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Category: Stock Market and Coda Octopus
Date: 17 September 2019 Stock Price: $9.48 We take a look at the 3rd quarter earnings release of their 2019 fiscal year of 3D subsea sonar technology group Coda Octopus.
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About Coda Octopus
The Company, founded in 1994, manufactures and markets patented real-time 3D subsea sonar technology, the Echoscope®, which enables real-time 3D imaging and mapping in zero visibility conditions underwater. Echoscope® is used globally in numerous applications including defense, marine construction, oil and gas subsea infrastructure installation and surveys, and port and harbor security. In addition to the Marine Products business, Coda Octopus Products Ltd., CODA’s two defense products and engineering services businesses are Coda Octopus Colmek and Coda Octopus Martech.
The image below shows some of the Marine Products clients.
The image below shows some of the Marine Products clients.
Overview of Coda Octopus' latest earnings report
The numbers we are interested in (for the quarter):
- Total revenue: $6.688 million (up from $5.778 million from the same quarter of the previous year)
- Revenues increased by 15.7% over the last 12 months
- Cost of Revenues: $2.120 million (up from $1.584 million for the same quarter of the previous year)
- Cost of revenues increased by 33.8% over the last 12 months
- Net income: $1.775 million (down from $1.997 million for the same quarter of the previous year)
- Diluted earnings per share: $0.17 (down from $0.19 for the same quarter of the previous year)
- Diluted weighted-average shares outstanding: 10.679 million (up from 10.615 million for the same quarter of the previous year)
- Cash and cash equivalents: $9.083 million
- Cash and cash equivalents per share: $0.918
- Cash and cash equivalents makes up 9.68% of Coda Octopus' market capital
- Cash and cash equivalents makes up 294% of Coda Octopus' total assets
- Receivables: $3.851 million
- Receivables makes up 11.54% of Coda Octopus' total assets
- Inventories: $4.354 million
- Inventories makes up 13.1% of Coda Octopus' total assets
- Stockholders equity: $28.915 million
- Stockholders equity per share: $2.71
- Coda Octopus is trading at 3.49 times its stockholders equity
- Cash generated from operations for 9 months: $5.084 million
- Cash generated from operations per share for 9 months: $0.476
Coda Octopus' management commentary on the results and earnings guidance
ORLANDO, FL, Sept. 16, 2019 (GLOBE NEWSWIRE) -- Coda Octopus Group, Inc. (CODA) (Nasdaq: CODA) today reported its unaudited financial results for its fiscal third quarter ended July 31, 2019.
Annmarie Gayle, CODA’s Chairman and CEO, commented: “In our fiscal third quarter we continued to advance our focused R&D strategy with multiple initiatives across both operating units within our Group. We progressed our work on a number of strategic defense programs, where our real-time 3D sonar technology is being evaluated for potential adoption. Additionally, we were awarded two new defense evaluation projects, after competitive bidding, where the projects’ sponsors are seeking technology for new underwater vehicles. We also continue to advance on the defense programs under contract, including DARPA’s Persistent Aquatic Living Sensors (PALS), and we recently reported on the NASA trials and outlook of the NAVSEA’s Diver Augmented Vision Display (DAVD) Head-Up Display (HUD)program. We consider our ongoing R&D investments to be foundational for the Group’s organic growth strategy we are pursuing.
“During the quarter, we released for customer trials the Beta version of our all new fourth-generation Underwater Survey Explorer (“4G USE”) top-end software. 4G USE is a significant ground-up software development. Its design is based on a new enterprise-class architecture, capturing the latest breakthroughs in CPU and GPU processing capabilities. We have been developing our current USE software for over 15 years, gradually increasing its functionality. Recently, the subsea market has embraced change with big data and faster, results-driven processing. The vision and goals for 4G USE are to see and use more sensor data, automate process and tasks, and provide clear, intelligent decision making. Fully integrated with our latest 4G range of real-time 3D imaging sonars, teams of engineers can now execute more complex tasks using multiple sonars and multi-aspect imaging in real-time under this new enterprise collaborative platform. This product is a significant achievement by our R&D team and a major step forward for the business,” added Ms. Gayle.
