Shares in Codan Ltd (ASX: CDA) have been absolutely unstoppable.
The ASX tech stock is now up 42% in 2026 alone and an eye-watering 137% over the past 12 months at the time of writing.
That kind of rally naturally raises one big question for investors: is it finally time to lock in profits, or could the stock still have further to run?
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Multiple growth drivers
Codan is not your typical ASX tech company.
The business develops electronic solutions for government, military, corporate, and consumer markets globally, with operations spanning two key divisions: communications and metal detection.
Right now, both businesses are firing. The communications division is benefiting from rising geopolitical tensions and growing defence spending globally.
In uncertain times, governments and military organisations tend to prioritise mission-critical communication systems early, and the $7 billion ASX tech stock appears well-positioned to benefit from that trend.
Demand has reportedly remained strong across areas linked to unmanned systems and software-defined radios, which are becoming increasingly important in modern defence and public safety applications. The company anticipates net profit after tax at around $170 million, up over 60% year on year.
Margins are also moving in the right direction. Codan now expects communications margins to hit 30% in FY26, earlier than previously forecast. That is a meaningful jump from around 26% in FY25.
And when margins expand in technology businesses, earnings can accelerate very quickly.
The gold boom is helping too
The company's Minelab metal detection business is also delivering strong momentum.
As gold prices surge globally, interest in gold prospecting has exploded, particularly across parts of Africa where small-scale mining activity remains widespread. That has created strong demand for Codan's gold detection products.
Importantly, the business is not relying solely on gold miners. The ASX tech stock also continues seeing healthy demand from recreational metal detector users globally, adding another layer of diversification to earnings.
Thanks to these combined tailwinds, Codan now expects FY26 revenue growth to land at the top end of its previously guided 15% to 20% range. That is an impressive result for a company that has already experienced such a massive share price rally.
So, should investors cash out?
Broker sentiment appears a little more cautious after the ASX tech stock's enormous run.
According to TradingView data, analyst views are mixed. Five out of nine brokers currently rate Codan shares as either a buy or strong buy, while three sit at a hold, and one has a sell recommendation.
The average 12-month price target sits roughly 10% above current levels, suggesting analysts still see some upside ahead, but perhaps not another explosive rally like the past year.
Bell Potter is among the more cautious brokers. It recently retained a hold rating and lifted its price target to $41.30, still below the recent share price near $43.
Meanwhile, Macquarie remains more bullish, highlighting Codan's growing exposure to the booming unmanned aerial vehicle (drone) market.
The broker upgraded the stock to outperform and lifted its price target to $44.20. That points to a 10% upside from current price levels.
