We came across a bullish thesis on Coda Octopus Group, Inc. (CODA) on Twitter by northeasternsvf. In this article, we will summarize the bulls’ thesis on CODA. Coda Octopus Group, Inc. (CODA)’s share was trading at $8.50 as of Jan 27th. CODA’s trailing and forward P/E were 31.31 and 18.94 respectively according to Yahoo Finance.
An autonomous underwater vehicle (AUV) gliding through the ocean depths.
Coda Octopus Group, based in Orlando, FL, is a leader in underwater imaging, mapping, and survey technologies with applications in both commercial and defense sectors. The company operates through two key segments: the Marine Technology Business, which accounts for 55.7% of revenues, and the Marine Engineering Business, contributing the remaining 44.3%. The Technology segment focuses on equipment rentals and sales of innovative products like the Echoscope® sonar series and the DAVD (Diver Augmented Vision Display) system. Meanwhile, the Engineering segment collaborates with major defense contractors, including Raytheon, Northrop Grumman, and Thales, to design and manufacture critical sub-assemblies, emphasizing recurring revenue streams as the business recovers from a COVID-induced downturn.
Global tensions, including the Ukraine war and rising maritime defense spending in the U.S. and EU, have created a favorable backdrop for Coda’s proprietary technologies. The U.S. is modernizing its naval fleet in response to Chinese expansion, while interest in autonomous underwater vehicles (AUVs) has surged globally. This positions Coda to capitalize on secular defense tailwinds through its advanced sonar systems and diver management solutions. Its flagship Echoscope PIPE offers unparalleled real-time 3D to 6D volumetric imaging, enabling precise navigation in GPS-denied areas. The DAVD system, with a $300M addressable market, integrates AR scene awareness, geolocation, and vital monitoring, filling critical gaps in diver equipment. Meanwhile, the newly launched Voice Hub 4 strengthens Coda’s competitive position as the first AI-powered underwater communication system, offering unique capabilities like helium voice descrambling and noise removal.
The company’s long-standing relationships with defense contractors and performance at key exhibitions like RIMPAC have driven multiple trials for its products, underscoring its potential to secure multi-year recurring contracts fueled by replacement cycles and product upgrades. Management’s pivot toward a sales-focused strategy further enhances growth opportunities in the $1B hull-scanning market and beyond. With a strong balance sheet, Coda is well-positioned to pursue both organic and inorganic growth, despite concerns over its recent acquisition of Precision Acoustics.
Coda’s robust pipeline and proprietary technology suite provide a pathway for significant growth, with management targeting increased recurring revenue and expanded adoption of its solutions. Factoring in these catalysts and ongoing tailwinds, the company is projected to achieve a price target of $23.05 by 2027, offering a compelling risk/reward opportunity for investors seeking exposure to advanced maritime defense technologies.
Coda Octopus Group, Inc. (CODA) is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 2 hedge fund portfolios held CODA at the end of the third quarter which was 1 in the previous quarter. While we acknowledge the risk and potential of CODA as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than CODA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article was originally published at Insider Monkey.