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

Quest Resource (NASDAQ:QRHC) announced its quarterly earnings results on Thursday. The business services provider reported ($0.05) earnings per share (EPS) for the quarter, missing the consensus estimate 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 company had revenue of $64.07 million during the quarter, compared to analyst estimates 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 Up 18.1%

Shares of 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 company has a fifty day moving average of $1.32 and a two-hundred day moving average of $1.41. Quest Resource has a twelve month low of $0.81 and a twelve month high of $2.41. The company has a market cap of $31.61 million, a price-to-earnings ratio of -1.83 and a beta of 0.18. The company has a quick ratio of 1.28, a current ratio of 1.28 and a debt-to-equity ratio of 1.64.

Analyst Upgrades and Downgrades

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

Institutional Trading of Quest Resource

A number of hedge funds and other institutional investors have recently made changes to their positions in QRHC. Bank of America Corp DE boosted its stake in Quest Resource by 36.5% during the 4th quarter. Bank of America Corp DE now owns 15,356 shares of the business services provider’s stock valued at $100,000 after acquiring an additional 4,104 shares during the last quarter. Goldman Sachs Group Inc. increased its holdings 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 valued at $135,000 after buying an additional 9,647 shares during the last quarter. Qube Research & Technologies Ltd bought a new position in Quest Resource during the 2nd quarter worth approximately $50,000. Jane Street Group LLC acquired a new position in shares of Quest Resource in the 2nd quarter worth approximately $125,000. Finally, Mink Brook Asset Management LLC bought a new stake in Quest Resource during the second quarter valued at $405,000. Institutional investors own 48.16% of the company’s stock.

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.