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Quest Resource (QRHC)
NASDAQ:QRHC
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Quest Resource (QRHC) AI Stock Analysis

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QRHC

Quest Resource

(NASDAQ:QRHC)

Rating:46Neutral
Price Target:
$2.00
▼(-8.26%Downside)
Quest Resource's overall stock score is primarily impacted by its struggling financial performance and weak valuation metrics. Although technical analysis suggests neutral momentum, the company's significant financial and operational challenges overshadow these indicators. Continued focus on cost reduction and operational improvements is necessary to improve the outlook.

Quest Resource (QRHC) vs. SPDR S&P 500 ETF (SPY)

Quest Resource Business Overview & Revenue Model

Company DescriptionQuest Resource Holding Corporation, together with its subsidiaries, provides solutions for the reuse, recycling, and disposal of various waste streams and recyclables in the United States. It offers disposal and recycling services for motor oil and automotive lubricants, oil filters, scrap tires, oily water, goods destruction, food waste, meat renderings, cooking oil and grease trap waste, plastics, cardboard, metal, glass, mixed paper, construction debris, as well as a large variety of regulated and non-regulated solid, liquid, and gas wastes. The company provides santifreeze and windshield washer fluid, dumpster and compacting equipment, and other minor ancillary services. In addition, it offers landfill diversion services. The company's services focus on the waste streams and recyclables from big box, grocers, and other retailers; automotive maintenance, quick lube, dealerships, and collision repair; transportation, logistics, and internal fleet operators; manufacturing plants; multi-family and commercial properties; restaurant chains and food operations; and construction and demolition projects. It markets its services to automotive, manufacturing, hospitality and retail, construction and demolition, and commercial and multi-family property management industries through direct sales force and strategic partnerships. The company was formerly known as Infinity Resources Holdings Corp. and changed its name to Quest Resource Holding Corporation in October 2013. Quest Resource Holding Corporation was incorporated in 2002 and is based in The Colony, Texas.
How the Company Makes MoneyQuest Resource generates revenue primarily through the provision of waste and recycling management services. The company offers customized programs that include waste collection, transportation, disposal, and recycling services to commercial, industrial, and retail clients. Key revenue streams include service fees for waste management, recycling processing, and consulting services aimed at optimizing clients' sustainability initiatives. Additionally, Quest Resource may benefit from partnerships with waste haulers and recycling facilities, which enable them to offer comprehensive and cost-effective solutions. Their earnings are influenced by service contract agreements, waste volume processed, and efficiency in managing operational costs.

