Codan Limited (CDA) AI Stock Analysis

• Market Cap: $5.62B
• Dividend Yield: 0.79%
• Average Volume (3M): 449.32K
• Price to Earnings (P/E): 52.3
• Beta (1Y): 1.01
• Revenue Growth: 22.48%
• EPS Growth: 27.07%
• Country: AU
• Employees: 450
• Sector: Technology
• Sector Strength: 85
• Industry: Hardware, Equipment & Parts
• EPS (TTM): 0.32
• Shares Outstanding: 181,864,260
• 10 Day Avg. Volume: 618,906
• 30 Day Avg. Volume: 449,320
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 0.67
• Enterprise Value/Revenue: 6.42
• Enterprise Value/Gross Profit: 11.43
• Enterprise Value/Ebitda: 28.06
• 1Y Price Target: $27.81
• Price Target Upside: -9.93% Downside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 7

• Rating: 74 Outperform
• Price Target: AU$23.00 ▼(-25.52% Downside)

Codan Limited shows strong financial performance with robust revenue growth and profitability. The technical indicators point to a positive price trend but suggest caution due to overbought signals. The valuation is a concern with a high P/E ratio, suggesting the stock may be overvalued. These factors combine to form a balanced view of the stock's overall potential.

Positive Factors

Financial Performance

The result for the six months was better than expected at the EBIT line, with significant sales growth.

Market Demand

The order book increased substantially, reflecting strong demand and successful integrations of recent acquisitions.

Product Development

The company has demonstrated expertise in stimulating its markets with ongoing product releases and successful acquisitions.

Negative Factors

Geopolitical Risks

Tactical Communications is supported by a favourable military spending environment and general industry tailwinds.

Market Competition

Metal Detection is benefiting from market share gains supported by expansion of distribution points and continued product development.

Operational Challenges

Margins improved significantly with expectations for further increases due to operational leverage.

Codan Limited Business Overview & Revenue Model

Company Description

Codan Limited develops technology solutions for United Nations organizations, mining companies, security and military groups, government departments, individuals, and small-scale miners. It operates through Communications and Metal Detection segments. The Communications segment designs, develops, manufactures, and markets communication equipment that consists of MIMO MESH; DTC radio solutions for the wireless transmission of video and other data applications; and Zetron communications solutions. The Metal Detection segment designs, develops, manufactures, and markets metal detection equipment, such as handheld metal detecting technologies for recreational, gold mining, demining, and military markets. The company sells its products through a network of dealers, distributors, and agents in Australia, Canada, Denmark, the United Kingdom, the United States, Brazil, India, Ireland, Mexico, Singapore, the United Arab Emirates, and internationally. Codan Limited was incorporated in 1959 and is headquartered in Mawson Lakes, Australia.

How the Company Makes Money

Codan Limited generates revenue primarily through the sale of its diverse range of electronic products and services. The company's key revenue streams are derived from its three main segments. In the Communications segment, Codan provides radio communication systems for critical communications, which are used by government, military, and commercial entities worldwide. The Metal Detection segment is a significant contributor to revenue, offering products for recreational, security, and humanitarian demining applications. The Tracking Solutions segment offers technology for mining productivity and safety, leveraging partnerships with mining companies to enhance operational efficiency. Codan's ability to innovate and adapt its technologies to meet the needs of various industries is a substantial factor in its earnings, alongside strategic acquisitions and partnerships that expand its market reach and product offerings.

Codan Limited Financial Statement Overview

Summary

Codan Limited exhibits strong financial health with consistent revenue growth and robust profitability margins. The balance sheet shows controlled leverage and solid equity positions, while cash flow performance highlights efficient cash management and conversion.

Income Statement

Codan Limited demonstrated strong revenue growth, increasing by 20.59% from the previous year. The Gross Profit Margin stands at 55.45% and the Net Profit Margin is at 14.78%, indicating good profitability. EBIT and EBITDA margins were also healthy at 17.42% and 26.73%, respectively, suggesting efficient operations.

