We came across a bullish thesis on Quest Resource Holding Corporation (QRHC) on Lewistown Capital’s Substack by Ryan Seawell. In this article, we will summarize the bulls’ thesis on QRHC. QRHC Technologies, Inc.'s share was trading at $8.48 as of Sept 27th. QRHC’s forward P/E was 17.67 according to Yahoo Finance.

Aerial view of a landfill, with the waste management company's flagship vehicles toiling away.

Quest is a waste broker based in Dallas, TX who provides waste and recycling solutions to large companies, especially Fortune 1000 firms. Unlike traditional waste management companies, Quest doesn’t own physical assets or handle waste directly it uses a network of over 3,500 vendors to manage waste streams. This approach allows Quest to efficiently handle different types of waste across various regions including general recyclables, automotive, food, hazardous, and construction waste. Quest offers a “one-stop shop” for companies with complex waste needs, making it easier for them to reduce landfill use. Impressively, 70% of the waste Quest handles avoids landfills, compared to the national average of 32%.

Clients benefit from Quest’s expertise in sustainability, cost savings, and comprehensive data reporting, making it a compelling partner for businesses prioritizing ESG initiatives. Major clients include big-box retailers, automotive services, industrial manufacturers, restaurants, and food distributors

Quest stands out as a leading player in the waste broker industry, second only to Keter Environmental Services, and uniquely positioned to serve Fortune 1000 clients. Its platform manages diverse waste streams while offering advanced data and reporting capabilities. Quest’s pricing advantage, driven by its scale and cost leverage with vendors, strengthens its competitive edge, enabling further market penetration. Quest has demonstrated remarkable growth, tripling revenue since 2020 and quadrupling EBITDA, with expectations of continued momentum in 2024. The company benefits from high-margin, recurring revenue tied to contractual agreements, which has resulted in net revenue retention estimated between 105-110%. Quest’s strategy under CEO Ray Hatch has focused on churning low-margin business, resulting in higher profitability and long-term scalability.

The industry’s consolidation, including the challenges faced by Rubicon, further positions Quest to capture additional market share. As the waste brokerage sector shifts toward more scalable platforms, Quest’s efficiency, cost competitiveness, and technological investments provide a strong foundation for sustained growth.