Is Trex Co., Inc. overvalued or undervalued?

As of 17 October 2025, the valuation grade for Trex Co., Inc. has moved from very expensive to expensive, indicating a shift towards a less severe overvaluation. Based on the current metrics, Trex appears to be overvalued. The P/E ratio stands at 38, while the EV to EBITDA ratio is 24.64, and the Price to Book Value is 8.25, all suggesting that the stock is trading at a premium compared to its earnings and book value.
In comparison to its peers, Trex's P/E ratio of 44.85 is significantly higher than Armstrong World Industries, Inc. at 38.75 and Mohawk Industries, Inc. at 17.49, both of which are considered fairly valued. Additionally, Trex has underperformed against the S&P 500, with a year-to-date return of -26.52% compared to the index's 13.30%, reinforcing the notion that the stock may be overvalued in the current market environment.