ASX tech share Codan Ltd (ASX: CDA) is among the weakest performers on the market on Friday, falling 6.6% to $30.91.
Codan is a global developer and supplier of electronics solutions for government, corporate, NGO, and consumer markets.
The company's technologies include metal detection and communications.
This ASX tech share has had a great run in 2025, up 90% in the year to date lately, including a more than 20% lift in October.
Last month's rise was driven by the roaring gold price, which set a new all-time record above US$4,300 per ounce.
At Codan's annual general meeting last month, CEO Alf Ianniello commented on gold's impact:
Sustained strength in the gold price is maintaining favourable conditions for Minelab, with the level of demand for gold detectors in Africa running above what was seen in the second half of FY25.
As a result, Minelab's overall revenues for the first quarter of FY26 have exceeded the monthly average achieved in FY25 by 16%.
Image source: Getty Images
What has pushed this ASX tech share 90% higher in 2025?
Codan delivered strong growth in FY25, with group revenue up 22%, EBIT expanding 28%, and net profit after tax (NPAT) rising 27%.
The communications segment of the business was the standout performer, delivering 26% revenue growth and 34% profit growth.
The CEO said the company's defence segment was growing:
Defence is now 38% of Communications revenue, reflecting our continued focus on longterm, high-value markets such as unmanned systems and soldier-worn technologies.
Our order book grew 28%, providing a strong foundation heading into FY26.
What's next for Codan shares?
Looking ahead to FY26, Ianniello said positive market conditions had continued into FY25, supporting Codan's growth outlook.
He commented:
Elevated defence spending and ongoing geopolitical tensions continue to support demand across Codan's Communications markets, with the business remaining on track to deliver 15 to 20% revenue growth for FY26.
Ianniello said Codan's strong balance sheet opened the door to new investments in FY26.
This may include further acquisitions, following its purchase of Kägwerks, a US-based leader in operator-worn soldier systems in FY25.
He commented:
With continued balance sheet capacity, a renewed $250 million debt facility, and a disciplined approach to capital allocation, Codan remains well positioned to continue investment in the business and pursue future acquisitions that enhance the quality and predictability of its revenues.
Why does this analyst say sell?
Toby Grimm from Baker Young describes "exceptional management execution" and strong sales growth for Codan in FY25.
On The Bull this week, Grimm commented:
Exceptional management execution and exposure to increasing defence spending involving encrypted communications technology amid record gold prices driving metal detectors have combined to generate strong sales growth.
However, the analyst said the ASX tech share had overshot its value in recent trading, prompting him to put a sell rating on Codan.
Grimm said market exuberance pushed the ASX tech share from $22.47 apiece on 5 August to $34.69 on 6 November.
He thinks it may be prudent to cash in those gains while the going is good, commenting:
… recent share price gains far exceed profit growth rates.
We believe investors are becoming overly optimistic about the sustainability of recent trends, leaving them exposed to disappointment.
We would be booking profits around current levels.
