Information
SAN FRANCISCO, Jan. 20, 2026 (GLOBE NEWSWIRE) -- National shareholder rights firm Hagens Berman is investigating Trex Company, Inc. (NYSE:TREX) regarding potential violations of the U.S. securities laws. The
Original sourceAI Summary
Trex Company is facing an investigation by Hagens Berman over potential violations of U.S. securities laws, particularly concerning undisclosed sales practices. This has resulted in a significant stock drop following disappointing sales results and a drastic cut in sales growth forecasts for 2025. Investors should closely monitor this situation as it evolves.
Sentiment Rationale
The stock's steep decline following the earnings report indicates strong negative market sentiment. Historical data suggests prolonged legal complications typically depress share prices due to increased uncertainty and potential liabilities.
Trading Thesis
Investors should consider shorting TREX until clarity on the investigation emerges.
Market-Moving
- Continued sales declines could lead to further stock price erosion.
- Investor sentiment may worsen due to ongoing legal scrutiny.
- Any revelations about inventory practices may significantly impact earnings outlook.
- Legal outcomes may lead to fines or operational changes affecting profitability.
Key Facts
- Trex is under investigation for potential securities law violations.
- Focus on possible undisclosed sales practices and inflated sales figures.
- Stock dropped 31% after poor Q3 2025 earnings report.
- Sales growth forecast halved from +7% to 0% for 2025.
- Investors encouraged to provide information for the ongoing investigation.
Companies Mentioned
- Hagens Berman (N/A): Investigation may lead to securities class-action lawsuits against TREX.
Corporate Developments
This falls under 'Corporate Developments' as it highlights significant legal challenges and potential accounting mispractices affecting the company's credibility and value.
SAN FRANCISCO, Jan. 20, 2026 (GLOBE NEWSWIRE) -- National shareholder rights firm Hagens Berman is investigating Trex Company, Inc. (NYSE:TREX) regarding potential violations of the U.S. securities laws. The investigation focuses on whether Trex may have engaged in undisclosed sales practices and artificially inflated its sales figures by overstocking its "pro channel" partners while assuring investors that its new "level-loading" production strategy had eliminated inventory volatility.
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Investors who suffered significant losses on Trex (TREX) securities purchased are encouraged to contact the firm. The firm also encourages persons with knowledge who may be able to assist in the investigation to contact its attorneys.
TREX Investigation at a Glance
| Key Detail | Information for TREX Investors |
| Ticker Symbol | TREX (NYSE) |
| Stock Impact | 31% Drop on Nov. 5, 2025 (Loss of ~$1.5B Market Cap) |
| Key Focus | Whether TREX concealed a buildup of excess inventory at distributors |
| Core Metric | 2025 Sales Growth slashed from +7% to 0% |
| Contact HBSS | TREX@hbsslaw.com / 844-916-0895 |
Trex Company, Inc. (TREX) Investigation:
Hagens Berman is investigating a potential narrative gap that emerged in the second half of 2025. In August, Trex management told investors that their "revised inventory strategy reduces the volatility typically associated with channel stocking and de-stocking[]" and "[b]y level-loading our production, we can better manage inventory cycles, enhance operational efficiency, and reduce volatility in our quarterly results[.]" The company also called for FY 2025 sales growth of 5% to 7%.
However, on November 4, 2025, Trex stunned the market when it reported disappointing Q3 2025 financial results with net sales of $285 million coming in 5% below the mid-point of its guidance (significantly Wall Street consensus estimates), a sequential decline of about 26%.
In addition, Trex said it expected a "muted" fourth quarter, explaining in part "we expect our pro channel partners to lower their inventories through the rest of the year" and revised its 2025 sales growth guidance down to roughly 0% compared to 2024.
The news sent the price of Trex shares tumbling on November 5, 2025.
"We're focused on whether Trex was aware that demand was softening but continued to push product into the channel to meet short-term targets," said Reed Kathrein, the Hagens Berman partner leading the firm's investigation.
Frequently Asked Questions (FAQs)
What is "Level-Loading" and why is it central to the investigation? Trex claimed "level-loading" production would create operational efficiencies and steady results. The investigation seeks to determine whether this may have been used to mask a decline in end-user demand.
What caused the stock to crater? On Nov. 4, 2025, Trex reported Q3 sales that missed the midpoint of its own guidance by 5%. More importantly, it slashed its full-year 2025 outlook to flat growth, explaining that partners were now de-stocking. These disclosures led to a 31% intraday stock plunge.
If you'd like more information and answers to other frequently asked questions about the Trex investigation, read more »
Whistleblowers: Persons with non-public information regarding Trex should consider their options to help in the investigation or take advantage of the SEC Whistleblower program. Under the new program, whistleblowers who provide original information may receive rewards totaling up to 30 percent of any successful recovery made by the SEC. For more information, call Reed Kathrein at 844-916-0895 or email TREX@hbsslaw.com.
About Hagens Berman
Hagens Berman is a global plaintiffs' rights complex litigation firm focusing on corporate accountability. The firm is home to a robust practice and represents investors as well as whistleblowers, workers, consumers and others in cases achieving real results for those harmed by corporate negligence and other wrongdoings. Hagens Berman's team has secured more than $2.9 billion in this area of law. More about the firm and its successes can be found at hbsslaw.com. Follow the firm for updates and news at @ClassActionLaw.
Contact:
Reed Kathrein, 844-916-0895
