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Quest Resource (QRHC)
NASDAQ:QRHC
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Quest Resource
(NASDAQ:QRHC)
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Rating:46Neutral
Price Target:
$2.00
▲(23.46% Upside)
Quest Resource's overall stock score is driven by significant financial challenges, including declining revenues and high leverage, which are the most impactful factors. Technical indicators suggest a bearish trend, and valuation metrics are unattractive. While there are some positive developments in operational improvements and debt reduction, these are overshadowed by ongoing revenue declines and sector challenges.
Quest Resource (QRHC) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$33.55M
Dividend YieldN/A
Average Volume (3M)57.32K
Price to Earnings (P/E)―
Beta (1Y)1.15
Revenue Growth-5.20%
EPS Growth-275.34%
CountryUS
Employees224
SectorIndustrials
Sector Strength72
IndustryWaste Management
Share Statistics
EPS (TTM)-0.04
Shares Outstanding20,712,204
10 Day Avg. Volume65,021
30 Day Avg. Volume57,317
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)N/A
P/FCF RatioN/A
Enterprise Value/Market Cap3.40
Enterprise Value/Revenue0.42
Enterprise Value/Gross Profit2.57
Enterprise Value/Ebitda-15.26
Forecast
1Y Price Target
$3.13Price Target Upside93.21% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering3
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 MoneyQRHC generates revenue through a diversified model that includes fees for waste collection, transportation, and disposal services. The company also earns income from its recycling operations, where materials are processed and sold to manufacturers for reuse. Additionally, QRHC's environmental consulting services provide clients with tailored solutions for waste management, contributing further to its revenue streams. Key partnerships with municipalities and businesses enhance its service offerings and expand its client base, while compliance with environmental regulations allows QRHC to capture opportunities in the growing market for sustainable waste management solutions.
Quest Resource Earnings Call Summary
Earnings Call Date:Aug 11, 2025
(Q2-2025)
| % Change Since: |
Next Earnings Date:Nov 17, 2025
Earnings Call Sentiment Neutral
The earnings call reflects a mixed sentiment. While Quest Resource Holding Corporation has made notable strides in operational improvements, cash flow generation, and cost management, these efforts are overshadowed by significant revenue declines and ongoing challenges in the industrial sector. The company is optimistic about future growth with new clients and process improvements, but immediate challenges persist.Q2-2025 Updates
Positive Updates
Improved Cash Flow and Debt Reduction
Generated $3.9 million in operating cash flow in Q2 and reduced debt by $6.6 million year-to-date.
Operational Improvements
Significant progress in process optimizations, resulting in improved efficiencies and a cultural shift towards operational excellence.
SG&A Reductions
SG&A expenses decreased by $2.1 million sequentially, due to workforce reduction and increased efficiencies.
New Client Wins
Secured new clients in the restaurant industry and expanded business with a national retailer, doubling the number of serviced locations.
Negative Updates
Revenue Decline
Revenue for Q2 was $59.5 million, a decrease of 19% year-over-year and 13% sequentially, primarily due to industrial market weakness and divested mall-related business.
Gross Margin Pressure
Facing margin pressure from client renewals, particularly in the industrial sector, due to economic uncertainty.
Industrial Sector Weakness
Continued weakness in the industrial sector due to economic conditions, affecting revenue.
Delayed New Client Decisions
Economic uncertainty causing delays in new client decisions, impacting the pace of adding new business.
