Kaival Brands Innovations Group Inc (NASDAQ:KAVL) a pioneer in the electronic cigarette industry worldwide, markets and distributes a number of innovative technology solutions and products. The electronic nicotine delivery system or “ENDS” from BIDI Vapor, the BIDI® Stick in the US markets and VEEBA, virtually a duplicate of BIDI® Stick, distributed internationally through a strategic alliance with Philip Morris (NYSE:PM) are expected to dominate the e-cigarette market worldwide in the future.
On June 28th, Harbinger Research LLC published a new research report on Kaival Brands Innovations. The firm initiated coverage on the stock with a " Strong Buy" rating.
Nirajkumar Patel, Chief Science and Regulatory Officer of Kaival Brands, says, “VEEBA and BIDI® Stick are science-based, premium, responsible, recyclable and disposable devices, developed specifically for use by adult smokers and existing adult nicotine users who are looking for a better alternative to continued smoking."
The report from Harbinger provides a deep-level valuation analysis and also provided a price target. It could be a good idea for investors to consider taking a look at some of the highlights from the research report. First of all, the report classified the Kaival Brands Innovations Group stock as a 'Strong Buy' and the rationale was provided in the report. The analysts believe that it is likely that there is going to be a likely and strong acceleration in growth in the company's business in the coming 12-month period.
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The report says " After having had $100 million in sales in CY2020, the Company hit hard times in 2021 and 2022, due to a rapid influx of illegal and inexpensive foreign imports, the COVID-19 pandemic and its lockdowns, and a rapidly deteriorating U.S. regulatory environment for flavored electronic nicotine delivery systems, known as ENDS."
The company had experienced significant success in its initial foray into the ENDS sector but eventually, the regulator climate changed dramatically and many companies could no longer stay in the business. Kaival Brands managed to survive that trying period and is now in a position from which it could grow strongly over the next couple of calendar quarters.
The report further noted that although the uncertainties about competition and regulatory issues remain, Kaival Brands' approach to the business could make it a strong player. The company has decided to focus on distributing through some of the biggest retailers and some of those operate tens of thousands of stores in the United States. Harbinger analysts believe that this approach could eventually establish Kaival Brands as one of the bigger players in the ENDS market in the United States.
It was also pointed out in the report that not too long ago the company had managed to acquire 12 patents and 46 pending patents through an equity deal with the privately owned company GoFire. Harbinger believes that the move would drive innovation at Kaival Brands Innovations Group.
The patents encompass not only ENDS devices but also devices for cannabis and hemp. The company noted that the intellectual property portfolio could also help in striking licensing deals. The regulators have also cracked down heavily on illicit sales of ENDS and that could prove to be another blessing for the company in the long run.
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