Trex Company, (NYSE: TREX) is set to report third-quarter earnings on Oct. 27, and investors are hoping the recycled decking manufacturer can build on what has so far been a solid year. Through the first half of 2015, sales are up 16%, gross margins have improved, and earnings are at record levels for the first half of any year ever. 

Can the company keep up the momentum and build something even bigger, a la Tile Shop Holdings' (NASDAQ: TTS) recent big sales and earnings jump? Let's take a closer look at three key things investors should watch closely.

1. Continued growth in domestic sales and market share 
Over the past several years, Trex has made some pretty major strides in growing its market share:

Since the end of the recession, revenue has grown nearly 35% and earnings per share is up a whopping 613%. This has been a product of the company's market share growth, which itself was a result of the company's refocused efforts to improve its products and to expand distribution. 

Trex has invested a lot of time and expense in establishing a strong installer program, supporting the professionals who drive the bulk of the company's sales. 

Trex's business in the U.S. is heavily related to existing home sales. But while indoor projects like flooring and kitchen and bath tend to take priority, outdoor, high-dollar investments like a new or updated deck don't happen as quickly. In other words, existing home sales can be a leading indicator for Trex's near-term opportunity, but it may take many months before existing home sales translate to a tick up in deck projects. 

One good example is the recent earnings report Tile Shop Holdings turned in, with net sales jumping 25% and earnings up more than double from last year's quarter. Tile Shop reported a nearly 10% increase at stores open at least one year on strong traffic. This corresponds to pretty strong existing home sales so far in 2015, not to mention relatively strong jobs and economic numbers for the U.S. this year. 

Companies like Tile Shop Holdings are more likely to get quicker boosts from home sales than Trex, since a new homeowner is more likely to update an old kitchen or bathroom with fresh countertops than they are to replace a deck. 

That's before we even consider the seasonality, with the majority of decking projects happening in spring and early summer. To put it another way, this year's big 8.8% jump in existing home sales isn't likely to boost Trex's results before spring of 2016, while Tile Shop has likely gained sales all year. 

2. International expansion 
So far, Trex's international business hasn't gotten so large that it must report the results, but Ron Kaplan, on a call earlier this year, made the statement that it wouldn't be too much longer before the company began breaking out international sales. 

Management thinks the expansion opportunities already lined up are worth double the core decking market:

Data source: Trex presentation. 

Trex is now being sold all over the world, as the slide above shows. One of the potential benefits of international expansion is that it could help increase manufacturing efficiency. As of now, the company only makes products in the U.S., and that's unlikely to change in the near term. If the company can leverage its growth in key international markets, this should lead to higher utilization of its manufacturing, driving down unit costs and increasing margins. 

That's in addition to the obvious benefits of material sales growth. 

3. Using core competency to expand into new businesses 
Trex, has thus far proven that its move into the recycled polyethylene pellet business was shrewd. Trex is one of the country's largest buyers of used polyethylene plastic and film, a key ingredient in its decking. 

Apparently, management saw a major hole in the market for these recycled pellets, having in its past had trouble sourcing enough quantity -- particularly large quantities of a similar quality -- to meet its own needs. This led the company to begin manufacturing its own pellets, which eventually led to the decision to help serve what management sees as an underserved market for this product. 

While sales of pellets aren't expected to be large in 2015, management has been telling us to expect to see sales ramp up in the second half of the year. That starts with the upcoming earnings report. 

Looking ahead 
Trex's management has done an admirable job over the past near-decade of turning the company around and making it into a true market leader. While the cyclical nature of the economy and housing will likely always have some impact on results, its steps to grow international sales and to expand into complementary businesses that aren't as seasonal should add value and help boost returns. 

We may not get much color on the growth initiatives in the earnings release, but be sure to pay attention to the earnings call for more detail. These initiatives probably won't contribute a lot to the current quarter, but they're important for the long term. 

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.