“As previously reported, Coda Octopus Colmek, which is part of our defense products and engineering business, has recently completed the majority of the next-generation development of the Thermite® family of rugged, embedded, high performance mission computers. The business has a number of significant customer field tests and prototype/development stage work underway. The most advanced are extensive field trials that aim to integrate the Thermite® New Generation Octal® Embedded Rugged Computer into larger mobile military systems, both land and air vehicles, for both domestic and Allied customers. We have received requests to furnish quotations for the Octal® into a diverse array of projects, and expect the Thermite® product line to increase revenue growth for this division, beginning in late 2019,” continued Ms. Gayle. “I am also very pleased that both business units achieved their business plans during the quarter. In the previous comparable third quarter, our defense products and engineering business was adversely affected by delays in concluding contracts, due to delays in approving the U.S. defense budget. This business unit continues to execute backlog orders and is back on plan.”
Annmarie Gayle, CODA’s Chairman and CEO, commented: “In our fiscal third quarter we continued to advance our focused R&D strategy with multiple initiatives across both operating units within our Group. We progressed our work on a number of strategic defense programs, where our real-time 3D sonar technology is being evaluated for potential adoption. Additionally, we were awarded two new defense evaluation projects, after competitive bidding, where the projects’ sponsors are seeking technology for new underwater vehicles. We also continue to advance on the defense programs under contract, including DARPA’s Persistent Aquatic Living Sensors (PALS), and we recently reported on the NASA trials and outlook of the NAVSEA’s Diver Augmented Vision Display (DAVD) Head-Up Display (HUD)program. We consider our ongoing R&D investments to be foundational for the Group’s organic growth strategy we are pursuing.
“During the quarter, we released for customer trials the Beta version of our all new fourth-generation Underwater Survey Explorer (“4G USE”) top-end software. 4G USE is a significant ground-up software development. Its design is based on a new enterprise-class architecture, capturing the latest breakthroughs in CPU and GPU processing capabilities. We have been developing our current USE software for over 15 years, gradually increasing its functionality. Recently, the subsea market has embraced change with big data and faster, results-driven processing. The vision and goals for 4G USE are to see and use more sensor data, automate process and tasks, and provide clear, intelligent decision making. Fully integrated with our latest 4G range of real-time 3D imaging sonars, teams of engineers can now execute more complex tasks using multiple sonars and multi-aspect imaging in real-time under this new enterprise collaborative platform. This product is a significant achievement by our R&D team and a major step forward for the business,” added Ms. Gayle.
“As previously reported, Coda Octopus Colmek, which is part of our defense products and engineering business, has recently completed the majority of the next-generation development of the Thermite® family of rugged, embedded, high performance mission computers. The business has a number of significant customer field tests and prototype/development stage work underway. The most advanced are extensive field trials that aim to integrate the Thermite® New Generation Octal® Embedded Rugged Computer into larger mobile military systems, both land and air vehicles, for both domestic and Allied customers. We have received requests to furnish quotations for the Octal® into a diverse array of projects, and expect the Thermite® product line to increase revenue growth for this division, beginning in late 2019,” continued Ms. Gayle. “I am also very pleased that both business units achieved their business plans during the quarter. In the previous comparable third quarter, our defense products and engineering business was adversely affected by delays in concluding contracts, due to delays in approving the U.S. defense budget. This business unit continues to execute backlog orders and is back on plan.”
Coda Octopus (NASDAQ:CODA) stock price history
The image below, obtained from Google, shows the stock price history of Coda Octopus (NASDAQ: CODA) for the last 5 years. And its been a very good time for Coda Octopus stockholders. 5 years ago the stock was trading at around $1.25 and its currently trading at $9.48. That's a very very strong return of 658% return provided to Coda Octopus investors over the last 5 years. The stock is trading at a lot closer to 52 week low than it is to its 52 week high, which shows the shorter term sentiment and momentum of the stock is negative. And based on the image below one can see the stock traded down by almost 13% in after hours trade.
Coda Octopus (NASDAQ: CODA) latest stock valuation
So based on the earnings report of Coda Octopus (NASDAQ: CODA) and what do we value Coda Octopus (CODA) stock at? Based on the earnings reported our valuation model provides a target (full value) price for Coda Octopus at $9.90 a stock. We therefore believe that Coda Octopus is very close to full value. We would not recommend investors buy into Coda Octopus at its current price, but we suggest investors look to enter the stock at least 10% below our target (full value) price of $80.90. A good entry would therefore be at around $8.90 or below for a Coda Octopus stock