Quest Resource Holding Corporation (NASDAQ:QRHC) Just Reported, And Analysts Assigned A US$5.50 Price Target

As you might know, Quest Resource Holding Corporation (NASDAQ:QRHC) last week released its latest quarterly, and things did not turn out so great for shareholders. It was a pretty negative result overall, with revenues of US$68m missing analyst predictions by 5.0%. Worse, the business reported a statutory loss of US$0.50 per share, much larger than the analysts had forecast prior to the result. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

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Taking into account the latest results, the consensus forecast from Quest Resource Holding's three analysts is for revenues of US$295.1m in 2025. This reflects a modest 3.8% improvement in revenue compared to the last 12 months. Losses are predicted to fall substantially, shrinking 51% to US$0.58. Before this latest report, the consensus had been expecting revenues of US$304.2m and US$0.19 per share in losses. So it's pretty clear the analysts have mixed opinions on Quest Resource Holding after this update; revenues were downgraded and per-share losses expected to increase.

Check out our latest analysis for Quest Resource Holding

The average price target fell 20% to US$5.50, implicitly signalling that lower earnings per share are a leading indicator for Quest Resource Holding's valuation. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. There are some variant perceptions on Quest Resource Holding, with the most bullish analyst valuing it at US$6.00 and the most bearish at US$5.00 per share. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting Quest Resource Holding is an easy business to forecast or the the analysts are all using similar assumptions.

Of course, another way to look at these forecasts is to place them into context against the industry itself. It's pretty clear that there is an expectation that Quest Resource Holding's revenue growth will slow down substantially, with revenues to the end of 2025 expected to display 5.1% growth on an annualised basis. This is compared to a historical growth rate of 23% over the past five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 6.7% per year. Factoring in the forecast slowdown in growth, it seems obvious that Quest Resource Holding is also expected to grow slower than other industry participants.

The Bottom Line

The most important thing to take away is that the analysts increased their loss per share estimates for next year. Unfortunately, they also downgraded their revenue estimates, and our data indicates underperformance compared to the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have forecasts for Quest Resource Holding going out to 2026, and you can see them free on our platform here.

Before you take the next step you should know about the 4 warning signs for Quest Resource Holding that we have uncovered.

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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.