Kaival Brands Innovations Group, Inc. (NASDAQ: KAVL, $KAVL) is a stock to watch. Better yet, consider investing. Why? Several reasons stand out…and each show why $KAVL stock is appreciably undervalued.
Foremost is a recent court order that significantly enhances $KAVL’s competitive position. In a ruling, a Judicial Stay of Bidi Vapor’s Marketing Denial Order (“MDO”) was granted on February 1, 2022. The court-ordered stay means that the MDO, which covered the non-tobacco flavored BIDI® Sticks, is not legally in force. Accordingly, Kaival Brands anticipates being able to continue marketing and selling all eleven BIDI® Stick products, subject to the U.S. Food and Drug Administration’s (“FDA”) enforcement discretion, while Bidi Vapor continues with its merits case challenging the legality of the MDO. FDA has indicated that it is prioritizing enforcement against companies that have either not submitted PMTAs, or whose PMTAs have been refused acceptance or filing by FDA, or whose PMTAs remain subject to MDOs.
So, for now, that takes care of the U.S markets. Keep in mind those pressures don’t exist in most international markets. That’s should be another point of investor interest after $KAVL made clear its intent to pursue international distribution and expects to provide an update in the second quarter of 2022. That signals news could come within days. Those that watched the Kaival spike on its judicial stay news know that when $KAVL talks, good things can happen. News on the international marketing front could be substantial.
Indeed, Kaival management is bullish on 2022. Commenting on the judicial stay of Bidi Vapor’s MDO, Niraj Patel, Chief Executive Officer and Found of Kaival Brands and Bidi Vapor stated, “This is a significant event not only for Kaival Brands and Bidi Vapor, but the entire industry. The judicial stay granted in February allows us to resume sale of all eleven products in the BIDI® Stick lineup. We are excited to return our flavored products to the shelves of PACT-act compliant retailers so our adult consumers can enjoy their preferred flavors once again. As a result of the judicial stay, we expect revenues to continue to resume an upward trajectory as renewed distribution ramps up and sales of flavored BIDI® Sticks increase.”
Further, they expect renewed revenues from sales of flavors and also applaud recent bi-partisan effort by Congress to give FDA authority over synthetic nicotine. Mr. Patel said, “Products in the vaping space should be developed and placed in the market under a high degree of supervision, such as the FDA’s Premarket Tobacco Application process or the FDA’s drug-approval process. We anticipate that as the FDA begins enforcement against illegally-marketed and synthetic-nicotine vaping products, there may be an increased demand for compliant and legal vaping products, such as the BIDI® Stick.”
In other words, $KAVL looks to be ideally positioned to earn a significant market share of a multi-billion dollar revenue-generating opportunity. If that’s the case, at roughly $1.61 a share, valuations are appreciably undervaluing its potential. That makes $KAVL, especially ahead of news expected this month, a timely and more than actionable consideration.