The Short Answer
Trex (TREX) has a qualitative business verdict that is HALAL and passes the known filing-based financial ratios, but the overall screen remains incomplete. Trex is the leading manufacturer of wood-alternative composite decking and outdoor-living products.
Composite-building-products manufacturing is generally permissible at the activity level. The March 31, 2026 filing reports $382.5 million of revolver borrowings, but debt/assets is 22.11% and the known asset-based ratios pass.
Current quantitative Sharia screen
Based on 10-Q figures for the period ended 2026-03-31; calculated 2026-07-15.
382.5 / 1,729.814
4.492 / 1,729.814
331.42 / 1,729.814
0 / 343.403
- Financial
- Pass
- Overall
- Incomplete
Debt/assets is 22.11%, liquidity/assets is 0.26%, receivables-plus-cash/assets is 19.16% and interest income/expense net is 0.00%; activity remains qualitative.
- Financial
- Pass
- Overall
- Incomplete
Debt, liquidity and receivables-plus-cash ratios are below the examined MSCI limits; this is not an index-membership claim and activity remains incomplete.
- Financial
- Pass
- Overall
- Incomplete
Debt/assets and identifiable liquidity/assets are below the examined Malaysia limits; this is a calculation against SAC ratios, not an official classification.
- Financial
- Not calculated
- Overall
- Incomplete
A licensed historical market-cap series is not stored; filing-based asset ratios remain documented.
Business-activity disclosure
Trex manufactures wood-alternative composite decking, railing and outdoor-living products using recycled materials. The core building-products activity is generally permissible, but the filing does not provide a universal prohibited-revenue numerator for downstream customers.
Limitation: No universal prohibited-activity revenue numerator or scholar-specific purification percentage is disclosed; customer end use remains qualitative.
Purification
The filing reports interest income/expense net of $0.000 million; no scholar-approved purification percentage is asserted.
Inputs, assumptions and primary sources
- Amounts are USD millions from Trex's March 31, 2026 Form 10-Q.
- The filing reports $382.5 million of borrowings under the revolving credit facility; operating leases are excluded.
- Cash and cash equivalents are $4.492 million, no separately identified interest-bearing securities balance is added, and accounts receivable, net are $326.928 million.
- First-quarter revenue is $343.403 million and interest income/expense net is reported as $0.000 million.
- Composite-decking and outdoor-living manufacturing remains qualitative; no universal prohibited-revenue numerator is disclosed.
This is a reproducible financial screen, not a fatwa. A failed total-assets screen can coexist with a pass under a market-cap methodology. ZakatInvest keeps the qualitative assessment separate so numerical thresholds do not erase material context.
Sharia Screening Methodology
Islamic scholars use several criteria to screen stocks:
- Business activity screen: Is the company's primary business halal?
- Debt ratio: Total debt / market cap must be under 33%
- Interest income: Interest income / total revenue must be under 5%
- Haram revenue: Revenue from haram sources must be under 5%
- Receivables ratio: Total receivables / total assets must be under 49–70% (varies by board)
Trex's Business Activity
Trex designs, manufactures, and sells:
- Composite decking: Wood-alternative decking boards from recycled materials
- Railing and outdoor living: Railing systems and outdoor-living products
- Recycled-materials processing: Reclaimed polyethylene and wood fibers as raw inputs
These are general-purpose building-products businesses — manufacturing durable composite materials for residential and commercial use. This is permissible at the activity level.
Concerns to Be Aware Of
1. End-Market Look-Through
Trex's products are sold through home-improvement-retailers and dealers to residential and commercial customers. Under standard methodology, the relevant classification is general-purpose building-products manufacturing rather than the look-through end-customer mix.
2. Business-Cycle Sensitivity
Earnings can be sensitive to residential-repair-and-remodel cycles, housing activity, consumer-discretionary spending, and resin-and-input-cost volatility. Channel-inventory swings can drive quarterly volatility. These are business-cycle and input-cost considerations rather than Sharia screen concerns.
3. Minor Interest Income
Interest income/expense net is reported as $0.000 million for the quarter. No fixed purification percentage is asserted here.
Filing-Based Ratios (March 31, 2026)
Using the latest Trex Form 10-Q (USD millions):
- Debt / total assets: 22.11% — $382.5 million of revolver borrowings
- Cash + securities / total assets: 0.26%
- Receivables + cash / total assets: 19.16%
- Interest income/expense net / revenue: 0.00%
Methodology Interpretation
These are ZakatInvest calculations from the cited filing, not claims of current index membership or an official scholar ruling:
- FTSE-style: Known financial ratios pass; activity remains qualitative.
- MSCI-style: Known financial ratios pass; this is not an index-membership claim.
- Malaysia-style: Known debt and liquidity ratios pass; this is not an official classification.
Bottom Line
Trex (TREX) has a generally permissible building-products business and passes the known filing-based ratios, including the debt/assets test despite $382.5 million of revolver borrowings. Because no universal prohibited-revenue numerator is disclosed, the overall result remains incomplete rather than a universal halal certification.
For Muslim investors seeking building-products exposure, TREX sits alongside other halal-screened names like Simpson Manufacturing (SSD) and Eagle Materials (EXP).
Want to check if another stock is halal? Use our free screener.
Open Halal Checker →