Balance Sheet

The company's Debt-to-Equity Ratio increased to 0.32, which remains reasonable but indicates rising leverage. Return on Equity (ROE) was strong at 18.19%, reflecting effective use of equity capital. The Equity Ratio of 58.21% suggests a solid equity base supporting its asset structure.

Cash Flow

Codan Limited's Free Cash Flow grew by 82.43%, showcasing robust cash generation. The Operating Cash Flow to Net Income Ratio was 1.31, reflecting good cash earnings quality. The Free Cash Flow to Net Income Ratio was high at 0.68, indicating effective conversion of earnings into cash flow.

Breakdown	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	550.46M	456.47M	506.14M	437.05M	348.02M
Gross Profit	305.23M	218.59M	253.06M	216.90M	170.62M
EBITDA	147.10M	120.64M	162.65M	159.32M	118.29M
Net Income	81.39M	67.77M	100.74M	90.35M	63.80M
Balance Sheet
Total Assets	768.71M	693.30M	590.93M	502.85M	351.57M
Cash, Cash Equivalents and Short-Term Investments	19.70M	23.66M	22.61M	22.36M	92.83M
Total Debt	141.05M	125.39M	82.24M	56.12M	30.55M
Total Liabilities	321.78M	286.97M	222.98M	199.24M	104.22M
Stockholders Equity	447.39M	406.70M	368.28M	303.72M	247.30M
Cash Flow
Free Cash Flow	55.67M	30.51M	17.56M	108.35M	80.99M
Operating Cash Flow	106.45M	79.88M	51.72M	131.30M	103.98M
Investing Cash Flow	-87.96M	-53.93M	-19.75M	-182.72M	-19.01M
Financing Cash Flow	-22.43M	-25.45M	-32.68M	-19.00M	-29.98M

Codan Limited Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 30.88
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AU:CDA, the sentiment is Positive. The current price of 30.88 is above the 20-day moving average (MA) of 25.58, above the 50-day MA of 22.18, and above the 200-day MA of 17.66, indicating a bullish trend. The MACD of 2.44 indicates Negative momentum. The RSI at 84.25 is Negative, neither overbought nor oversold. The STOCH value of 91.02 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for AU:CDA.

Codan Limited Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
CDA	74 Outperform	$5.62B	52.27	20.83%	0.79%	22.48%	27.07%
Sector *	61 Neutral	$35.48B	7.63	-10.11%	1.88%	8.73%	-9.23%
DRSHF	―	$1.89B	406.79	2.19%	―	―	―
D0D	―	€923.19M	18.69	33.65%	―	―	―
XRF	77 Outperform	AU$318.82M	30.09	18.05%	1.74%	-1.09%	14.88%
OCL	74 Outperform	AU$2.00B	55.02	35.71%	0.86%	5.11%	12.91%
ZMM	39 Underperform	AU$5.88M	―	-174.80%	―	-50.78%	45.67%

Codan Limited Corporate Events

Codan Limited Issues New Performance Rights to Employees

Codan Limited has announced the issuance of 208,717 performance rights under its employee incentive scheme, which are not quoted on the ASX due to transfer restrictions. This move is likely aimed at motivating and retaining talent within the company, potentially enhancing its operational efficiency and market competitiveness.

The most recent analyst rating on (AU:CDA) stock is a Buy with a A$18.43 price target. To see the full list of analyst forecasts on Codan Limited stock, see the AU:CDA Stock Forecast page.

Codan Limited Issues Performance Rights to Employees

Codan Limited announced the issuance of 204,706 performance rights under an employee incentive scheme. These securities are unquoted and subject to transfer restrictions, reflecting the company’s strategy to incentivize and retain talent, potentially impacting its operational efficiency and market competitiveness.

The most recent analyst rating on (AU:CDA) stock is a Buy with a A$15.34 price target. To see the full list of analyst forecasts on Codan Limited stock, see the AU:CDA Stock Forecast page.