Avant Brands AVTBF Stock Forecast & Analysis

Avant Brands AVTBF stock is one of those cannabis stocks I have always thought will do very well.  Unfortunately, as far as cannabis investments go, AVTBF stock has underperformed over the past year dropping from its high of ~$0.87 to below $0.20 right now.  For those that may have acquired this stock near the top this would be painful.  But, there are many things aligning for Avant Brands that I think will drive the company forward this year.  This will be a year to target AVTBF stock forecast when they hit EBITDA profitability.

First, and finally, the 3PL facility has been licensed and now Avant Brands will be able to push forward with its productions.  Avant Brands is a company that once they get all of production pieced together will be able to increase revenues significantly.  Avant Brands has operates in the premium branding for Canadian cannabis.  Because of that, I have always thought this was a company that would perform well since they started out on the smaller side and focused on higher quality.

A lot of other Canadian companies thought they could build enormous facilities and produce an endless amount of cannabis and it would be all about getting product to market where there would be lines at the door.  That did not materialize and these bigger companies have reeled from this.

With its premium approach, and now more production capacity, look for the high demand to be met with increasing revenue and improving margins.

Avant Brands Record Revenue

Avant Brands has recently opened its new facility and this facility is provided badly needed expansion capabilities.  Avant Brands is starting to see the results of this expansion play out in its financials as AVTBF stock sees its highest all-time revenue.  From there, this is the springboard for improving metrics.  I have pegged Avant Brands to print $15M in revenue for this quarter.  And, with AVTBF stock at its all time lows, this will enable AVTBF stock to advance.

Look for continued increases in AVTBF stock as the company ramps up its production from the new facility. If Avant Brands can also improve metrics and get to break-even EBITDA levels on a consistent basis as well as scale up the company’s margins from there this will improve the chances of AVTBF stock heading higher.

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Avant Brands Financial Data

Here is a breakdown of Avant Brands Q4 financial data.

Avant Brands Gross Profits

  • Avant Brands Revenue

Now that 3PL is licensed, Avant Brands will be able to get its products out to dispensaries more consistently and also expand into new areas.  Likely, you can look for revenue to double in some period of time, perhaps 12-18 months total.  This is far faster than most other cannabis stocks, but the premium branding that Avant Brands has will merit this kind of move.

As Avant Brands grows into the new 3PL facility, margins will improve significantly with economies of scale.  For now, owed to one-off costs associated with rebranding & graduating to a loftier exchange on the OTC, costs incurred will decrease moving forward.

It may be that Avant Brands is able to hit its stride early and start printing margins at competitive levels.  But, this is difficult to determine at this point because of the new facility opening and not knowing what the potential is.

Avant Brands Operating Profits

  • Avant Brands Operating Costs

There were increases in operating costs the past quarter and, again, owing to the new facility and other outlying costs, this is outsized at this point.  But, with the new facility ramping up and future sales hitting in the next 3-6 months, operating costs relative to revenue will improve significantly.

This is another metric I will closely watch over the coming quarters and, this is likely to be a key aspect for someone savvy at investing in cannabis stocks.

Avant Brands EBITDA & Net Profits

  • Avant Brands EBITDA

We are in a new epoch for Avant Brands that being post 3PL licensing.  So, you are now investing in this company looking forward to the future from this point.

Along with the increasing revenues, look for margins to improve quickly with gross margins likely to hit above 50% and operating efficiencies also hitting below 50%.  I expect these metrics will hit quickly.  Then, through scaling up and economies of scale, EBITDA profitability will likely be achieved before the end of 2022 with net earnings positive hitting in 2023.

Avant Brands Cash On Hand

  • Avant Brands Cash On Hand

Recent cash raises and allotments with debt financing place Avant Brands as one of the best cannabis stocks there is with some 533% cash:debt ratio.  This ensures that Avant Brands will be very well positioned for the future and grow accordingly.  Having significant cash on hand will always serve those best in the future.  Cash is king.

Avant Brands Total Equity

  • Avant Brands Total Assets

As well as cash financing, total equity moved upward significantly over the previous few quarters.  Assets are what it takes to grow revenue.  If you are trying to see if management is focused on growing shareholder value, total equity would be one of the best places to look.

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Avant Brands AVTBF Stock Forecast

As always, I will wait until I do a Discounted Cash Flow Statement once Avant Brands AVTBF stock hit EBITDA profitability.  I believe this is likely to happen very soon as production ramps up and economies of scale are achieved.

Is Avant Brands AVTBF Stock A Good Investment?

Avant Brands AVTBF Stock Chart 8Aug22

There are ~200M shares outstanding of AVTBF stock.  Revenues should double for Avant Brands and likely achieve about $20M annually.  If, on a moderate basis, Avant Brands were to hit approximately 7.5% net earnings from this and do so within the next 6-9-12-18 months, that would mean approximately $0.015 EPS.  And at ~50x multiple that would put this stock at about $0.375.  This is about double where AVTBF stock is trading right now.  But, as far as cannabis investments go, this is one of the cannabis stocks that may push far further than this.

Plus, Avant Brands will very likely create other strategic investments along the way.  Should they also be able to see demand outstrip their future production capabilities, AVTBF stock is one of the cannabis stocks that you are likely to see the potential to go far higher.

This should be an interesting year for cannabis stocks and AVTBF stock also.  At the current price, the upside potential far outweighs the downside risks.

Avant Brands Financial Data

Avant Brands AVTBF Stock Financial Statements

2 thoughts on “Avant Brands AVTBF Stock Forecast & Analysis

    1. @sjs94704 

      Thanks for reaching out to me SJS… Personally, I really like Avant Brands.  But, I get that you are not exactly thrilled to death with your entry point.  Maybe consider averaging down; a bold move. But, it has a lot of merit.

      First, you bought after the big surge.  Guess what?  There is another one on the way.  The US is getting ready to go through the process of cannabis federal legalization.  Once the Senate version hits the committee, which we expect to occur in the next couple of months, this will really electrify the sector.  They will pass that version.  That is when cannabis stocks are going to get seriously interesting.  After that, both chambers will get together in a conference and hash out what needs to be in the new version of the bill.  That gets a revote and then it is off to Biden’s desk.  Voila… cannabis will have some form of federal legalization.  

      But, that is not the real thing we are looking for.

      After that, companies will be able to lawfully bank here in the states.  And, they will be able to up-list to the Nasdaq.  That is when real money starts to trickle into the sector and is more supportive of these stocks.  That is when real money will start sifting through these stocks looking for cannabis companies that are real players.  

      As I said, I like Avant Brands AVTBF stock.  They are focused only on premium branding.  They always run out of product because demand is so high. And, they just got licensed for occupancy in their new facility.  They will then be able to more than double their sales with more than double grow capacity.  Avant Brands will be able to scale up and grow nicely.  And, more than likely some big player is going to acquire them.  

      You would do well to hold on to this stock.  You could also average down and add some in now getting ready for a real solid move higher in these stocks.  This is a company that will be profitable in the long run.  But, from a popularity perspective, cannabis stocks are not exactly crushing it. And, AVTBF stock is showing that.  

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