Coda Octopus Group (CODA) AI Stock Analysis

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Coda Octopus Group

(NASDAQ:CODA)

71Outperform

Coda Octopus Group shows strong financial performance with solid profitability and cash flow management, but challenges in revenue stability and asset management persist. Technical analysis indicates mixed signals with potential bearish momentum. The valuation appears fair, and the positive outlook from the earnings call reflects strategic growth potential despite sector challenges.

Coda Octopus Group (CODA) vs. S&P 500 (SPY)

Market Cap

$70.41M

Dividend YieldN/A

Average Volume (3M)25.90K

Price to Earnings (P/E)18.0

Beta (1Y)0.46

Revenue Growth15.63%

EPS Growth64.98%

CountryUS

Employees103

SectorIndustrials

Sector Strength66

IndustryAerospace & Defense

Share Statistics

EPS (TTM)0.35

Shares Outstanding11,230,248

10 Day Avg. Volume40,892

30 Day Avg. Volume25,897

Financial Highlights & Ratios

PEG Ratio0.28

Price to Book (P/B)N/A

Price to Sales (P/S)3.57

Price to Cash Flow (P/CF)29.30

P/FCF Ratio29.30

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$8.00

Price Target Upside27.59% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering1

Coda Octopus Group Business Overview & Revenue Model

Company DescriptionCoda Octopus Group, Inc., together with its subsidiaries, develops and sells underwater technologies and equipment for 3D imaging, mapping, defense, and survey applications in the Americas, Europe, Australia, Asia, the Middle East, and Africa. The company operates through two segments, Marine Engineering Business and Marine Technology Business. It sells technology solutions to the subsea and underwater markets. The company's solutions include geophysical systems, a geophysical data acquisition systems, processing, and analysis software that are used primarily by survey companies, offshore renewable companies, research institutions, and salvage companies; GNSS-aided navigation systems; Echoscope and Echoscope PIPE used for real time monitoring of cable installations for offshore wind projects; and diver augmented vision display system. It offers CodaOctopus GeoSurvey products, such as hardware and software solutions for field acquisition of sidescan sonar and sub-bottom profiler; and CodaOctopus DA4G productivity suite of software that automates the tasks of analyzing, annotating, and mosaicing complex data sets. It markets its products under the CodaOctopus brand name. Coda Octopus Group, Inc. was founded in 1994 and is headquartered in Orlando, Florida.

How the Company Makes MoneyCoda Octopus Group makes money through the sale of its proprietary 3D sonar technology and underwater solutions primarily to the marine, oil and gas, and defense industries. The company's key revenue streams include product sales, engineering services, and software licenses. Additionally, CODA benefits from strategic partnerships with defense contractors and maritime companies, which help expand its market reach and drive sales. The company also engages in research and development to continually innovate and expand its product offerings, ensuring a steady demand for its cutting-edge technology solutions.

Coda Octopus Group Financial Statement Overview

Summary

Coda Octopus Group demonstrates strong profitability with high margins and excellent cash flow management, showing efficient cost controls. However, instability in the balance sheet and recent revenue fluctuations raise concerns about asset stability and consistent growth.

Income Statement

Positive

Coda Octopus Group shows a strong gross profit margin of 67.98% and a healthy net profit margin of 18.65% in TTM, indicating efficient cost management and profitability. Revenue growth is modest at 3.68% compared to the prior period, but the company maintains a robust EBIT margin of 17.52% and an EBITDA margin of 20.49%, reflecting operational efficiency. However, the revenue decline from 2022 to 2023 poses a concern for consistent growth.

Balance Sheet

Positive

The balance sheet demonstrates zero debt, leading to a favorable debt-to-equity ratio of 0, which reduces financial risk. However, the TTM data indicates some instability with total assets and stockholders' equity reduced to minimal values, possibly due to incomplete or inaccurately reported data. The previous year's equity ratio of 92.34% highlights strong equity capitalization, yet the current asset base reduction raises concerns about asset management.

Cash Flow

Very Positive

Coda Octopus Group exhibits solid cash flow management with a free cash flow growth of 670.42% in the TTM period. The operating cash flow to net income ratio of 0.86 and a free cash flow to net income ratio of 0.72 indicate efficient conversion of income into cash, enhancing liquidity. Stability in cash generation supports the company's operational and investment activities, although caution is needed in maintaining such high growth levels.

TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
21.06M	20.32M	19.35M	22.23M	21.33M	20.04M
	Gross Profit
14.32M	14.17M	13.03M	15.19M	14.77M	12.73M
	EBIT
3.69M	3.58M	2.74M	5.00M	5.31M	2.80M
	EBITDA
4.32M	4.44M	4.09M	5.74M	6.23M	4.27M
	Net Income Common Stockholders
3.93M	3.65M	3.12M	4.30M	4.95M	3.34M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
221.16K	22.48M	24.45M	22.93M	17.75M	15.13M
	Total Assets
12.33M	57.54M	51.84M	46.93M	45.47M	38.04M
	Total Debt
13.61M	413.17K	0.00	0.00	63.56K	573.11K
	Net Debt
13.42M	-2.45M	-24.45M	-22.93M	-17.68M	-14.56M
	Total Liabilities
21.91M	4.42M	3.41M	3.54M	4.42M	3.64M
	Stockholders Equity
-9.57M	53.13M	48.43M	43.38M	41.05M	34.40M
Cash Flow		Free Cash Flow
2.83M	367.93K	259.54K	6.17M	2.31M	3.44M
	Operating Cash Flow
3.39M	2.45M	2.39M	6.73M	3.27M	4.43M
	Investing Cash Flow
-5.17M	-4.42M	-1.52M	-556.56K	-964.20K	-998.34K
	Financing Cash Flow
-2.33K	-17.96K	-17.96K	-91.90K	139.32K	162.41K

