Quest Resource (NASDAQ:QRHC) Issues Earnings Results, Misses Expectations By $0.01 EPS

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

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 Price Performance

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

Institutional Inflows and Outflows

Several institutional investors have recently modified their holdings of QRHC. Veradace Capital Management LLC purchased a new stake in Quest Resource in the fourth quarter valued at approximately $2,336,000. Mink Brook Asset Management LLC bought a new position in shares of Quest Resource in the 2nd quarter worth $405,000. Rothschild Wealth LLC bought a new stake in shares of Quest Resource during the 4th quarter worth $274,000. Jane Street Group LLC bought a new stake in shares of Quest Resource during the 2nd quarter worth $125,000. Finally, Goldman Sachs Group Inc. grew its position in Quest Resource by 22.8% in the first quarter. Goldman Sachs Group Inc. now owns 51,990 shares of the business services provider’s stock worth $135,000 after acquiring an additional 9,647 shares in the last quarter. 48.16% of the stock is currently owned by institutional investors.

Analysts Set New Price Targets

QRHC has been the topic of a number of recent analyst reports. Zacks Research raised shares of Quest Resource from a “strong sell” rating to a “hold” rating in a report on Tuesday, July 7th. Weiss Ratings lowered shares of Quest Resource from a “sell (d-)” rating to a “sell (e+)” rating in a report on Thursday, May 21st. Two equities research analysts have rated the stock with a Hold rating and one has assigned a Sell rating to the company. According to data from MarketBeat, the company presently has an average rating of “Reduce” and a consensus target price of $2.25.

About Quest Resource

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.