Three Industrials Stocks with Warning Signs: Quest Resource, NVR, and Waste Connections.

Three industrials stocks with warning signs are Quest Resource (QRHC), NVR, and Waste Connections (WCN). Quest Resource has annual sales declines and diminishing returns on capital, while NVR has mediocre backlog growth and projected sales decline. Waste Connections faces rising costs and low returns on capital. These stocks may struggle in an unfavorable economic cycle.

Investors are closely monitoring three industrials stocks that have shown signs of struggle: Quest Resource (QRHC), NVR, and Waste Connections (WCN). Each company faces distinct challenges that may impact their performance in an unfavorable economic cycle.

Quest Resource, a waste and recycling services provider, reported a significant drop in revenue for the second quarter of 2025. The company's sales declined by 18.6% year-on-year to $59.54 million, missing analyst estimates by 17.9% [1]. The company attributed the decline to ongoing weakness in the industrial end market and the sale of its mall-related business. Despite the revenue drop, Quest Resource's adjusted EBITDA remained relatively in line with analyst estimates, indicating operational efficiencies are being implemented.

NVR, a homebuilding company, has shown mediocre backlog growth and projected sales decline. While the company's backlog growth has been stable, the projected sales decline indicates potential challenges in the housing market. NVR's stock price has been relatively flat, reflecting market concerns about its future performance.

Waste Connections, a waste management company, faces rising costs and low returns on capital. The company's costs have been increasing, which could lead to margin compression. Additionally, the company's returns on capital have been low, indicating potential inefficiencies in its operations.

Investors should closely monitor these companies' performance and management's ability to navigate these challenges. Quest Resource, NVR, and Waste Connections may struggle in an unfavorable economic cycle, but they could also benefit from market recovery or operational improvements.

References:
[1] https://finance.yahoo.com/news/qrhc-q2-deep-dive-operational-131110815.html
[2] https://www.investing.com/news/earnings/navigator-holdings-shares-drop-3-after-revenue-decline-93CH-4186533