Avante is a stock you should own, Beacon Securities says

Beacon Securities analyst Gabriel Leung maintained a “Buy” rating and C$2.25 target price on Avante (Avante Stock Quote, Chart, News, Analysts, Financials TSXV:XX) in a July 30 note following the release of fourth-quarter fiscal 2025 results. The company reported revenue of $9.3-million and EBITDA of $287,000 for the quarter ended March, ahead of Leung’s revenue estimate of $8.3-million but below his EBITDA forecast of $488,000.

Toronto-based Avante provides high-end security systems and services for residential and commercial customers, primarily in the Greater Toronto Area. The company specializes in complex security system design and installation, access control, video analytics, high-end lock services, and smart home automation.

Leung said Avante’s fourth-quarter revenue rose 29% year over year, all of it organic, with approximately 38% coming from recurring sources. Gross margins came in at 35.7%, below his estimate of 44%.

“We believe the lower-than-expected gross margins reflect revenue mix, along with increases in overtime and logistics costs and a ramp-up of operational support for new services,” he said. “We anticipate gross margins to return to the 40%+ range over the course of FY26 as the growth of new, higher margin services accelerate.”

Avante’s Services division, which includes Avante Black, generated $8.1-million in revenue during the fourth quarter, while NSSG contributed $1.35-million. The company ended the quarter with $4.7-million in cash, no debt, and $12-million in unused credit facilities.

“With the base business in relatively strong shape, we believe the company is in good position to accelerate its new growth initiatives,” Leung said.

Avante said strong demand for its specialized investigation services at Avante Black, which made up about 14% of FY25 revenue, is expected to support healthy growth in FY26. The company is ramping up production of its WALL-E towers — Avante’s autonomous surveillance towers — and reported growing interest from clients operating in remote and high-risk environments. Several high-profile opportunities could further accelerate production in the near term. Meanwhile, Avante Verified is gaining momentum among schools, institutions, and corporate entities seeking advanced safety solutions. However, growth in the U.S. education sector may be limited in the short term due to budgetary constraints.

“We believe upside to our estimates and target could potentially be driven by faster-than-expected growth in new services, notably WALL-E, along with potential acquisitions leveraging the company’s cash position and unused $12M credit facilities,” Leung said.

Leung expects Avante to generate $1.8-million in Adjusted EBITDA on $33.8-million in revenue in fiscal 2025, tapering to $1.6-million on $36.9-million in revenue for fiscal 2026.

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