Intrinsic value of Quest Resource Holding - QRHC

Previous Close

$1.32

  Intrinsic Value

$0.00

stock screener

  Rating & Target

str. sell

-100%

Previous close

$1.32

 
Intrinsic value

$0.00

 
Up/down potential

-100%

 
Rating

str. sell

We calculate the intrinsic value of QRHC stock by summing up the current values of future distributable cash flows generated by the company and dividing the sum by the number of outstanding shares. As such, the intrinsic value calculation depends entirely on projections. The more accurate your projections of the company's performance are - the more reliable is the intrinsic value calculation result. Please make sure to check the stock valuation input data below and adjust it if necessary. The quality of the output (intrinsic valuation result) is only as good as the quality of the input. See also DISCLAIMERS.

STOCK VALUATION INPUT DATA

Revenue (in 0001), $M
Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Variable cost ratio, %
Fixed operating expenses, $M
Interest rate on debt, %
Effective corporate tax rate, %
Production assets / Revenue, %
Life of production assets, yrs
Working capital / Revenue, %
Revenue / Adjusted assets
Adjusted equity ratio
Cash flow adjustment, % of Revenue
Book value of equity, $M
Shares outstanding, mln
Market capitalization, $bln 0.0

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
   2
   3
   4
   5
   6
   7
   8
   9
   10
   11
   12
   13
   14
   15
   16
   17
   18
   19
   20
   21
   22
   23
   24
   25
   26
   27
   28
   29
   30
   31

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  2.00
  2.30
  2.57
  2.81
  3.03
  3.23
  3.41
  3.57
  3.71
  3.84
  3.95
  4.06
  4.15
  4.24
  4.31
  4.38
  4.44
  4.50
  4.55
  4.59
  4.64
  4.67
  4.70
  4.73
  4.76
  4.78
  4.81
  4.83
  4.84
  4.86
Revenue, $m
  141
  144
  148
  152
  157
  162
  167
  173
  180
  187
  194
  202
  210
  219
  229
  239
  249
  261
  272
  285
  298
  312
  327
  342
  359
  376
  394
  413
  433
  454
Variable operating expenses, $m
  147
  150
  154
  158
  163
  168
  173
  179
  186
  193
  194
  201
  210
  219
  228
  238
  249
  260
  272
  284
  297
  311
  326
  341
  358
  375
  393
  412
  432
  453
Fixed operating expenses, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total operating expenses, $m
  147
  150
  154
  158
  163
  168
  173
  179
  186
  193
  194
  201
  210
  219
  228
  238
  249
  260
  272
  284
  297
  311
  326
  341
  358
  375
  393
  412
  432
  453
Operating income, $m
  -6
  -6
  -6
  -6
  -6
  -6
  -6
  -6
  -6
  -6
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
EBITDA, $m
  3
  3
  3
  3
  3
  3
  3
  3
  3
  3
  4
  4
  4
  4
  4
  4
  5
  5
  5
  5
  5
  6
  6
  6
  7
  7
  7
  8
  8
  8
Interest expense (income), $m
  0
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  2
  2
  2
  2
  2
  2
  2
  3
  3
  3
  3
  3
  4
  4
  4
  4
Earnings before tax, $m
  -6
  -7
  -7
  -7
  -7
  -7
  -7
  -7
  -7
  -7
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -3
  -3
  -3
Tax expense, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Net income, $m
  -6
  -7
  -7
  -7
  -7
  -7
  -7
  -7
  -7
  -7
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -3
  -3
  -3