Quest Resource Earnings Call Summary

Earnings Call Date:May 12, 2025
(Q1-2025)
|
% Change Since: -11.74%|
Next Earnings Date:Aug 18, 2025
Earnings Call Sentiment Neutral
The earnings call highlighted significant efforts in cost reduction and operational improvements, along with strategic changes in management and board composition. However, these positive actions were overshadowed by a decline in revenue and gross profit, increased SG&A costs, and ongoing challenges with client attrition and accounts receivable. These mixed results suggest a period of transition and restructuring for Quest.
Q1-2025 Updates
Positive Updates
Cost Reduction Initiatives
Quest implemented a series of cost reduction actions, reducing SG&A costs by $3 million on an annualized basis. Additionally, the sale of a non-core part of the RWS business generated $5 million in cash used to reduce debt.
Management and Board Enhancements
Promoted Perry Moss to CEO and added Nick Ober as SVP of Operations. Bob Lipstein, a seasoned financial executive, joined the Board of Directors.
Operational Improvements
Quest has initiated an operations excellence initiative to drive process improvements across the company, with an emphasis on performance and accountability.
Debt Flexibility
Amended debt agreements with lenders PNC and Monroe to provide increased flexibility and eased covenants through 2025.
Negative Updates
Revenue Decline
Revenue for the first quarter decreased by 6% year-over-year to $68.4 million, primarily due to lower volumes from client attrition and specific larger clients.
Gross Profit Decline
Gross profit dollars were $10.9 million, a 22% decrease from last year. The decline was attributed to customer attrition, lower volumes at larger clients, and temporary increased costs related to client onboarding.
SG&A Increase
SG&A costs increased by $1.6 million compared to last year, primarily due to separation costs and the resumption of bonus accruals.
Client Attrition
Client attrition contributed approximately $7 million to the revenue decline, including lost revenue from clients in the divested mall-related business.
Accounts Receivable Issues
DSOs remain elevated due to timing issues with collections from larger customers, impacting cash flow.
Company Guidance
During Quest Resource Holding Corporation's first quarter earnings call for 2025, the company provided guidance focusing on cost reductions, revenue impacts, and operational improvements. The sale of a non-core segment generated $5 million in cash and reduced debt, while overall costs were cut by $3 million annually. The company reported a 6% year-over-year revenue decrease to $68.4 million, primarily due to $7 million lost from client attrition and an $8 million drop in volumes from larger clients. Gross profit fell 22% year-over-year to $10.9 million, driven by client attrition, lower volumes, revenue mix shifts, and temporary cost increases. SG&A expenses rose to $11.4 million, partly due to separation costs and bonus accruals, but are expected to decrease to $9.5 million per quarter in the second half of the year. Quest aims to improve EBITDA and cash flow, enhance operational efficiency, and pay down debt, despite challenges with elevated DSOs and macroeconomic uncertainties affecting some industrial clients.

Quest Resource Financial Statement Overview

Summary
Quest Resource faces significant financial challenges. The income statement shows negative profitability margins and stagnant revenue growth. The balance sheet reveals moderate leverage but declining equity, and the cash flow statement highlights liquidity issues with negative free cash flow and operating cash flow.
Income Statement
45
Neutral
The income statement reveals a challenging financial performance. The gross profit margin is relatively stable, but the company is experiencing significant negative net income, impacting the net profit margin adversely. Revenue growth is stagnant with a slight decline in the TTM period. Both EBIT and EBITDA margins are negative, reflecting operational inefficiencies or high costs impacting profitability.
Balance Sheet
55
Neutral
The balance sheet shows a moderately leveraged position with a debt-to-equity ratio indicating reliance on debt financing. Equity ratio suggests moderate equity financing, but the declining stockholders' equity is a concern. Return on equity is negative, reflecting net losses impacting shareholder returns.
Cash Flow
40
Negative
The cash flow statement indicates a negative free cash flow and operating cash flow, suggesting liquidity challenges. The negative free cash flow growth rate underscores persistent cash flow issues, and the ratios of cash flow to net income highlight operational struggles.
BreakdownDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue288.53M288.38M284.04M155.72M98.66M
Gross Profit49.99M50.06M48.86M28.82M19.05M
EBITDA5.81M12.77M11.37M7.27M3.27M
Net Income-15.06M-7.29M-6.05M1.69M1.03M
Balance Sheet
Total Assets175.65M177.12M181.49M175.67M102.23M
Cash, Cash Equivalents and Short-Term Investments396.00K324.01K9.56M8.43M7.52M
Total Debt79.18M67.57M71.73M63.74M15.57M
Total Liabilities121.49M110.84M110.35M102.04M34.19M
Stockholders Equity54.16M66.28M71.14M73.63M68.04M
Cash Flow
Free Cash Flow-10.77M-3.26M-4.04M1.93M2.59M
Operating Cash Flow-6.08M-1.36M-2.34M2.57M3.10M
Investing Cash Flow-5.97M-1.90M-4.33M-16.93M-506.07K
Financing Cash Flow12.13M-5.98M7.81M15.27M1.51M

Quest Resource Technical Analysis

Technical Analysis Sentiment
Positive
Last Price2.18
Price Trends
50DMA
2.17
Positive
100DMA
2.52
Negative
200DMA
4.57
Negative
Market Momentum
MACD
-0.03
Negative
RSI
54.53
Neutral
STOCH
63.53
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For QRHC, the sentiment is Positive. The current price of 2.18 is above the 20-day moving average (MA) of 2.10, above the 50-day MA of 2.17, and below the 200-day MA of 4.57, indicating a neutral trend. The MACD of -0.03 indicates Negative momentum. The RSI at 54.53 is Neutral, neither overbought nor oversold. The STOCH value of 63.53 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for QRHC.

