Coda Octopus Group (CODA, Financial), through its UK-based subsidiary Coda Octopus Martech, has announced a significant order from a longstanding customer, a prominent defense contractor in the United Kingdom. This order involves the supply of sub-components for a suite of autonomous mine sweeping systems, underscoring CODA's strategic involvement in European defense initiatives.
Martech, established in 1988, has built a solid reputation as a sub-contractor within the European Prime Defense Contractor network. It holds essential pre-qualifications that enable participation in major defense projects. This recent order highlights Martech's pivotal role as defense spending in Europe accelerates and demands for early deliveries grow. Annmarie Gayle, Chairman and CEO of Coda Octopus, expressed optimism about the increased investment in defense across Europe, noting the removal of contracting barriers to fast-track crucial defense programs.
The company is focused on restoring Martech's business to its pre-pandemic revenue levels, leveraging the surge in European defense expenditures. As defense projects are expedited, Coda Octopus positions itself to capitalize on emerging opportunities in the sector.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 1 analysts, the average target price for Coda Octopus Group Inc (CODA, Financial) is $8.00 with a high estimate of $8.00 and a low estimate of $8.00. The average target implies an upside of 25.98% from the current price of $6.35. More detailed estimate data can be found on the Coda Octopus Group Inc (CODA) Forecast page.
Based on the consensus recommendation from 1 brokerage firms, Coda Octopus Group Inc's (CODA, Financial) average brokerage recommendation is currently 2.0, indicating "Outperform" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for Coda Octopus Group Inc (CODA, Financial) in one year is $7.90, suggesting a upside of 24.41% from the current price of $6.35. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the Coda Octopus Group Inc (CODA) Summary page.
CODA Key Business Developments
Release Date: March 17, 2025
- Total Revenue: $5.2 million, up 16.8% from $4.5 million in Q1 2024.
- Marine Technology Business Revenue: $2.3 million, down 35.8% from Q1 2024.
- Acoustic Sensors and Materials Business Revenue: $1.3 million, newly added in October 2024.
- Marine Engineering Business Revenue: $1.6 million, up 77% from $0.9 million in Q1 2024.
- Gross Profit: $3.4 million, compared to $3.1 million in Q1 2024.
- Consolidated Gross Margin: 65.8%, down from 69.2% in Q1 2024.
- Operating Expenses: $2.8 million, up from $2.5 million in Q1 2024.
- Operating Income: $0.7 million, up 19.2% from $0.6 million in Q1 2024.
- Net Income: $0.91 million, or $0.08 per diluted share, up from $0.6 million, or $0.06 per diluted share in Q1 2024.
- Cash and Cash Equivalents: $22.54 million as of January 31, 2025.
- Acoustic Sensors and Materials Business Contribution: 25.2% of group revenue, with a gross margin of 61.7%.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Coda Octopus Group Inc (CODA, Financial) reported a 16.8% increase in total revenue for the first quarter of 2025, reaching $5.2 million compared to $4.5 million in the same period of 2024.
- The newly acquired Acoustic Sensors and Materials business contributed significantly, accounting for 25.2% of the consolidated revenue and 33.3% of the operating income.
- The Marine Engineering business saw a substantial revenue increase of 77% in the first quarter.
- The company achieved a pivotal milestone with the DAVD Untethered System, receiving its first order for $800,000 for 16 systems, indicating strong potential for future growth.
- Coda Octopus Group Inc (CODA) maintains a strong financial position with $22.54 million in cash and no debt as of January 31, 2025.
Negative Points
- The Marine Technology Business experienced a 35.8% decrease in revenue, attributed to weak demand due to global policy uncertainties.
- The company's gross margin decreased to 65.8% from 69.2% in the first quarter of the previous year.
- Operating expenses increased to $2.8 million, largely due to the addition of the new business unit, impacting overall profitability.
- The uncertain global policy environment, including changes in US administration policies, has led to reduced momentum in several Defense Programs.
- The company anticipates a softer second quarter due to customers holding off on purchases amid policy uncertainties, potentially impacting short-term revenue.