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total assets, $m
  85
  87
  90
  92
  95
  98
  101
  105
  109
  113
  118
  122
  127
  133
  138
  145
  151
  158
  165
  173
  181
  189
  198
  207
  217
  227
  238
  250
  262
  275
Adjusted assets (=assets-cash), $m
  85
  87
  90
  92
  95
  98
  101
  105
  109
  113
  118
  122
  127
  133
  138
  145
  151
  158
  165
  173
  181
  189
  198
  207
  217
  227
  238
  250
  262
  275
Revenue / Adjusted assets
  1.659
  1.655
  1.644
  1.652
  1.653
  1.653
  1.653
  1.648
  1.651
  1.655
  1.644
  1.656
  1.654
  1.647
  1.659
  1.648
  1.649
  1.652
  1.648
  1.647
  1.646
  1.651
  1.652
  1.652
  1.654
  1.656
  1.655
  1.652
  1.653
  1.651
Average production assets, $m
  35
  36
  37
  38
  39
  40
  42
  43
  45
  46
  48
  50
  52
  55
  57
  59
  62
  65
  68
  71
  74
  78
  81
  85
  89
  94
  98
  103
  108
  113
Working capital, $m
  3
  3
  3
  4
  4
  4
  4
  4
  4
  4
  4
  5
  5
  5
  5
  5
  6
  6
  6
  7
  7
  7
  8
  8
  8
  9
  9
  9
  10
  10
Total debt, $m
  7
  8
  8
  9
  10
  10
  11
  12
  13
  14
  15
  17
  18
  19
  21
  22
  24
  26
  28
  30
  32
  34
  36
  38
  41
  44
  46
  49
  52
  56
Total liabilities, $m
  22
  22
  23
  24
  24
  25
  26
  27
  28
  29
  30
  31
  33
  34
  35
  37
  39
  40
  42
  44
  46
  48
  51
  53
  56
  58
  61
  64
  67
  70
Total equity, $m
  64
  65
  67
  69
  71
  73
  75
  78
  81
  84
  87
  91
  95
  99
  103
  108
  112
  117
  123
  128
  134
  141
  147
  154
  161
  169
  177
  186
  195
  204
Total liabilities and equity, $m
  86
  87
  90
  93
  95
  98
  101
  105
  109
  113
  117
  122
  128
  133
  138
  145
  151
  157
  165
  172
  180
  189
  198
  207
  217
  227
  238
  250
  262
  274
Debt-to-equity ratio
  0.110
  0.120
  0.130
  0.130
  0.140
  0.140
  0.150
  0.160
  0.160
  0.170
  0.180
  0.180
  0.190
  0.200
  0.200
  0.210
  0.210
  0.220
  0.230
  0.230
  0.240
  0.240
  0.240
  0.250
  0.250
  0.260
  0.260
  0.270
  0.270
  0.270
Adjusted equity ratio
  0.744
  0.744
  0.744
  0.744
  0.744
  0.744
  0.744
  0.744
  0.744
  0.744
  0.744
  0.744
  0.744
  0.744
  0.744
  0.744
  0.744
  0.744
  0.744
  0.744
  0.744
  0.744
  0.744
  0.744
  0.744
  0.744
  0.744
  0.744
  0.744
  0.744

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  -6
  -7
  -7
  -7
  -7
  -7
  -7
  -7
  -7
  -7
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -3
  -3
  -3
Depreciation, amort., depletion, $m
  9
  9
  9
  9
  9
  9
  9
  9
  9
  9
  3
  3
  3
  3
  4
  4
  4
  4
  4
  4
  5
  5
  5
  5
  6
  6
  6
  6
  7
  7
Funds from operations, $m
  2
  2
  2
  2
  2
  2
  2
  2
  2
  2
  2
  2
  2
  3
  3
  3
  3
  3
  3
  3
  3
  3
  3
  3
  3
  4
  4
  4
  4
  4
Change in working capital, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash from operations, $m
  2
  2
  2
  2
  2
  2
  2
  2
  2
  2
  2
  2
  2
  2
  2
  2
  2
  3
  3
  3
  3
  3
  3
  3
  3
  3
  3
  3
  3
  4
Maintenance CAPEX, $m
  -2
  -2
  -2
  -2
  -2
  -2
  -3
  -3
  -3
  -3
  -3
  -3
  -3
  -3
  -3
  -4
  -4
  -4
  -4
  -4
  -4
  -5
  -5
  -5
  -5
  -6
  -6
  -6
  -6
  -7
New CAPEX, $m
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -3
  -3
  -3
  -3
  -3
  -3
  -4
  -4
  -4
  -4
  -4
  -5
  -5
  -5
Cash from investing activities, $m
  -3
  -3
  -3
  -3
  -3
  -3
  -4
  -4
  -5
  -5
  -5
  -5
  -5
  -5
  -5
  -6
  -7
  -7
  -7
  -7
  -7
  -8
  -9
  -9
  -9
  -10
  -10
  -11
  -11
  -12
Free cash flow, $m
  -1
  -1
  -1
  -1
  -1
  -2
  -2
  -2
  -2
  -2
  -3
  -3
  -3
  -3
  -3
  -4
  -4
  -4
  -4
  -5
  -5
  -5
  -6
  -6
  -6
  -7
  -7
  -7
  -8
  -8
Issuance/(repayment) of debt, $m
  0
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  2
  2
  2
  2
  2
  2
  2
  2
  2
  3
  3
  3
  3
  3
  3
Issuance/(repurchase) of shares, $m
  8
  8
  8
  8
  9
  9
  9
  9
  10
  10
  4
  4
  5
  5
  5
  6
  6
  6
  7
  7
  8
  8
  8
  9
  9
  10
  11
  11
  12
  12
Cash from financing (excl. dividends), $m  
  8
  9
  9
  9
  10
  10
  10
  10
  11
  11
  5
  5
  6
  6
  6
  8
  8
  8
  9
  9
  10
  10
  10
  11
  12
  13
  14
  14
  15
  15
Total cash flow (excl. dividends), $m
  8
  7
  8
  8
  8
  8
  8
  8
  9
  9
  3
  3
  3
  3
  3
  3
  4
  4
  4
  4
  5
  5
  5
  5
  6
  6
  6
  7
  7
  7
Retained Cash Flow (-), $m
  -8
  -8
  -8
  -8
  -9
  -9
  -9
  -9
  -10
  -10
  -4
  -4
  -5
  -5
  -5
  -6
  -6
  -6
  -7
  -7
  -8
  -8
  -8
  -9
  -9
  -10
  -11
  -11
  -12
  -12
Prev. year cash balance distribution, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash flow adjustment, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash available for distribution, $m
  0
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -2
  -2
  -2
  -2
  -2
  -2
  -3
  -3
  -3
  -3
  -3
  -4
  -4
  -4
  -4
  -5
  -5
  -5
Discount rate, %
  6.10
  6.41
  6.73
  7.06
  7.41
  7.79
  8.17
  8.58
  9.01
  9.46
  9.94
  10.43
  10.95
  11.50
  12.08
  12.68
  13.32
  13.98
  14.68
  15.41
  16.19
  16.99
  17.84
  18.74
  19.67
  20.66
  21.69
  22.77
  23.91
  25.11
PV of cash for distribution, $m
  0
  0
  0
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Current shareholders' claim on cash, %
  84.6
  71.8
  60.8
  51.5
  43.6
  36.9
  31.3
  26.5
  22.5
  19.1
  17.9
  16.8
  15.7
  14.6
  13.6
  12.6
  11.7
  10.8
  10.0
  9.2
  8.5
  7.9
  7.2
  6.7
  6.1
  5.6
  5.2
  4.7
  4.4
  4.0

