Quest Resource (QRHC) AI Stock Analysis

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Quest Resource

(NASDAQ:QRHC)

Rating:46Neutral

Price Target:

$2.00

▼(-3.38%Downside)

Quest Resource faces significant challenges in financial performance, with persistent losses and cash flow issues. Weak technical indicators suggest continued downward pressure on the stock. While the earnings call shows strategic initiatives for improvement, immediate financial gains are uncertain. The corporate event's positive outlook provides some long-term potential, but overall risks remain high.

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

Market Cap

$44.47M

Dividend YieldN/A

Average Volume (3M)84.76K

Price to Earnings (P/E)―

Beta (1Y)1.17

Revenue Growth-0.91%

EPS Growth-305.99%

CountryUS

Employees224

SectorIndustrials

Sector Strength90

IndustryWaste Management

Share Statistics

EPS (TTM)-0.14

Shares Outstanding20,681,818

10 Day Avg. Volume68,080

30 Day Avg. Volume84,757

Financial Highlights & Ratios

PEG Ratio6.22

Price to Book (P/B)0.54

Price to Sales (P/S)0.00

P/FCF Ratio16.94

Enterprise Value/Market Cap0.78

Enterprise Value/Revenue0.03

Enterprise Value/Gross Profit0.78

Enterprise Value/Ebitda1.27

Forecast

1Y Price Target

$5.50

Price Target Upside165.70% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering2

Quest Resource Business Overview & Revenue Model

Company DescriptionQuest Resource Holding Corporation (QRHC) is a comprehensive environmental solutions company based in the United States. It specializes in providing a broad range of waste and recycling services to various sectors, including automotive, retail, manufacturing, and construction. The company offers services such as waste disposal, recycling, and sustainability consulting, catering to businesses seeking to enhance their environmental responsibility and manage their waste streams effectively.

How the Company Makes MoneyQuest Resource makes money primarily through its waste management and recycling services. The company charges fees for waste collection, transportation, and disposal, as well as for recycling services that help clients manage their waste streams sustainably. Additionally, Quest Resource offers sustainability consulting services, providing expertise and strategies to help businesses reduce their environmental footprint. Key revenue streams include recurring service contracts with businesses across multiple industries. Partnerships with waste processing facilities and recycling centers also play a significant role in their earnings, enabling them to offer comprehensive and integrated solutions to their clients.

Quest Resource Earnings Call Summary

Earnings Call Date:May 12, 2025

(Q1-2025)

% Change Since: -16.19%|

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

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

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

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.

TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
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
	EBIT
-14.50M	-4.46M	2.83M	1.41M	4.62M	750.27K
	EBITDA
-4.98M	5.81M	12.77M	11.37M	7.27M	3.27M
	Net Income Common Stockholders
-24.81M	-15.06M	-7.29M	-6.05M	1.69M	1.03M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
1.43M	396.00K	324.01K	9.56M	8.43M	7.52M
	Total Assets
165.66M	175.65M	177.12M	181.49M	175.67M	102.23M
	Total Debt
75.66M	79.18M	67.57M	71.73M	63.74M	15.57M
	Net Debt
74.23M	78.79M	67.24M	62.17M	55.31M	8.06M
	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

Technical Analysis Sentiment

Negative

Last Price2.07

Price Trends

50DMA

2.32

Negative

100DMA

3.36

Negative

200DMA

5.45

Negative

Market Momentum

MACD

-0.08

Negative

RSI

38.73

Neutral

STOCH

15.27

Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For QRHC, the sentiment is Negative. The current price of 2.07 is below the 20-day moving average (MA) of 2.23, below the 50-day MA of 2.32, and below the 200-day MA of 5.45, indicating a bearish trend. The MACD of -0.08 indicates Negative momentum. The RSI at 38.73 is Neutral, neither overbought nor oversold. The STOCH value of 15.27 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative 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 (66)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
Sector *	66 Neutral	$4.52B	12.34	5.41%	3.62%	4.15%	-12.18%
TPIC	49 Neutral	$60.81M	―	77.71%	―	1.71%	-3.55%
QRHC	46 Neutral	$44.47M	―	-44.84%	―	-0.91%	-305.99%
CETY	44 Neutral	$16.41M	―	-90.36%	―	-87.59%	51.14%
AQMS	36 Underperform	$8.60M	―	-167.48%	―	-100.00%	24.94%
YGMZ	35 Underperform	$91.25M	5.34	-13.60%	―	-49.19%	-1214.66%

* Industrials Sector Average

Performance Comparison

QRHC

Quest Resource

2.07

-6.98

-77.13%

AQMS

Aqua Metals

0.78

-6.84

-89.76%

TPIC

TPI Composites

1.25

-3.22

-72.04%

CETY

Clean Energy Technologies

0.28

-1.17

-80.69%

YGMZ

MingZhu Logistics Holdings

1.14

-1.73

-60.28%

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.

M&A TransactionsBusiness Operations and Strategy

Quest Resource Updates Investor Presentation on Growth Strategy

Positive

Mar 14, 2025

Quest Resource Holding Corporation has released an updated investor presentation, replacing previous versions, to be presented at investor meetings. The company emphasizes its growth strategy and focus on providing value-added services to high-value clients in strategic markets, resulting in a sustainable improvement in profitability. Quest’s transformation includes exiting low-value accounts, expanding through disciplined M&A, and achieving a 20% CAGR in revenue from 2016 to 2024. The company aims to enhance sustainability and compliance for its clients, addressing key challenges in the waste and recycling industry.

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.