Quest Resource Risk Analysis

Quest Resource disclosed 35 risk factors in its most recent earnings report. Quest Resource reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks

Quest Resource Peers Comparison

Overall Rating
UnderperformOutperform
Sector (65)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
65
Neutral
$11.08B15.705.19%2.15%3.13%-24.94%
61
Neutral
$10.11M12.662.21%<0.01%
60
Neutral
$225.58M-41.10%-28.62%-543.45%
46
Neutral
$43.85M-44.84%-0.91%-305.99%
$17.74M-147.18%
36
Underperform
$5.57M-167.48%-100.00%24.94%
$258.30M
* Industrials Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
QRHC
Quest Resource
2.10
-6.69
-76.11%
AWX
Avalon Holdings
2.59
0.38
17.19%
PESI
Perma-Fix
12.23
-0.32
-2.55%
GWAV
Greenwave Technology Solutions
0.29
-1.15
-79.86%
AQMS
Aqua Metals
0.54
-5.82
-91.51%
AMBI
Ambipar Emergency Response
4.65
0.03
0.65%

Quest Resource Corporate Events

Shareholder Meetings
Quest Resource Holds 2025 Annual Stockholders Meeting
Neutral
Jul 10, 2025

On July 8, 2025, Quest Resource Holding Corporation held its 2025 Annual Meeting of Stockholders, where several key matters were voted on by the stockholders. These included the election of two Class I directors, an advisory vote on executive compensation, a vote on the frequency of future advisory votes on executive compensation, and the ratification of the appointment of Semple, Marchal and Cooper, LLP as the independent registered public accountant for the fiscal year ending December 31, 2025. All proposals were approved by the requisite vote of the stockholders.

The most recent analyst rating on (QRHC) stock is a Buy with a $13.00 price target. To see the full list of analyst forecasts on Quest Resource stock, see the QRHC Stock Forecast page.

Private Placements and FinancingBusiness Operations and Strategy
Quest Resource Amends Credit Agreements for Flexibility
Neutral
May 13, 2025

On May 12, 2025, Quest Resource Holding Corporation and its domestic subsidiaries entered into amendments to their existing credit agreements with Monroe Capital Management Advisors, LLC and PNC Bank, National Association. These amendments waived financial covenant testing for the first quarter of 2025 and modified interest rates and financial covenants, impacting the company’s financial flexibility and operational strategy. Additionally, an intercreditor agreement amendment was made to define the relative rights of PNC Bank and Monroe Capital concerning their collateral interests.

The most recent analyst rating on (QRHC) stock is a Buy with a $13.00 price target. To see the full list of analyst forecasts on Quest Resource stock, see the QRHC Stock Forecast page.

Executive/Board Changes
Quest Resource Modifies Board with New Cooperation Agreement
Neutral
May 7, 2025

On May 7, 2025, Quest Resource Holding Corporation entered into a Cooperation Agreement with the Wynnefield Group to modify its Board of Directors. The agreement involves increasing the board size to seven directors, appointing Robert Lipstein as a new Class III director, and including him in the Audit Committee. The agreement also outlines conditions for replacing the director if necessary and includes provisions for voting commitments, standstill, and non-disparagement during the Cooperation Period, which extends until 30 days before the 2027 Annual Meeting’s nomination deadline.

Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.Date of analysis: Jul 23, 2025