GET DAILY SIGNALSQuest Resource Holding (QRHC) Returns to Revenue Growth in Q2 2026
Key Takeaways
- Revenue rose 7.6% year over year to $64.1 million, topping the roughly $63.55 million consensus estimate and returning the company to top-line growth.
- GAAP net loss widened to $(12.2) million, or $(0.57) per share, driven primarily by an $11.0 million non-cash goodwill impairment charge.
- Adjusted EBITDA increased to $2.8 million, up from $2.7 million a year ago and $1.8 million in the first quarter.
- Gross margin compressed to 16.3% from 18.5% a year earlier, although it improved sequentially from 15.7% in the prior quarter.
- Operating cash flow of $4.5 million supported $4.6 million of year-to-date debt reduction, underscoring ongoing balance sheet progress.
Earnings Context and Why It Matters
Quest Resource Holding Corporation, a national provider of environmental waste and recycling services, has spent recent quarters navigating subdued industrial volumes and compressed margins. The second quarter of 2026 marked a notable inflection, as management's operational excellence initiatives—cost reductions, faster collections, and a renewed focus on non-industrial end markets—began flowing through to the financials. For investors, this report matters because it tests whether the company can pair restored revenue growth with disciplined expense control and stronger cash generation, all while reducing debt. The results offer an early read on whether Quest's diversification strategy is translating into a more durable, profitable business model.
Reported Results
For the second quarter ended June 30, 2026, Quest reported revenue of $64.1 million, a 7.6% increase from $59.5 million in the prior-year period and a 3.8% sequential gain. The top line edged past the consensus estimate of roughly $63.55 million. Growth was driven by stabilizing industrial volumes and contributions from recently onboarded customers in food service, retail, and hospitality. I also checked this using Tickeron’s AI Screener to see how QRHC compares to others in the industry.
Gross profit declined 5.5% year over year to $10.4 million, while gross margin fell to 16.3% from 18.5% a year earlier, reflecting margin pressure among select industrial clients. Sequentially, gross profit rose 7.9% and gross margin improved from 15.7%. SG&A fell roughly 11% year over year to about $8.2 million, even as revenue grew.
GAAP net loss was $(12.2) million, or $(0.57) per share, including an $11.0 million non-cash goodwill impairment tied to the decline in the company's market capitalization. Excluding that charge, adjusted EBITDA rose to $2.8 million from $2.7 million a year earlier. The company generated $4.5 million in operating cash flow and reduced net notes payable by $4.6 million year to date to approximately $59.4 million.
Market Reaction and Investor Sentiment
Quest's second-quarter results presented a mixed picture for investors. The return to revenue growth, sequential gross margin improvement, meaningful SG&A reductions, and strong operating cash flow signaled that the company's turnaround efforts are gaining traction. However, the sizable non-cash goodwill impairment—triggered by a lower market capitalization—served as a reminder of the stock's recent underperformance and lingering concerns about valuation and industrial demand. Analysts and shareholders generally focused on the underlying operating trends rather than the accounting charge, which management noted had no impact on liquidity, cash flow, or debt covenant compliance. Sentiment entering and exiting the report remained cautious, with attention centered on whether margin and cash-flow momentum can be sustained.
Forward Outlook and Key Factors to Monitor
Looking ahead, investors should watch whether Quest can hold its gross margin trajectory while industrial volumes remain subdued. Management signaled expectations for gross margins to be flat to slightly up in the third quarter as volumes ramp at select larger customers. Continued progress on cost discipline will be critical, given that SG&A reductions have been a primary driver of improved profitability.
Balance sheet and cash-cycle improvements remain central to the story. The company reduced DSOs to roughly 70 days and trimmed working capital days to five. Reaching management's near-term DSO target in the mid-60s would further support debt paydown and lower interest expense.
Finally, the pace of new customer onboarding and "share of wallet" expansions in non-industrial markets will shape the revenue outlook. Management has acknowledged that sales cycles for large national accounts are elongating amid macroeconomic and geopolitical uncertainty, and rising diesel costs could pressure service delivery expenses. Investors should monitor new contract wins, industrial volume trends, and cash generation as the key signals of whether this turnaround can continue.
Exploring AI Tools for Deeper Analysis
In my own research process, I often turn to Tickeron’s AI Screener when evaluating companies like QRHC. It helps filter the market based on technical patterns, fundamentals, trends, volatility, and AI-driven signals, allowing for more efficient identification of comparable opportunities in the environmental services space. This tool has proven useful for scanning thousands of stocks with customizable filters to surface potential trade ideas and breakout candidates.
Disclaimer
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Contributor
Sergey Savastiouk, Ph.D. has a degree in Applied Mathematics from Moscow University and has extensive experience as an entrepreneur, investor, manager, and mathematician. His professional expertise is in applied mathematics, mathematical modeling, system and pattern analysis, and software and hardware system integration. He has served as the CEO of several hi-tech start-up companies and nonprofit organizations, which has given him proven capabilities in business strategy for high-tech start-up companies, market assessment, company formation, team building, product development, marketing, and sales. He has published numerous articles in journals and magazines on related fields. As a retail investor, he spent 15 years developing his proprietary trading and quantitative algorithms (now Tickeron’s A.I.), which brought him significant returns in trading the stock market. His current work and goal in founding Tickeron is to bring professional, sophisticated stock market analysis capabilities to retail investors via an easy-to-use interface.
