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Coda Octopus Group Inc (CODA)
NASDAQ:CODA
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Coda Octopus Group (CODA) AI Stock Analysis

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CODA

Coda Octopus Group

(NASDAQ:CODA)

Rating:72Outperform
Price Target:
Coda Octopus Group's overall stock score reflects its strong financial performance, particularly in cash flow and profitability, despite challenges in revenue consistency and balance sheet stability. The technical analysis suggests potential short-term stability, while the earnings call reveals promising strategic initiatives. Valuation remains moderate, offering a reasonable entry point for investors considering the company's growth prospects.

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

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 Earnings Call Summary

Earnings Call Date:Jun 16, 2025
(Q2-2025)
|
% Change Since: |
Next Earnings Date:Sep 15, 2025
Earnings Call Sentiment Neutral
The earnings call showcased strong revenue growth and significant contributions from new business segments like Precision Acoustics. However, the call also highlighted challenges such as decreased gross profit margins and increased operating expenses. While the launch of the NanoGen series presents a promising opportunity, the underutilization of rental assets and decreased operating income are concerning.
Q2-2025 Updates
Positive Updates
Significant Revenue Growth
Revenue increased by 31.8% in the second quarter of 2025 compared to the same period in 2024, reaching $7 million.
Marine Technology Business Performance
Marine Technology business revenue increased by 10% in Q2 2025. Hardware sales increased by 65%, and sales to Asia rose by approximately 105%.
Launch of NanoGen Series
The upcoming launch of the NanoGen series, compact 3D sonars designed for smaller underwater vehicles, represents a significant advancement and is expected to address new market segments.
Precision Acoustics Contribution
The newly acquired Precision Acoustics business unit contributed 18.5% to the consolidated revenue and 13.4% to operating income in Q2 2025.
DAVD System Progress
The Diver Augmented Vision Display (DAVD) system saw orders of over $1.5 million in Q2 2025, expanding its user base within US Navy commands.
Negative Updates
Decreased Operating Income
Operating income decreased by 19.5% in Q2 2025, primarily due to lower gross profit margins in the core business and increased operating expenses.
Reduced Gross Profit Margins
Consolidated gross margin decreased from 70.2% in Q2 2024 to 64.1% in Q2 2025, with the marine technology business experiencing a decline from 80.2% to 67.7%.
Underutilization of Rental Assets
Rental assets were significantly underutilized, impacting gross profit margins due to changes in US policy on offshore renewables funding.
Increased Operating Expenses
Total operating expenses increased to $3.4 million in Q2 2025, a 41.7% rise from Q2 2024, driven by the addition of Precision Acoustics and currency exchange impacts.
Company Guidance
During Coda Octopus Group's second quarter fiscal 2025 earnings call, the company reported a 31.8% increase in revenue compared to the same period in 2024, reaching $7 million. The marine technology business, which represents 55.3% of consolidated revenue, saw a 10% increase in sales, with hardware sales rising by 65% to $3.3 million. The newly acquired Precision Acoustics Limited contributed 18.5% to consolidated revenue. However, operating income declined due to lower gross profit margins, which fell from 70.2% to 64.1%, primarily due to higher commission costs from increased sales in Asia and underutilization of rental assets. The company emphasized its growth strategy, focusing on expanding its market share in defense applications with its Echoscope and DAVD technologies, and announced the upcoming launch of the NanoGen series of 3D sonars. Despite increased operating expenses, Coda Octopus remains optimistic about future growth opportunities, particularly in defense and international markets.

Coda Octopus Group Financial Statement Overview

Summary
Coda Octopus Group demonstrates strong profitability and cash flow management, with efficient cost controls and a healthy conversion of profits into cash. However, recent revenue fluctuations and erratic balance sheet data suggest potential challenges in maintaining asset stability and growth momentum. The zero debt position strengthens financial stability but requires careful monitoring of asset and equity trends.
Income Statement
76
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
68
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
82
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.
BreakdownDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue20.32M19.35M22.23M21.33M20.04M
Gross Profit14.17M13.03M15.19M14.77M12.73M
EBITDA4.44M4.09M5.74M6.23M4.27M
Net Income3.65M3.12M4.30M4.95M3.34M
Balance Sheet
Total Assets57.54M51.84M46.93M45.47M38.04M
Cash, Cash Equivalents and Short-Term Investments22.48M24.45M22.93M17.75M15.13M
Total Debt413.17K0.000.0063.56K573.11K
Total Liabilities4.42M3.41M3.54M4.42M3.64M
Stockholders Equity53.13M48.43M43.38M41.05M34.40M
Cash Flow
Free Cash Flow1.86M259.54K6.17M2.31M3.44M
Operating Cash Flow2.45M2.39M6.73M3.27M4.43M
Investing Cash Flow-4.42M-1.52M-556.56K-964.20K-998.34K
Financing Cash Flow-15.63K-17.96K-91.90K139.32K162.41K

Coda Octopus Group Technical Analysis

Technical Analysis Sentiment
Positive
Last Price7.96
Price Trends
50DMA
7.83
Positive
100DMA
7.38
Positive
200DMA
7.58
Positive
Market Momentum
MACD
0.10
Negative
RSI
54.24
Neutral
STOCH
75.69
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CODA, the sentiment is Positive. The current price of 7.96 is above the 20-day moving average (MA) of 7.71, above the 50-day MA of 7.83, and above the 200-day MA of 7.58, indicating a bullish trend. The MACD of 0.10 indicates Negative momentum. The RSI at 54.24 is Neutral, neither overbought nor oversold. The STOCH value of 75.69 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for CODA.

Coda Octopus Group Peers Comparison

Overall Rating
UnderperformOutperform
Sector (64)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
76
Outperform
$79.85M15.5525.14%21.00%20.18%
75
Outperform
$213.48M17.5223.40%72.82%80.22%
72
Outperform
$89.99M26.416.40%24.78%23.18%
64
Neutral
$10.73B15.747.56%2.01%2.76%-15.10%
59
Neutral
$65.20M163.760.83%-17.36%-94.28%
49
Neutral
$31.01M18.87-3.87%-14.35%-105.66%
43
Neutral
$177.38M-91.98%-84.19%55.27%
* Industrials Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
CODA
Coda Octopus Group
7.96
0.97
13.88%
CVU
CPI Aerostructures
2.42
-0.53
-17.97%
ISSC
Innovative Solutions And Support
11.62
4.84
71.39%
SPCE
Virgin Galactic Holdings
3.22
-2.77
-46.24%
OPXS
Optex Systems Holdings
11.57
3.97
52.24%
VTSI
VirTra
5.83
-0.32
-5.20%

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
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.Date of analysis: Apr 29, 2025