Is Avante stock still a buy?

Beacon Securities analyst Gabriel Leung says Avante’s (Avante Stock Quote, Chart, News, Analysts, Financials TSX:XX) partnership with Target Park could become a meaningful recurring revenue opportunity and help validate the company’s MAST platform beyond traditional security.

In a June 29 update, Leung maintained his “Buy” rating and $2.25 target on Avante.

Toronto-based Avante provides high-end security systems and services for residential and commercial customers, largely in the Greater Toronto Area.

Avante announced a partnership with Target Park, a commercial parking operator, to deploy its MAST units across above-ground parking lots in Canada and the U.S. Leung said he believes it is Avante’s first MAST enterprise agreement.

MAST will serve as the primary security layer across Target Park locations, with a roadmap that could eventually include automated parking services, vehicle identification, real-time lot monitoring and streamlined customer access.

Target Park has more than 700 parking locations across Canada and the U.S., with about 60% above ground, according to management.

“Using a monthly fee of ~$2,500, we estimate this agreement could represent a ~$12.6M ARR opportunity to Avante on a fully deployed basis,” Leung said.

Leung said Target Park is expected to begin with a small number of units for testing before expanding over time. He said the likely deployment bottleneck will be Avante’s ability to produce enough MAST units. The company currently has about 30 units in the field.

Avante has about $5-million in cash and $12-million in available credit facilities to support MAST capital spending.

Leung said the company has a strong MAST pipeline and any additional agreements could be positive for valuation and estimates, noting that his current forecasts include little contribution from MAST.

“We view new MAST enterprise agreements as one of the key valuation catalysts for the stock, along with acquisitions and an acceleration in its international business,” Leung said.

Leung left his estimates unchanged pending more data on the contract. He expects Avante to generate Adjusted EBITDA of $2.5-million on revenue of $36.3-million in fiscal 2026, improving to Adjusted EBITDA of $3.5-million on revenue of $41.3-million in fiscal 2027.

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