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Is Quest Resource Holding's (NASDAQ:QRHC) Share Price Gain Of 221% Well Earned?

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The most you can lose on any stock (assuming you don't use leverage) is 100% of your money. But when you pick a company that is really flourishing, you can make more than 100%. Take, for example Quest Resource Holding Corporation (NASDAQ:QRHC). Its share price is already up an impressive 221% in the last twelve months. Also pleasing for shareholders was the 34% gain in the last three months. And shareholders have also done well over the long term, with an increase of 102% in the last three years.

See our latest analysis for Quest Resource Holding

There is no denying that markets are sometimes efficient, but prices do not always reflect underlying business performance. One imperfect but simple way to consider how the market perception of a company has shifted is to compare the change in the earnings per share (EPS) with the share price movement.

During the last year Quest Resource Holding grew its earnings per share, moving from a loss to a profit.

When a company has just transitioned to profitability, earnings per share growth is not always the best way to look at the share price action.

Revenue was pretty stable on last year, so deeper research might be needed to explain the share price rise.

The graphic below depicts how earnings and revenue have changed over time (unveil the exact values by clicking on the image).

earnings-and-revenue-growth
earnings-and-revenue-growth

We know that Quest Resource Holding has improved its bottom line over the last three years, but what does the future have in store? Take a more thorough look at Quest Resource Holding's financial health with this free report on its balance sheet.

A Different Perspective

It's good to see that Quest Resource Holding has rewarded shareholders with a total shareholder return of 221% in the last twelve months. That gain is better than the annual TSR over five years, which is 1.2%. Therefore it seems like sentiment around the company has been positive lately. In the best case scenario, this may hint at some real business momentum, implying that now could be a great time to delve deeper. While it is well worth considering the different impacts that market conditions can have on the share price, there are other factors that are even more important. For example, we've discovered 4 warning signs for Quest Resource Holding that you should be aware of before investing here.

For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on US exchanges.

This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.