ASX 200 tech stock Codan Ltd (ASX: CDA) has been on an extraordinary run.
Over the past 12 months, the ASX 200 tech stock has surged around 175%, rewarding investors handsomely. And the momentum hasn't slowed; shares are up 20% in just five days, 35% over the past month, and 52% year to date.
After such a powerful rally, investors are now asking the obvious question: is it time to take profits, or could there be more upside ahead?
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Firing on multiple fronts
Codan isn't your typical ASX 200 tech stock. The company develops electronic solutions for government, military, corporate, and consumer markets globally. Its operations are split into two key divisions: communications and metal detection.
Both are currently performing strongly. The communications segment is benefiting from rising geopolitical tensions, which are driving increased demand for defence and public safety technology. In conflict scenarios, communication systems are mission-critical and often upgraded early.
Codan is seeing solid demand across this segment. Particularly in areas that are linked to unmanned systems and software-defined radios, which are being adopted across a growing range of applications.
At the same time, margins are improving. The company now expects communications margins to reach 30% in FY26 — earlier than previously forecast — up from around 26% in FY25. That kind of margin expansion can significantly boost earnings.
Gold boom fuels metal detection
Codan's second engine is its Minelab metal detection business.
This division has experienced strong sales of gold detectors, particularly in regions such as Africa where small-scale mining activity is common. As gold prices rise, so does interest in prospecting and that flows directly into demand for Codan's products.
There's also steady demand from recreational users globally, adding another layer of growth.
Thanks to these tailwinds, the ASX tech stock now expects FY26 revenue growth to land at the top end of its previously guided 15% to 20% range.
What do analysts think?
Despite the strong performance, broker sentiment is more cautious.
According to TradingView data, most analysts rate Codan shares as a hold. The average 12-month price target sits slightly below current levels.
Bell Potter is among those urging caution. The broker recently retained a hold rating and lifted its price target to $41.30, still below the recent share price of around $43.
Bell Potter noted:
With relatively high levels of R&D spend strengthening CDA's competitive advantages across its businesses, CDA is well positioned to benefit from increased demand for mission-critical connectivity solutions in both defence and public safety markets. We believe CDA shares trade at fair value on 33x FY26 EV / EBIT amidst improving operating momentum and improving outlook in both segments.
Foolish Takeaway
Codan is delivering strong growth across both of its core divisions. Powerful global trends in defence and gold demand also support the ASX tech stock.
But after a 175% surge, much of that optimism may already be priced in. For investors, the question now isn't whether the business is performing, it's whether the valuation still leaves room for upside.
