Codan Limited (AU:CDA)
ASX:CDA
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Codan Limited
(Sydney:CDA)
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Rating:71Outperform
Price Target:
AU$38.00
▲(11.76% Upside)
Action:ReiteratedDate:02/19/26
The score is driven primarily by strong financial performance and an upbeat earnings update with clear growth guidance and improving order book visibility. This is partly offset by expensive valuation (high P/E, low yield) and only moderate technical momentum (below the 20-day average with slightly negative MACD).
Positive Factors
Strong top-line and profit growth
Sustained double-digit revenue growth and large operating leverage (EBIT +52%, NPAT +55%) indicate durable product demand and scalable cost structure. This underpins multi-period earnings visibility, supports reinvestment in R&D and channels, and strengthens long-term cash generation.
Negative Factors
Rising operating expenses
Elevated operating spend for integration, launches and performance-linked pay can compress margins for multiple quarters. If cost synergies from acquisitions and shared services take longer to realize, profitability expansion may be delayed and cash conversion could be intermittently pressured.
Read all positive and negative factors
Positive Factors
Negative Factors
Strong top-line and profit growth
Sustained double-digit revenue growth and large operating leverage (EBIT +52%, NPAT +55%) indicate durable product demand and scalable cost structure. This underpins multi-period earnings visibility, supports reinvestment in R&D and channels, and strengthens long-term cash generation.
Read all positive factors
Codan Limited (CDA) vs. iShares MSCI Australia ETF (EWA)
Market Cap
AU$6.18B
Dividend Yield0.97%
Average Volume (3M)387.50K
Price to Earnings (P/E)18.2
Beta (1Y)1.43
Revenue Growth22.48%
EPS Growth27.07%
CountryAU
Employees450
SectorTechnology
Sector Strength88
IndustryHardware, Equipment & Parts
Share Statistics
EPS (TTM)0.39
Shares Outstanding181,875,320
10 Day Avg. Volume342,565
30 Day Avg. Volume387,502
Financial Highlights & Ratios
PEG Ratio1.33
Price to Book (P/B)6.99
Price to Sales (P/S)5.43
P/FCF Ratio26.55
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
AU$39.11Price Target Upside15.04% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering7
EPS Forecast (FY)0.84
Revenue Forecast (FY)AU$830.63M
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 segme...
How the Company Makes Money
Codan Limited generates revenue through multiple key streams, including the sale of its communication systems, tracking solutions, and metal detection equipment. The Communications division, which includes tactical radio systems for defense and pu...
Codan Limited Earnings Call Summary
Earnings Call Date:Feb 18, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Aug 20, 2026
Earnings Call Sentiment Positive
The call presented a strong set of H1 results with material top-line and profit growth (revenue +29%, EBIT +52%, NPAT +55%) driven by both Communications and an exceptional Minelab performance (revenue +46%, margin 45%). Product-led momentum, a sizable orderbook (+19% to $294m) and large engineering spend (9% of revenue) underpin confidence and growth visibility. Key near-term challenges include elevated operating expenses, a temporary slowdown in Zetron Americas procurement, a modest rise in net debt and a higher effective tax rate (~25%). Management remains confident on FY '26 guidance (Communications 15–20% growth range; Minelab H2 at least in line with H1) and retains balance sheet flexibility for disciplined M&A. On balance, the highlights materially outweigh the lowlights.Positive Updates
Group Revenue Growth
Group revenue increased 29% to $394 million, driven by strong organic growth and a full first-half contribution from the Kagwerks acquisition.
Negative Updates
Increased Operating Expenses
Operating expenses rose due to targeted investments in shared services, higher performance-linked pay, product launch costs and Kagwerks integration, pressuring short-term expense base.
Read all updates
Q2-2026 Updates
Positive
Negative
Group Revenue Growth
Group revenue increased 29% to $394 million, driven by strong organic growth and a full first-half contribution from the Kagwerks acquisition.