QRHC in downward trend: 10-day moving average crossed below 50-day moving average on September 30, 2026
The 10-day moving average for QRHC crossed bearishly below the 50-day moving average on September 30, 2026. This indicates that the trend has shifted lower and could be considered a sell signal. In 12 of 13 past instances when the 10-day crossed below the 50-day, the stock continued to move higher over the following month. The odds of a continued downward trend are 90%.
Technical Analysis (Indicators)
Bearish Trend Analysis
The Momentum Indicator moved below the 0 level on October 29, 2026. You may want to consider selling the stock, shorting the stock, or exploring put options on QRHC as a result. In 85 of 109 cases where the Momentum Indicator fell below 0, the stock fell further within the subsequent month. The odds of a continued downward trend are 78%.
The Moving Average Convergence Divergence Histogram (MACD) for QRHC turned negative on October 13, 2026. This could be a sign that the stock is set to turn lower in the coming weeks. Traders may want to sell the stock or buy put options. Tickeron's A.I.dvisor looked at 48 similar instances when the indicator turned negative. In 38 of the 48 cases the stock turned lower in the days that followed. This puts the odds of success at 79%.
QRHC moved below its 50-day moving average on October 06, 2026 date and that indicates a change from an upward trend to a downward trend.
Following a 3-day decline, the stock is projected to fall further. Considering past instances where QRHC declined for three days, the price rose further in 50 of 62 cases within the following month. The odds of a continued downward trend are 81%.
The Aroon Indicator for QRHC entered a downward trend on October 27, 2026. This could indicate a strong downward move is ahead for the stock. Traders may want to consider selling the stock or buying put options.
Bullish Trend Analysis
The RSI Oscillator points to a transition from a downward trend to an upward trend -- in cases where QRHC's RSI Indicator exited the oversold zone, 23 of 36 resulted in an increase in price. Tickeron's analysis proposes that the odds of a continued upward trend are 64%.
The Stochastic Oscillator demonstrated that the ticker has stayed in the oversold zone for 2 days, which means it's wise to expect a price bounce in the near future.
Following a +5.22% 3-day Advance, the price is estimated to grow further. Considering data from situations where QRHC advanced for three days, in 152 of 232 cases, the price rose further within the following month. The odds of a continued upward trend are 66%.
QRHC may jump back above the lower band and head toward the middle band. Traders may consider buying the stock or exploring call options.
Fundamental Analysis (Ratings)
The Tickeron Valuation Rating of 24 (best 1 - 100 worst) indicates that the company is slightly undervalued in the industry. This rating compares market capitalization estimated by our proprietary formula with the current market capitalization. This rating is based on the following metrics, as compared to industry averages: P/B Ratio (0.819) is normal, around the industry mean (47.514). P/E Ratio (-1.268) is within average values for comparable stocks, (58.113). Projected Growth (PEG Ratio) (0.706) is also within normal values, averaging (1.132). Dividend Yield (0.000) settles around the average of (0.017) among similar stocks. P/S Ratio (0.118) is also within normal values, averaging (72.867).
The Tickeron PE Growth Rating for this company is 25 (best 1 - 100 worst), pointing to outstanding earnings growth. The PE Growth rating is based on a comparative analysis of stock PE ratio increase over the last 12 months compared against S&P 500 index constituents.
The Tickeron Seasonality Score of 50 (best 1 - 100 worst) indicates that the company is fair valued in the industry. The Tickeron Seasonality score describes the variance of predictable price changes around the same period every calendar year. These changes can be tied to a specific month, quarter, holiday or vacation period, as well as a meteorological or growing season.
The Tickeron Price Growth Rating for this company is 77 (best 1 - 100 worst), indicating slightly worse than average price growth. QRHC’s price grows at a lower rate over the last 12 months as compared to S&P 500 index constituents.
The Tickeron SMR rating for this company is 98 (best 1 - 100 worst), indicating weak sales and an unprofitable business model. SMR (Sales, Margin, Return on Equity) rating is based on comparative analysis of weighted Sales, Income Margin and Return on Equity values compared against S&P 500 index constituents. The weighted SMR value is a proprietary formula developed by Tickeron and represents an overall profitability measure for a stock.
The Tickeron Profit vs. Risk Rating rating for this company is 100 (best 1 - 100 worst), indicating that the returns do not compensate for the risks. QRHC’s unstable profits reported over time resulted in significant Drawdowns within these last five years. A stable profit reduces stock drawdown and volatility. The average Profit vs. Risk Rating rating for the industry is 76, placing this stock worse than average.
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General Information
a provider of recycling and resource management services
Industry EnvironmentalServices
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