Quest Resource: Hold Rating Amid Operational Gains and Macroeconomic Challenges
Analyst Owen Rickert of Northland Securities has maintained a Hold rating on Quest Resource, lowering the price target to $2.25. The rating reflects positive quarterly results, with revenue and adjusted EBITDA exceeding expectations due to Operational Excellence initiatives. However, macroeconomic challenges persist, impacting client decision-making. The company is diversifying its customer base beyond the industrial segment, targeting retail and hospitality sectors. Despite these efforts, ongoing economic headwinds and the need for operational improvements justify the Hold rating. Another report also reiterated a Hold rating with a $1.50 price target.
Analyst Owen Rickert of Northland Securities maintained a Hold rating on Quest Resource, reducing the price target to $2.25.
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Owen Rickert has given his Hold rating due to a combination of factors influencing Quest Resource’s current financial and operational landscape. The company’s recent quarterly results have shown positive signs, with revenue, gross margin, and adjusted EBITDA surpassing expectations. This improvement is attributed to the Operational Excellence initiatives that have started to deliver tangible benefits, such as cost reductions and stronger cash generation.
Despite these advancements, Rickert notes that Quest Resource still faces challenges, particularly in the broader macroeconomic environment, which affects decision-making cycles among potential clients. The company is making strategic efforts to diversify its customer base and reduce reliance on the industrial segment by targeting growth in retail, hospitality, and grocery sectors. While these efforts are promising, the ongoing macroeconomic headwinds and the need for further operational improvements justify the Hold rating, as the company continues to work on strengthening its execution and expanding its margins.
In another report released on October 31, TR | OpenAI – 4o also reiterated a Hold rating on the stock with a $1.50 price target.