Read all positive updates
Company Guidance
Management guided that Communications is on track for FY‑26 revenue growth of 15–20% (H1 Communications revenue $222m; H1 segment profit $58m; current margin ~26% with a target of 30% by FY‑27) and that Minelab’s H2 revenue is expected to be at least in line with H1 (H1 Minelab revenue $168m, +46% YoY, segment margin 45%); group H1 actuals were revenue $394m (+29%), EBIT +52% and NPAT $71m (+55%), and the Board declared a fully franked interim dividend of $0.195/share (+56%). Management reiterated ongoing investment (engineering spend of $36m in H1, ~9% of revenue), a tax rate around 25%, FX hedges covering ~50% of expected USD H2 exposure, and balance sheet capacity (net debt $88m, up $10m vs June, leverage 0.4x EBITDA, undrawn facility $140m plus $150m accordion) with an order book of $294m (+19% at 31 Dec) and unmanned revenue of $73m (+68%) supporting the outlook.Codan Limited Financial Statement Overview
Summary
Income Statement
85
Very Positive
Balance Sheet
78
Positive
Cash Flow
82
Very Positive
| Breakdown | TTM | Jun 2025 | Jun 2024 | Jun 2023 | Jun 2022 | Jun 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 762.12M | 674.23M | 550.46M | 456.47M | 506.14M | 437.05M |
| Gross Profit | 412.57M | 378.75M | 305.23M | 218.59M | 253.06M | 216.90M |
| EBITDA | 185.43M | 155.64M | 147.10M | 120.64M | 162.65M | 159.32M |
| Net Income | 128.62M | 103.49M | 81.39M | 67.77M | 100.74M | 90.35M |
Balance Sheet | ||||||
| Total Assets | 912.27M | 904.80M | 768.71M | 693.30M | 590.93M | 502.85M |
| Cash, Cash Equivalents and Short-Term Investments | 21.78M | 39.73M | 19.70M | 23.66M | 22.61M | 22.36M |
| Total Debt | 184.06M | 160.74M | 141.05M | 125.39M | 82.24M | 56.12M |
| Total Liabilities | 354.38M | 380.98M | 321.78M | 286.97M | 222.98M | 199.24M |
| Stockholders Equity | 557.89M | 523.83M | 447.39M | 406.70M | 368.28M | 303.72M |
Cash Flow | ||||||
| Free Cash Flow | 49.20M | 138.02M | 55.67M | 30.51M | 17.56M | 108.35M |
| Operating Cash Flow | 53.98M | 146.64M | 106.45M | 79.88M | 51.72M | 131.30M |
| Investing Cash Flow | -30.66M | -98.06M | -87.96M | -53.93M | -19.75M | -182.72M |
| Financing Cash Flow | -40.77M | -28.66M | -22.43M | -25.45M | -32.68M | -19.00M |
Codan Limited Technical Analysis
Positive
34.00
Price Trends
34.91
Negative
33.37
Positive
30.39
Positive
Market Momentum
-0.32
Negative
50.03
Neutral
83.61
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 34 is above the 20-day moving average (MA) of 33.59, below the 50-day MA of 34.91, and above the 200-day MA of 30.39, indicating a neutral trend. The MACD of -0.32 indicates Negative momentum. The RSI at 50.03 is Neutral, neither overbought nor oversold. The STOCH value of 83.61 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
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
73 Outperform | AU$1.49B | 52.40 | ― | ― | 191.25% | 19.43% | |
71 Outperform | AU$6.18B | 18.16 | 23.78% | 0.97% | 22.48% | 27.07% | |
67 Neutral | AU$258.19M | 13.92 | 17.50% | 2.31% | -1.09% | 14.88% | |
62 Neutral | AU$1.72B | 26.24 | 5.01% | ― | 1.75% | 0.42% | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% | |
50 Neutral | AU$16.42M | 0.92 | 26.81% | ― | -21.60% | -657.00% | |
45 Neutral | AU$31.50M | -17.78 | -64.64% | 4.99% | -38.38% | -275.50% |
* Technology Sector Average
AU:CDA
Codan Limited
34.00
19.46
133.87%
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Codan Limited Corporate Events
Codan Sets Date for H1 FY26 Results and Investor Webinar
Feb 5, 2026
Codan Limited has announced that it will release its financial results for the half year ended 31 December 2025 on Thursday, 19 February 2026. The company will host a same-day investor webinar led by CEO and Managing Director Alf Ianniello and CFO...
Codan Flags Strong FY26 First-Half on Metal Detection and Communications Growth
Jan 8, 2026
Codan Limited has flagged a strong first half for FY26, guiding to preliminary group revenue of about $394 million, up 29% year on year, and underlying net profit after tax of at least $70 million, a 52% increase, driven by standout performance in...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
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.