Quest Resource (NASDAQ:QRHC) Posts Quarterly Earnings Results, Misses Estimates By $0.01 EPS

Quest Resource (NASDAQ:QRHC) released its quarterly earnings data on Thursday. The business services provider reported ($0.05) EPS for the quarter, missing analysts’ consensus estimates of ($0.04) by ($0.01), Zacks reports. Quest Resource had a negative net margin of 7.07% and a negative return on equity of 13.51%. The business had revenue of $64.07 million during the quarter, compared to analysts’ expectations of $63.55 million.

Here are the key takeaways from Quest Resource’s conference call:

• Revenue returned to growth: Second-quarter revenue increased 8% year over year to $64.1 million and 4% sequentially, driven by stabilizing industrial volumes, new customer wins, and wallet-share expansions.
• Portfolio diversification is gaining traction: Quest highlighted growth across food service, retail, hospitality, and automotive markets, including nine meaningful wallet-share wins over the past year and four additional wins in the second quarter.
• Operational improvements strengthened cash generation: SG&A declined 11% year over year despite higher revenue, operating cash flow reached $4.5 million, and improved billing, collections, and vendor processes helped reduce working-capital days.
• Debt reduction continued: Quest reduced net notes payable by $4.6 million year to date, including a $2 million voluntary early payment during the quarter, and expects lower interest expense to support further paydown.
• Margins remain under pressure: Gross margin fell to 16.3% from 18.5% a year earlier, primarily because of pressure from select industrial customers; management also cautioned that macroeconomic conditions and elongated sales cycles could remain uneven.

Quest Resource Stock Performance

Shares of QRHC stock traded up $0.23 during trading hours on Friday, hitting $1.50. The stock had a trading volume of 132,240 shares, compared to its average volume of 17,356. The company has a debt-to-equity ratio of 1.64, a current ratio of 1.28 and a quick ratio of 1.28. The firm has a market capitalization of $31.61 million, a PE ratio of -1.83 and a beta of 0.18. The stock’s 50 day moving average is $1.32 and its 200 day moving average is $1.41. Quest Resource has a twelve month low of $0.81 and a twelve month high of $2.41.

Analyst Upgrades and Downgrades

Several research firms recently weighed in on QRHC. Weiss Ratings cut Quest Resource from a “sell (d-)” rating to a “sell (e+)” rating in a research note on Thursday, May 21st. Zacks Research raised shares of Quest Resource from a “strong sell” rating to a “hold” rating in a report on Tuesday, July 7th. Two research analysts have rated the stock with a Hold rating and one has given a Sell rating to the stock. According to MarketBeat, the company has a consensus rating of “Reduce” and a consensus price target of $2.25.

Institutional Inflows and Outflows

Several hedge funds and other institutional investors have recently bought and sold shares of the business. Veradace Capital Management LLC acquired a new position in Quest Resource in the fourth quarter valued at $2,336,000. Mink Brook Asset Management LLC purchased a new position in shares of Quest Resource during the second quarter worth about $405,000. Rothschild Wealth LLC purchased a new position in shares of Quest Resource during the fourth quarter worth about $274,000. Jane Street Group LLC acquired a new position in Quest Resource in the 2nd quarter valued at about $125,000. Finally, Goldman Sachs Group Inc. increased its position in Quest Resource by 22.8% in the 1st quarter. Goldman Sachs Group Inc. now owns 51,990 shares of the business services provider’s stock valued at $135,000 after acquiring an additional 9,647 shares during the period. 48.16% of the stock is owned by hedge funds and other institutional investors.

Quest Resource Company Profile

Quest 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. The company provides 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.