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THE COLONY, Texas - Quest Resource Holding Corporation (NASDAQ:QRHC), a national leader in environmental waste and recycling services, has completed the divestiture of its tenant-direct segment of the RWS commercial property management business. The transaction, which closed on March 31, 2025, was made with Lincoln Waste Solutions, a subsidiary of Reconomy, for a total cash consideration of approximately $5 million, with the potential for additional performance-based payments not exceeding $6.5 million in total. According to InvestingPro data, this transaction comes at a crucial time for Quest, which currently operates with a market capitalization of approximately $50 million and has seen its stock decline by over 70% in the past year.
Perry W. Moss, President and CEO of Quest, stated that the sale of this non-core business line allows the company to concentrate on their primary clients in various industries, which are expected to drive growth and profitability. He emphasized that this move would also help in stabilizing financial performance and provide liquidity for debt reduction. This strategic decision appears timely, as InvestingPro analysis indicates the company faces significant debt obligations, with a debt-to-equity ratio of 1.46 and challenges in making interest payments.
The acquisition of the RWS client contracts is a strategic fit for Lincoln Waste Solutions, according to John Ayvas, CEO of Lincoln Waste. He expressed confidence in their ability to deliver strong results for these new clients due to their specialized market expertise.
The sale is part of Quest’s broader strategy to enhance operational efficiency and generate more consistent financial results, as outlined in their recent earnings call. Dan Friedberg, Chairman of Quest’s Board of Directors, mentioned that focusing on the core business and debt repayment are central to the company’s objectives.
Quest Resource Holding Corporation offers waste and recycling services that help large businesses achieve their environmental and sustainability goals. The company provides comprehensive solutions tailored to specific industry sectors, tracking and reporting the environmental outcomes of their services. While the company generated revenue of $288.5 million in the last twelve months, InvestingPro analysis suggests the stock is currently undervalued, with analysts projecting a return to profitability this year. Subscribers to InvestingPro can access 20 additional key insights about Quest’s financial health and growth prospects through the comprehensive Pro Research Report.
Lincoln Waste Solutions is known for its full-service waste and recycling management solutions, catering to multi-location businesses in North America. They focus on cost-effective and environmentally friendly strategies, supported by a vast hauler network and customer service.
This press release statement serves as the basis for the information reported.
In other recent news, Quest Resource Holdings reported its fourth-quarter 2024 financial results, which showed a significant miss on earnings per share (EPS) and revenue expectations. The company posted an EPS of -$0.09, which was well below the anticipated $0.03, and revenue reached $69.98 million, falling short of the forecasted $73.63 million. Quest Resource has initiated cost-saving measures, including a 15% workforce reduction, aimed at saving $3 million annually. The company is also implementing new systems to enhance operational efficiency. Despite the setbacks, Quest Resource remains optimistic about growth in 2025, with expectations for improvements in the second half of the year. Analyst firms have not reported any recent upgrades or downgrades for Quest Resource. Additionally, Quest Resource has announced a leadership change, with Perry Moss taking over as CEO following the retirement of Ray Hatch. The company is focusing on operational improvements to drive future performance.
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