This Canadian security stock is a buy, analyst says

Beacon Securities analyst Gabriel Leung maintained a “Buy” rating and C$2.25 target price for Avante (Avante Stock Quote, Chart, News, Analysts, Financials TSXV:XX) in an Aug. 27 report after the company posted first-quarter fiscal 2025 results.

Avante, which provides security and safety solutions, reported revenue of $8.7-million and Adjusted EBITDA of $360,000 for the quarter ended June, compared with Leung’s forecast of $8.8-million and $97,000. Revenue rose 10.5% year over year, all organic, with recurring revenue accounting for 46% and up 25% from a year ago. Gross margin was 37.9%, flat year over year and up from 35.7% in the previous quarter.

Leung said margins should return to above 40% in fiscal 2026 as new, higher-margin services expand. Avante Services, which includes Avante Black, generated $7.1-million, while NSSG contributed $1.9-million, up from $830,000 last year. Free cash flow was negative $64,000, and the company ended the quarter with $4.7-million in cash, no debt, and $12-million in unused credit facilities.

“With WALL-E, the company noted that it was ramping up production and is gaining interest from clients operating in remote and high-risk environments,” he said. “We understand the company is involved with several high-profile opportunities, which could accelerate WALL-E tower production over the near-term.”

He added that Avante Black, now representing more than 13,” he said. of revenue, is seeing strong demand for specialized investigation services expected to support growth in fiscal 2026.

Leung also pointed to momentum in Avante Verified as schools, institutions and corporates look for new safety solutions, though he cautioned growth could be muted in the U.S. school segment given budgetary constraints.

“The base business is in relatively strong shape, and the company is in good financial position to accelerate its new growth initiatives,” he said.

Looking ahead, Leung projects Avante will post Adjusted EBITDA of $1.8-million on $33.8-million of revenue in fiscal 2025, followed by $1.6-million on $36.9-million in fiscal 2026.

-30-