Quest Resource Holding Corporation (QRHC) provides businesses with one-stop management programs to reuse, recycle and dispose of a range of waste streams and recyclables generated by their businesses and operate social media and online data platforms that contain information and instructions to recycle or properly dispose of household products and materials. The Company's reuse, recycling and disposal management programs are designed to enable regional and national customers to have a single point of contact for managing a range of waste streams and recyclables. Its directory of local recycling and disposal options provides guidance for the proper recycling or disposal of a range of household products and materials. Its services focuses on the waste streams and recyclables from big box, food chain and other retailers; automotive and fleet providers; hospital and other healthcare facilities, and commercial, industrial, residential and educational properties.

FINANCIAL RATIOS  of  Quest Resource Holding (QRHC)

Valuation Ratios
P/E Ratio -2.5
Price to Sales 0.1
Price to Book 0.3
Price to Tangible Book
Price to Cash Flow -5
Price to Free Cash Flow -4
Growth Rates
Sales Growth Rate 8.2%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -50%
Cap. Spend. - 3 Yr. Gr. Rate NaN%
Financial Strength
Quick Ratio NaN
Current Ratio 0
LT Debt to Equity 7.5%
Total Debt to Equity 7.5%
Interest Coverage 0
Management Effectiveness
Return On Assets -7.4%
Ret/ On Assets - 3 Yr. Avg. -7.5%
Return On Total Capital -11%
Ret/ On T. Cap. - 3 Yr. Avg. -11.1%
Return On Equity -11.8%
Return On Equity - 3 Yr. Avg. -12.3%
Asset Turnover 1.7
Profitability Ratios
Gross Margin 7.6%
Gross Margin - 3 Yr. Avg. 8%
EBITDA Margin -2.2%
EBITDA Margin - 3 Yr. Avg. -2.3%
Operating Margin -4.3%
Oper. Margin - 3 Yr. Avg. -4%
Pre-Tax Margin -4.3%
Pre-Tax Margin - 3 Yr. Avg. -4.7%
Net Profit Margin -4.3%
Net Profit Margin - 3 Yr. Avg. -4.7%
Effective Tax Rate 0%
Eff/ Tax Rate - 3 Yr. Avg. 0%
Payout Ratio 0%

QRHC stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the QRHC stock intrinsic value calculation we used $138.346327 million for the last fiscal year's total revenue generated by Quest Resource Holding. The default revenue input number comes from 0001 income statement of Quest Resource Holding. You may change it if you feel that it should be adjusted for some unusual circumstances that are not expected to be repeated in the future or if you already know (from interim financial statements, for example) that this year's revenue is going to be quite different.

