Avante. Buy, Sell or Hold?

Beacon Securities analyst Gabriel Leung maintained a “Buy” rating and $2.25 target price on Avante (Avante Stock Quote, Chart, News, Analysts, Financials TSXV:XX) in a Dec. 1 report after the company posted second-quarter fiscal 2026 results that exceeded his expectations.

The Toronto-based security-services provider reported $8.9-million in Q2 FY26 revenue, up 10% year over year and above Leung’s $8.6-million estimate. EBITDA was $584,000, also ahead of his $84,000 forecast. Roughly 47% of revenue came from recurring services, rising 14% year over year. Gross margin improved sequentially to 41.8%, though down modestly from 43% a year earlier.

CEO Manny Mounouchos said the second quarter “continued to build on the momentum we established earlier this year, with revenue increasing 10% year-over-year, driven by strong performances in both NSSG and Avante Black, with growth of 47% and 48%, respectively.”

He added that these specialized divisions “underscore the strength of our differentiated approach” and noted that NSSG’s international footprint now spans multiple continents. On the monitoring side, Avante advanced its HALO-powered ecosystem, including the rebranding of WALL-E to MAST, its mobile automated surveillance tower.

“As we move into the second half of fiscal 2026, we remain focused on disciplined growth, expanding our recurring revenue base, increasing our profitability, and delivering elite, tech-enabled security solutions that set a new standard for our industry,” Mounouchos said.

Leung highlighted that Avante Services, including the high-end Avante Black offering, remained the main growth engine. Avante Services revenue reached $7.9-million, while NSSG contributed $1.3-million, up from $887,000 last year. Avante Black grew to $1.2-million from $800,000.

Free cash flow was ( $76,000), and the company ended the quarter with $4.3-million in cash, no debt, and $12-million in undrawn credit facilities. Management reiterated expectations for 15% organic growth in FY26 and EBITDA margins “approaching 15%,” though Leung’s model remains more conservative.

He also flagged emerging growth levers: international NSSG expansion, continued momentum in Avante Black, and early customer pilots for the MAST surveillance unit, with 20 units currently in field trials.

Leung values the company at 13× FY27 EV/EBITDA and kept his $2.25 target unchanged, noting potential upside if new services scale faster or if Avante pursues acquisitions supported by its balance sheet and available credit.

He said Avante should generate $2.0-million in Adjusted EBITDA on $36.5-million in revenue in fiscal 2026, improving to $4.1-million on $42.8-million in fiscal 2027.

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