Coda Octopus Group Technical Analysis

Technical Analysis Sentiment

Negative

Last Price6.27

Price Trends

50DMA

6.87

Negative

100DMA

7.65

Negative

200DMA

7.60

Negative

Market Momentum

MACD

-0.13

Negative

RSI

44.67

Neutral

STOCH

59.21

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CODA, the sentiment is Negative. The current price of 6.27 is above the 20-day moving average (MA) of 6.22, below the 50-day MA of 6.87, and below the 200-day MA of 7.60, indicating a neutral trend. The MACD of -0.13 indicates Negative momentum. The RSI at 44.67 is Neutral, neither overbought nor oversold. The STOCH value of 59.21 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for CODA.

Coda Octopus Group Peers Comparison

Overall Rating

UnderperformOutperform

Sector (62)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
ISSC	77 Outperform	$106.85M	15.95	15.23%	―	43.24%	4.37%
CODA	71 Outperform	$70.41M	18.02	7.61%	―	15.63%	64.98%
OPXS	68 Neutral	$39.38M	9.39	23.81%	―	23.22%	39.83%
Sector *	62 Neutral	$4.17B	11.26	5.46%	215.76%	4.12%	-8.54%
VTSI	57 Neutral	$42.45M	29.87	3.09%	―	-30.73%	-83.53%
CVU	50 Neutral	$44.31M	13.11	13.74%	―	-6.23%	-80.67%
SPCE	41 Neutral	$101.18M	―	-83.78%	―	3.47%	53.31%

* Industrials Sector Average

Performance Comparison

CODA

Coda Octopus Group

6.27

0.27

4.50%

CVU

CPI Aerostructures

3.25

0.53

19.49%

ISSC

Innovative Solutions And Support

5.92

-0.46

-7.21%

SPCE

Virgin Galactic Holdings

2.47

-12.57

-83.58%

OPXS

Optex Systems Holdings

5.76

-1.15

-16.64%

VTSI

VirTra

3.69

-8.53

-69.80%

Coda Octopus Group Earnings Call Summary

Earnings Call Date: Mar 17, 2025 | % Change Since: -5.29% | Next Earnings Date: Jun 11, 2025

Earnings Call Sentiment Neutral

The earnings call highlighted significant revenue growth and strategic advancements, particularly in engineering and new business acquisitions. However, it also pointed out challenges in the Marine Technology sector due to global policy uncertainties and reduced defense spending. Overall, the positives appear to balance the negatives, with strategic initiatives showing promise for future growth.

Highlights

Significant Revenue Growth

Total revenue for the first quarter of 2025 increased by 16.8% to $5.2 million compared to $4.5 million in the first quarter of 2024.

Strong Performance of Engineering Business

The Engineering business revenue increased by 77% in the first quarter of 2025.

Contribution of Precision Acoustics Limited

The newly acquired business unit, Precision Acoustics Limited, contributed 25.2% to consolidated revenue and 33.3% to operating income.

DAVD Technology Developments

Received first order for approximately $800,000 for 16 DUS systems under the DAVD program, indicating strong progress and potential for future adoption.

Healthy Financial Position

As of January 31, 2025, the company had $22.54 million in cash and cash equivalents with no debt.

Lowlights

Decline in Marine Technology Business Revenue

Revenue from the Marine Technology business decreased by 35.8% from $3.5 million to $2.3 million due to weak demand and global policy uncertainties.

Impact of Global Policy Environment

Significant headwinds due to uncertainty around U.S. administration policies, including tariffs and changes in energy and defense spending, affecting demand.

Reduced Defense Spending by U.S.

The new U.S. administration's policy to reduce defense spending by 8% over several years poses potential challenges.

Challenges in Offshore Renewables

Suspension of offshore renewable permits by the U.S. administration led to a decrease in demand for solutions in the Marine Technology business.

Increase in Operating Expenses

Total operating expenses increased to $2.8 million from $2.5 million, largely due to the addition of the new business unit.

Company Guidance

During Coda Octopus Group's first quarter fiscal 2025 earnings call, the company announced a 16.8% increase in total revenue, reaching $5.2 million, compared to $4.5 million in the same period of 2024. The Marine Technology business faced a 35.8% revenue decrease, while the Engineering business saw a 77% increase. The newly acquired Acoustic Sensors & Materials business contributed 25.2% to consolidated revenue and 33.3% to operating income. Gross profit rose to $3.4 million with a margin of 65.8%, slightly down from 69.2% the previous year. Operating expenses increased to $2.8 million. Operating income improved by 19.2% to $0.7 million, and net income grew to $0.91 million, or $0.08 per diluted share. The cash position was strong at $22.54 million with no debt. A major highlight was the $800,000 order for 16 untethered DAVD systems, signaling potential growth in defense applications, despite global policy uncertainties impacting some business sectors.

Coda Octopus Group Corporate Events

Business Operations and Strategy

Coda Octopus Updates Corporate Strategy Presentation

Neutral

Nov 15, 2024

Coda Octopus Group, Inc. has updated its corporate presentation, sharing key insights that could impact investor decisions. The revised presentation, available on their website, is part of a broader effort to inform stakeholders about the company’s strategic direction and operational highlights. This update is crucial for those tracking the company’s performance and future prospects in the financial markets.

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.