Revenue growth rate. Forecasted future revenue growth rate is the most important input parameter for the intrinsic value calculation. Unlike other input parameters that are reasonably expected to be in line with their historic averages or their historic trends, the revenue growth rate by and large is a wild card: nobody really knows what the company's revenue will be in the future. Of course, the level of unpredictability is different for different industries (utility companies being the most predictable and, thus, less risky).
    We use three input parameters to forecast the revenue growth rate in our QRHC stock valuation model: a) initial revenue growth rate of 2% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 6.1%, whose default value for QRHC is calculated based on our internal credit rating of Quest Resource Holding, is applied to the cash flow expected to be received a year from now (well, actually, to be precise, in the financial year following the base year - the last year for which we have financial statements). For each consecutive year the discount rate is multiplied by the discount rate multiplier of 1.05, e.i. each year it increases by 5%. Feel free to change this number to correspond to your level of risk assessment of Quest Resource Holding.
    By the way, it is easy to set the discount rate to be constant (this would make comparison with other valuation models easier): just set the discount rate multiplier equal to 1 and chose the magnitude of the initial discount rate to your liking.

Variable cost ratio is the ratio of variable costs (i.e. costs that fluctuate with fluctuation of the volume of production) to the revenue expressed as a percentage. In the calculation of intrinsic value of QRHC stock the variable cost ratio is equal to 104.3%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $0 million in the base year in the intrinsic value calculation for QRHC stock. These expenses increase with the level of inflation in subsequent years.

Interest rate on debt is the average all-in rate of interest paid by the company on its debt. It is set at 8.1% for Quest Resource Holding.

Corporate tax rate of 27% is the nominal tax rate for Quest Resource Holding. In reality, companies find ways to pay much less taxes than that or not to pay them at all.

Cash flow adjustment could be used for any adjustment the investor deems necessary. Most commonly we use this field to account for stock options-related effects in excess of what is reported on the company's income statement. The cash flow adjustment is expressed as a percentage of the revenue, and in the current valuation of the QRHC stock is equal to 0%.

Production assets are the company's assets used for manufacturing products or provision of services. In the valuation model input table they are expressed as a percentage of revenue and for QRHC are equal to 24.9%.

Life of production assets of 16.1 years is the average useful life of capital assets used in Quest Resource Holding operations. It is used to calculate yearly capital expenditures needed to keep these assets in good order - we call it the maintenance CAPEX.

Working capital is the difference between the company's current assets and liabilities. In the model we use the ratio of working capital to revenue, which for QRHC is equal to 2.3%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $62.14773 million for Quest Resource Holding - is used in calculation of the "floor" for intrinsic valuation based on the discounted cash flow (DCF) method. Even if the prospects are very bad for a company, its assets could always be sold now for their current fair market value.

Shares outstanding of 15.313 million for Quest Resource Holding is needed to calculate the intrinsic value of one share.

Market capitalization is used here only for reference purposes and as a quick check that the share price and the number of shares outstanding numbers are correct - something especially to be cognizant about at stock splits. So, the market capitalization of Quest Resource Holding at the current share price and the inputted number of shares is $0.0 billion.

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COMPANY NEWS

▶ Quest Resource: 3Q Earnings Snapshot   [Nov-13-18 07:51PM  Associated Press]
▶ Quest Resource to Report Third Quarter Financial Results   [Nov-07-18 07:00AM  GlobeNewswire]
▶ Quest Resource: 2Q Earnings Snapshot   [Aug-14-18 04:17PM  Associated Press]
▶ Quest Resource: 1Q Earnings Snapshot   [04:32PM  Associated Press]
▶ Quest Resource reports 4Q loss   [Apr-02-18 04:31PM  Associated Press]
▶ Quest Resource reports 3Q loss   [Nov-16-17 05:14AM  Associated Press]
▶ Is It Time To Buy Quest Resource Holding Corporation (QRHC)?   [Sep-22-17 11:31AM  Simply Wall St.]
▶ Quest Resource reports 2Q loss   [Aug-14-17 10:21PM  Associated Press]
▶ Quest Resource Provides Business Update   [Aug-03-17 04:05PM  Marketwired]
▶ Quest Resource reports 1Q loss   [May-15-17 06:42PM  Associated Press]
▶ Quest Resource reports 4Q loss   [07:34AM  Associated Press]
▶ David Sweitzer Named COO of Quest Resource   [Oct-05-16 07:00AM  Marketwired]
▶ Quest Resource Adds The RMR Group as a Customer   [Sep-20-16 07:00AM  Marketwired]
▶ Quest Resource Shows Unparalleled Service and Support   [Jul-25-16 07:00AM  Marketwired]

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