Quest Resource Holding Corporat (QRHC) research, news, and more from GeoInvesting

Company description

Wed, 30 Aug 2017 16:37:15 GMT

Quest Resource Holding Corporation (QRHC) provides businesses with one-stop management programs to reuse, recycle and dispose of a range of waste streams and recyclables generated by their businesses and operate social media and online data platforms that contain information and instructions to recycle or properly dispose of household products and materials. The Company's reuse, recycling and disposal management programs are designed to enable regional and national customers to have a single point of contact for managing a range of waste streams and recyclables. Its directory of local recycling and disposal options provides guidance for the proper recycling or disposal of a range of household products and materials. Its services focuses on the waste streams and recyclables from big box, food chain and other retailers; automotive and fleet providers; hospital and other healthcare facilities, and commercial, industrial, residential and educational properties.

Research

Tue, 28 Aug 2018 15:22:10 GMT

Quest Resource Holding Corp (NASDAQ:QRHC) ($2.08; $31.8M market cap), a national leader in environmental reuse, recycling, and disposal services entered our radar as a possible turnaround story in April 2018. We issued our brief reasons for tracking discussing that after 5 years of losses, the Company has implemented a new strategic plan in 2017 that is beginning to improve the financial performance. Today, the Company issued a new investor presentation indicating the company should be GAAP profitable in Q4 2018 and expects $4+ million in Adjusted EBITDA for 2018 with top line growth resuming in 2019. A snapshot from the presentation shows some notable investment highlights:

We will continue to track the story to see if management can continue to execute its turnaround strategy.

Reasons For Tracking

Thu, 19 Apr 2018 13:51:18 GMT

** QRHC Enters Radar

Quest Resource Holding Corp (NASDAQ:QRHC) ($1.90; $29.0M market cap), a national leader in environmental reuse, recycling, and disposal services, has caught our eye as a possible turnaround story, so we have begun our preliminary due diligence.

After 5 years of operating losses, the Company has implemented a new strategic plan in 2017 to improve financial performance. We are taking our initial look at the company due to this transition and analyst estimates that call for a return to profitability in 2018 and 2019. We have no position in the stock.

Reasons For Tracking

New management with industry experience was brought in roughly two years ago with a focus on driving profitable growth. As part of the transition plan, the company has exited transactional business lines that did not meet the new minimum thresholds for returns.
Per the Q4 2017 release, it sounds as if the company’s business changes are taking a bit longer than expected and Q4 revenues were impacted as a result. However, the company expects revenues to sequentially improve throughout 2018 with accelerated growth in the second half of the year.
While EPS estimates only call for $0.02 for fiscal 2018, they jump to $0.29 for fiscal 2019. Assuming the company is able to meet these targets, applying a forward P/E of 15 on 2019 EPS estimates would eventually equate to a price target of $4.35, or an increase of over 100% from current levels. The company offered a wide range of EPS guidance for fiscal 2018: $0.03 to $0.20. We would typically view this wide range as a negative, however, given that the low end of the guidance range is a penny above current analyst estimates, it seems as though a positive upside surprise could be possible. The stock initially looks like a longer term play as the story will take time to develop.

Planned tasks:

Deeper dive into the filings
Reach out management to set up an interview

Caveats:

Transition taking longer than anticipated
Wide range of guidance for EPS. (Range has been lowered from original 2018 guidance)
Need to take closer look at the Company’s balance sheet because most of the shareholder equity is coming from intangible assets and goodwill.

Disclosure:

No position in QRHC