Company Guidance
During the Quest Resource Holding Corporation's second quarter 2025 earnings call, the company provided guidance on various financial metrics while emphasizing their commitment to operational improvements and debt reduction. The company reported a revenue of $59.5 million for Q2, a 19% decrease compared to the previous year. Despite this decline, Quest generated $3.9 million in operating cash flow for the quarter and reduced its debt by $6.6 million year-to-date. Gross profit for the quarter was $11 million, showing a slight increase from the first quarter, even as revenue decreased. The company faced margin pressures due to economic uncertainties, particularly in the industrial end markets, but remains confident in its ability to drive cost savings and optimize service levels. Quest also highlighted ongoing efforts to improve cash cycle times, with a notable decrease in DSOs and improved vendor payment processes. Looking forward, the company anticipates sequential gross profit comparisons to be flat to slightly down in Q3, with expectations for resumed growth in Q4 as new client contributions and operational efficiencies take hold.Quest Resource Financial Statement Overview
Summary
Quest Resource is experiencing significant financial challenges, including declining revenues, high leverage, and weak cash flow generation. These factors indicate financial instability and potential risks if corrective measures are not implemented.Income Statement
Quest Resource's income statement reveals a challenging financial position with declining revenue and profitability. The TTM data shows a negative revenue growth rate of -4.79%, indicating a contraction in sales. The gross profit margin has decreased slightly to 16.40% from 17.33% in the previous year, while the net profit margin has worsened to -9.34%. The EBIT and EBITDA margins are also negative, reflecting operational inefficiencies and cost pressures. Overall, the income statement suggests a need for strategic improvements to reverse the declining trend.45
Neutral
Balance Sheet
The balance sheet of Quest Resource shows a high debt-to-equity ratio of 1.66, indicating significant leverage and potential financial risk. The return on equity is negative at -49.50%, reflecting poor profitability and returns for shareholders. The equity ratio stands at 28.05%, suggesting a moderate level of equity financing relative to total assets. While the company has maintained a stable asset base, the high leverage and negative ROE highlight financial vulnerabilities.50
Neutral
Cash Flow
Quest Resource's cash flow statement highlights significant challenges in cash generation. The free cash flow growth rate is negative at -67.21%, indicating a substantial decline in available cash. The operating cash flow to net income ratio is negative, suggesting that the company is not generating sufficient cash from operations to cover its net losses. The free cash flow to net income ratio is positive at 1.15, but this is due to the negative net income, not improved cash flow. Overall, the cash flow position is weak and requires attention to improve liquidity.40
Negative
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 270.70M | 288.53M | 288.38M | 284.04M | 155.72M | 98.66M |
| Gross Profit | 44.40M | 49.99M | 50.06M | 48.86M | 28.82M | 19.05M |
| EBITDA | -7.48M | 5.81M | 12.77M | 11.37M | 7.27M | 3.27M |
| Net Income | -25.27M | -15.06M | -7.29M | -6.05M | 1.69M | 1.03M |
Balance Sheet | ||||||
| Total Assets | 153.06M | 175.65M | 177.12M | 181.49M | 175.67M | 102.23M |
| Cash, Cash Equivalents and Short-Term Investments | 449.00K | 396.00K | 324.01K | 9.56M | 8.43M | 7.52M |
| Total Debt | 72.28M | 79.18M | 67.57M | 73.95M | 65.73M | 16.78M |
| Total Liabilities | 110.12M | 121.49M | 110.84M | 110.35M | 102.04M | 34.19M |
| Stockholders Equity | 42.94M | 54.16M | 66.28M | 71.14M | 73.63M | 68.04M |
Cash Flow | ||||||
| Free Cash Flow | -2.77M | -10.77M | -3.26M | -4.04M | 1.93M | 2.59M |
| Operating Cash Flow | -2.40M | -6.08M | -1.36M | -2.34M | 2.57M | 3.10M |
| Investing Cash Flow | 3.11M | -5.97M | -1.90M | -4.33M | -16.93M | -506.07K |
| Financing Cash Flow | -1.22M | 12.13M | -5.98M | 7.81M | 15.27M | 1.51M |
Quest Resource Technical Analysis
Negative
1.62
Price Trends
1.81
Negative
2.00
Negative
3.23
Negative
Market Momentum
-0.07
Negative
45.66
Neutral
54.47
Neutral
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 1.62 is below the 20-day moving average (MA) of 1.66, below the 50-day MA of 1.81, and below the 200-day MA of 3.23, indicating a bearish trend. The MACD of -0.07 indicates Negative momentum. The RSI at 45.66 is Neutral, neither overbought nor oversold. The STOCH value of 54.47 is Neutral, 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
UnderperformOutperform
Sector (63)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
51 Neutral | $183.41M | -8.83 | -32.02% | ― | -16.87% | -124.96% | |
47 Neutral | $10.18M | 86.42 | 0.32% | ― | -6.27% | 308.11% | |
46 Neutral | $33.55M | ― | -46.57% | ― | -5.20% | -275.34% | |
36 Underperform | $10.26M | -0.07 | ― | ― | -100.00% | -112.68% | |
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% |
* Industrials Sector Average
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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.