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Quest Resource (QRHC)
NASDAQ:QRHC
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Quest Resource
(NASDAQ:QRHC)
Rating:47Neutral
Price Target:
$2.00
▼(-9.91%Downside)
Quest Resource (QRHC) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$44.26M
Dividend YieldN/A
Average Volume (3M)155.61K
Price to Earnings (P/E)―
Beta (1Y)1.16
Revenue Growth-0.91%
EPS Growth-305.99%
CountryUS
Employees224
SectorIndustrials
Sector Strength86
IndustryWaste Management
Share Statistics
EPS (TTM)-0.14
Shares Outstanding20,681,818
10 Day Avg. Volume307,165
30 Day Avg. Volume155,608
Financial Highlights & Ratios
PEG Ratio0.04
Price to Book (P/B)1.67
Price to Sales (P/S)0.00
P/FCF Ratio-29.49
Enterprise Value/Market Cap0.78
Enterprise Value/Revenue0.03
Enterprise Value/Gross Profit0.78
Enterprise Value/Ebitda1.27
Forecast
1Y Price Target
$5.50Price Target Upside147.75% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering2
Quest Resource Business Overview & Revenue Model
Company DescriptionQuest Resource Holding Corporation (QRHC) is a comprehensive provider of waste and recycling solutions to businesses across various industries in North America. The company specializes in offering a wide range of services, including the management of solid waste, recycling, and sustainable resource management. Quest Resource aims to help businesses minimize their environmental impact while improving operational efficiency through tailored waste management programs.
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: -10.12%|
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 exhibits financial difficulties with negative profitability margins and cash flow challenges. The balance sheet shows moderate leverage, but declining equity and negative returns signal potential risks. Overall, the company faces significant hurdles in improving financial stability and profitability.Income Statement
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.45
Neutral
Balance Sheet
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.55
Neutral
Cash Flow
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.40
Negative
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 284.31M | 288.53M | 288.38M | 284.04M | 155.72M | 98.66M |
| Gross Profit | 44.52M | 49.99M | 50.06M | 48.86M | 28.82M | 19.05M |
| EBITDA | -4.98M | 5.81M | 12.77M | 11.37M | 7.27M | 3.27M |
| Net Income | -24.81M | -15.06M | -7.29M | -6.05M | 1.69M | 1.03M |
Balance Sheet | ||||||
| Total Assets | 165.66M | 175.65M | 177.12M | 181.49M | 175.67M | 102.23M |
| Cash, Cash Equivalents and Short-Term Investments | 1.43M | 396.00K | 324.01K | 9.56M | 8.43M | 7.52M |
| Total Debt | 75.66M | 79.18M | 67.57M | 71.73M | 63.74M | 15.57M |
| Total Liabilities | 121.30M | 121.49M | 110.84M | 110.35M | 102.04M | 34.19M |
| Stockholders Equity | 44.36M | 54.16M | 66.28M | 71.14M | 73.63M | 68.04M |
Cash Flow | ||||||
| Free Cash Flow | -8.44M | -10.77M | -3.26M | -4.04M | 1.93M | 2.59M |
| Operating Cash Flow | -5.49M | -6.08M | -1.36M | -2.34M | 2.57M | 3.10M |
| Investing Cash Flow | 840.53K | -5.97M | -1.90M | -4.33M | -16.93M | -506.07K |
| Financing Cash Flow | 5.50M | 12.13M | -5.98M | 7.81M | 15.27M | 1.51M |
Quest Resource Technical Analysis
Positive
2.22
Price Trends
2.24
Negative
2.85
Negative
5.00
Negative
Market Momentum
-0.03
Negative
51.32
Neutral
35.83
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 2.22 is above the 20-day moving average (MA) of 2.15, below the 50-day MA of 2.24, and below the 200-day MA of 5.00, indicating a neutral trend. The MACD of -0.03 indicates Negative momentum. The RSI at 51.32 is Neutral, neither overbought nor oversold. The STOCH value of 35.83 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 | $10.77B | 15.80 | 5.51% | 1.90% | 3.03% | -26.66% | |
47 Neutral | $44.26M | ― | -44.84% | ― | -0.91% | -305.99% | |
42 Neutral | $78.21M | 5.34 | -13.60% | ― | -54.57% | -171.23% | |
40 Underperform | $43.56M | ― | 77.71% | ― | 1.71% | -3.55% | |
40 Underperform | $14.53M | ― | -90.36% | ― | -87.59% | 51.14% | |
36 Underperform | $5.53M | ― | -167.48% | ― | -100.00% | 24.94% |
* Industrials Sector Average
Performance Comparison
QRHC
Quest Resource
2.22
-6.20
-73.63%
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CETY
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1.02
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Quest Resource Corporate Events
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.