a P/E of 38.75 and an EV to EBITDA of 28.31, while Mohawk Industries, Inc. shows a more attractive P/E of 17.49 and an EV to EBITDA of 8.52, highlighting Trex's relative overvaluation.
Additionally, Trex has underperformed against the S&P 500 across multiple periods, with a year-to-date return of -21.60% compared to the S&P 500's 12.22%, and a one-year return of -20.41% against the S&P 500's 17.14%. This trend reinforces the notion that Trex may be overvalued in the current market environment.