Lumber's pandemic rally has spilled over into fake alternatives, sending shares of faux-wood companies soaring

• Historically high lumber prices are driving earnings for companies that make faux-wood decks, CNBC first reported.
• Trex and Azek, are up 36% and 10%, respectively, year-to-date.
• The companies both crushed earnings in the most recent quarter.

Soaring lumber prices throughout the pandemic prompted some buyers to seek alternative building materials, and the stock prices of faux-wood producers have soared as a result.

Trex and Azek are both producers of "fake-wood decks," and have seen their stock prices and sales boom during the pandemic amid high lumber prices, according to a report from CNBC.

The companies produce decks that look like they are made of wood, but actually consist of materials including plastic, fiber, sawdust, and wood. The two companies control about 75% of the composite decking market, which is in turn about 20% of the entire $8 billion decking market, CNBC said.

Winchester, Virginia-based Trex grew sales 41% year-over-year in the second quarter of 2021, totaling $312 million. In the company's earnings report, the CEO attributed the quarter's success to sustained demand and market share gains from lumber.

Shares of Trex have gained 36% in 2021 alone, far outpacing the S&P 500's 20% rise. The faux-wood deck producer has jumped 55% since October 2020, when lumber began its surge.

Stock in Chicago based-Azek has gained about 20% since October 2020, and is up 10% year-to-date. In the company's third fiscal quarter it increased consolidated net sales 46.4% year-over-year to $327.5 million. The company went public in June 2020 and is up 56% since then.

Meanwhile, lumber is down 17% year to date, and has fallen nearly 70% from it's all-time high in May as supply and demand forces begin to even out.

According to CNBC, the success of the fake-wood deck company's isn't only attributed to high lumber prices, but also to a broader shift in consumer preferences. Some consumers believe faux-wood decks are more affordable in the long-term because they last longer than wood decks in outdoor conditions.