Quest Resource Holding Corporation (NASDAQ:QRHC): Are Analysts Optimistic?

Quest Resource Holding Corporation (NASDAQ:QRHC) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. 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 US$55m market-cap company announced a latest loss of US$15m on 31 December 2024 for its most recent financial year result. Many investors are wondering about the rate at which Quest Resource Holding will turn a profit, with the big question being “when will the company breakeven?” In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.

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Consensus from 3 of the American Commercial Services analysts is that Quest Resource Holding is on the verge of breakeven. They expect the company to post a final loss in 2025, before turning a profit of US$1.6m in 2026. The company is therefore projected to breakeven just over a year from now. What rate will the company have to grow year-on-year in order to breakeven on this date? Using a line of best fit, we calculated an average annual growth rate of 124%, which is extremely buoyant. If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

Given this is a high-level overview, we won’t go into details of Quest Resource Holding's upcoming projects, but, take into account that generally a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.

View our latest analysis for Quest Resource Holding

Before we wrap up, there’s one issue worth mentioning. Quest Resource Holding currently has a debt-to-equity ratio of 144%. Generally, the rule of thumb is debt shouldn’t exceed 40% of your equity, and the company has considerably exceeded this. A higher level of debt requires more stringent capital management which increases the risk in investing in the loss-making company.

Next Steps:

This article is not intended to be a comprehensive analysis on Quest Resource Holding, so if you are interested in understanding the company at a deeper level, take a look at Quest Resource Holding's company page on Simply Wall St. We've also compiled a list of key factors you should further examine:

1. Valuation: What is Quest Resource Holding worth today? Has the future growth potential already been factored into the price? The intrinsic value infographic in our free research report helps visualize whether Quest Resource Holding is currently mispriced by the market.
2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Quest Resource Holding’s board and the CEO’s background .
3. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.