AIR Global stock is a buy, this analyst says

Roth Capital Partners analyst Nick Anderson initiated coverage of AIR Global (AIR Global Stock Quote, Chart, News, Analysts, Financials NASDAQ:AIIR) with a “Buy” rating and US$11.50 target, citing the resilience of its core shisha business and growth opportunities in nicotine pouches and vaping products.

In an Oct. 21 initiation report, the analyst said AIR’s established Al Fakher shisha brand generates strong cash flow that can support expansion into alternative nicotine products without relying on a recovery in declining cigarette volumes.

“A legacy business to lean on, not escape,” Anderson said, contrasting AIR’s position with traditional tobacco companies seeking to offset declining cigarette sales…

AIR generated revenue of US$399.7-million and Adjusted EBITDA of US$139.3-million in 2025.

“A legacy business to lean on, not escape,” Anderson said, contrasting AIR’s position with traditional tobacco companies seeking to offset declining cigarette sales.

AIR’s shisha volumes grew at an annualized rate of 0.4% between 2018 and 2025, compared with a 6% annual decline in U.S. cigarette volumes.

“Shisha has been around for centuries, and is a culturally embedded, social experience shared across generations,” Anderson ADDED. He said AIR’s exposure to the Middle East, Africa and Asia, which accounted for 66% of first-half 2026 shisha sales and 75% of segment Adjusted EBITDA, provides an important source of stability. The company also holds three of the five best-selling shisha flavours globally.

“Demographics are a tailwind few nicotine categories enjoy,” they said.

Anderson pointed to relatively young populations in key Middle Eastern markets, including Saudi Arabia, where the median age is 29 and 63% of the population is under 30. He said shisha consumption is concentrated among younger adults, supporting longer-term demand.

“We believe having outsized market share in the MEAA region will be the primary driver of overall core business resilience and growth going forward,” Anderson said.

In the United States, shisha consumption has also been more stable than other traditional tobacco categories.

“While shisha prevalence in the U.S. is lower than other nicotine SKUs, the decline has been less pronounced and has been one of the more stable nicotine sectors by volume,” Anderson said.

AIR’s first-half 2026 shisha shipments declined 9% amid geopolitical disruptions affecting shipping through the Strait of Hormuz. However, the company offset much of the pressure through pricing and product mix. Anderson said management expects stable shipments for 2026 and low-single-digit organic volume growth in 2027.

He also highlighted AIR’s expansion into nicotine pouches, electronically heated shisha and vaping products. AIR has invested approximately US$125-million in new growth categories since 2019, including a US$20-million investment in Greentank to support development and regulatory approval of vaping technology.

“Given the regulatory momentum and growth opportunities we are seeing around flavoured vapes and nicotine pouch products, we believe AIR will be able to leverage its brand affinity and cash flow profile to compete in both categories over time,” he said.

The analyst estimates the U.S. nicotine pouch manufacturers’ market could reach approximately US$10-billion by 2030, creating a significant opportunity even with a low-single-digit market share.

Anderson thinks AIR could finance much of its expansion through cash generated by its existing business, although building a broad nicotine pouch distribution network could require US$75-million to US$100-million. The company’s new growth categories generated just US$3.1-million in revenue in 2025, alongside an Adjusted EBITDA loss of US$18.9-million.

Anderson forecasts revenue from these businesses reaching US$17.5-million in 2027, while acknowledging that regulatory approvals and adoption could materially change that outlook.

“We see upside to our estimates if AIR can enter nicotine pouches in any meaningful way, and heightened exposure to that category, in our view, would warrant a more premium multiple,” he said. “We have not factored any vape contribution into our estimates, but view potential PMTA approval as a catalyst that could materially move estimates higher.”

AIR recently announced plans for an annual dividend of US$0.28 per share beginning in 2027 and intends to repurchase up to US$100-million of shares by December 2029. Anderson said the capital return program reflects AIR’s cash generation, although investments in new products will remain important.

AIR trades at about 9.9 times estimated 2027 EV/Adjusted EBITDA, below major tobacco and alternative nicotine peers.

Roth’s US$11.50 target is based on 14 times estimated 2027 Adjusted EBITDA, reflecting the stability of the shisha business and potential upside from new products.

Anderson expects AIR to generate Adjusted EBITDA of US$142.4-million on revenue of US$417.3-million in fiscal 2026, improving to Adjusted EBITDA of US$152.0-million on revenue of US$436.6-million in fiscal 2027.

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