Napco Security Technologies (NSSC) AI Stock Analysis

• Market Cap: $1.66B
• Dividend Yield: 1.29%
• Average Volume (3M): 502.79K
• Price to Earnings (P/E): 35.3
• Beta (1Y): 1.43
• Revenue Growth: -2.28%
• EPS Growth: -9.94%
• Country: US
• Employees: 1,070
• Sector: Industrials
• Sector Strength: 72
• Industry: Security & Protection Services
• EPS (TTM): 0.38
• Shares Outstanding: 35,664,326
• 10 Day Avg. Volume: 489,964
• 30 Day Avg. Volume: 502,787
• PEG Ratio: -2.23
• Price to Book (P/B): 6.39
• Price to Sales (P/S): 5.93
• P/FCF Ratio: 20.96
• Enterprise Value/Market Cap: 0.94
• Enterprise Value/Revenue: 8.14
• Enterprise Value/Gross Profit: 14.47
• Enterprise Value/Ebitda: 28.76
• 1Y Price Target: $49.20
• Price Target Upside: 5.56% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 6
• EPS Forecast (FY): 1.44
• Revenue Forecast (FY): $202.20M

• Rating: 78 Outperform
• Price Target: $47.00 ▲(0.84% Upside)
• Action: Reiterated Date: 02/03/26
• Date: Action: Reiterated 02/03/26

Strong overall score driven primarily by high-quality financial performance (strong margins, ROE, cash generation, low leverage) and a positive earnings-call outlook with continued revenue, margin, and free-cash-flow momentum. Offsetting factors are mixed technical signals (negative MACD; price below 100DMA) and a somewhat elevated P/E despite a modest dividend yield.

Positive Factors

High-margin recurring revenue run-rate

A near-$99M annualized recurring revenue run‑rate with recurring services making up almost half of sales and very high gross margins provides durable, predictable cashflows. This subscription backbone supports margin stability, long-term customer retention, and scalable operating leverage.

Robust profitability and returns

Sustained high gross and operating margins alongside mid-to-high‑20s ROE indicate strong pricing power and capital efficiency. These structural profitability metrics enable reinvestment, dividends, and resilience to demand swings, supporting long-term shareholder returns and strategic initiatives.

Strong balance sheet and cash generation

A debt‑free balance sheet with sizeable cash and consistent free cash flow conversion gives durable financial flexibility. It funds modest capex, dividend increases, product development and M&A optionality while lowering refinancing risk and supporting multi‑year growth execution.

Negative Factors

Revenue and cash‑flow volatility

Intermittent top‑line and cash‑flow swings complicate capacity planning and margin predictability despite strong average margins. Persistent variability can pressure working capital, delay reinvestment timing, and increase execution risk for multi‑year product rollouts and recurring revenue targets.

Delayed MVP ramp / execution risk

The MVP platform is strategically important for recurring access‑control revenue, but a back‑half 2026+ revenue contribution creates execution timing risk. Delays or slower adoption would postpone expected high‑margin recurring lift and could allow competitors to capture share in cloud access control.

Limited ADI adoption for locking products

Underperformance with a major distributor limits scale in the high‑margin locking segment. Persistent distribution gaps can cap equipment and associated recurring revenue growth, increase customer acquisition costs, and slow the firm’s ability to leverage channel partners for nationwide penetration.

Napco Security Technologies Business Overview & Revenue Model

Company Description

Napco Security Technologies, Inc. develops, manufactures, and sells electronic security products in the United States and internationally. The company offers access control systems, door-locking products, intrusion and fire alarm systems, and video surveillance systems for commercial, residential, institutional, industrial, and governmental applications. Its access control systems include various types of identification readers, control panels, PC-based computers, and electronically activated door-locking devices; and door locking devices comprise microprocessor-based electronic door locks with push button, card readers and bio-metric operation, door alarms, mechanical door locks, and simple dead bolt locks. The company's alarm systems include automatic communicators, cellular communication devices, control panels, combination control panels/digital communicators and digital keypad systems, fire alarm control panels, and area detectors; and video surveillance systems comprise video cameras, control panels, video monitors, or PCs. It also buys and resells various identification readers, video cameras, PC-based computers, and peripheral equipment for access control and video surveillance systems; offers school security products; and markets peripheral and related equipment manufactured by other companies. The company markets and sells its products primarily to independent distributors, dealers, and installers of security equipment. Napco Security Technologies, Inc. was founded in 1969 and is headquartered in Amityville, New York.

How the Company Makes Money

NSSC generates revenue through multiple streams including the sale of security equipment, software, and subscription services. The primary revenue source comes from the direct sale of its security products to distributors and installers, who then sell these products to end-users. Additionally, NSSC offers monitoring services that provide recurring revenue through monthly fees. Strategic partnerships with various security dealers and integrators further enhance its distribution capabilities, allowing the company to reach a wider market. The ongoing demand for enhanced security solutions, particularly in the wake of increasing safety concerns, continues to drive growth and profitability for NSSC.

Napco Security Technologies Financial Statement Overview

Summary

High-quality fundamentals: strong profitability (TTM gross margin ~56%, net margin ~24%, EBIT margin ~26%), excellent ROE (mid-to-high 20%s), minimal leverage (debt/equity ~0.03), and robust cash generation (FCF ~97% of net income). Main risk is uneven revenue and cash-flow growth across years, indicating some demand/timing volatility despite strong margins.

Income Statement

Profitability is strong, with TTM (Trailing-Twelve-Months) gross margin around 56% and net margin near 24%, supported by healthy operating profitability (EBIT margin ~26%). The company also shows a multi-year step-up in margins versus 2022–2023 levels. The main weakness is growth volatility: revenue growth is very high in TTM (Trailing-Twelve-Months), but the most recent annual period shows a slight revenue decline, indicating less consistent top-line momentum.

Balance Sheet

The balance sheet is conservatively levered, with very low debt relative to equity (roughly 0.03 in both TTM (Trailing-Twelve-Months) and the latest annual period). Returns for shareholders are strong (return on equity in the mid-to-high 20% range), suggesting efficient use of capital. A potential watch item is that equity levels have not risen meaningfully across the last couple of annual periods, which could limit balance-sheet-driven flexibility if growth investments increase.

Cash Flow

Cash generation is robust: TTM (Trailing-Twelve-Months) operating cash flow exceeds net income by a wide margin, and free cash flow closely tracks reported earnings (free cash flow is ~97% of net income). Free cash flow growth is positive in the latest periods, though it has been uneven historically (including a notable dip in 2022), implying some variability in cash conversion year-to-year.

Breakdown	TTM	Jun 2025	Jun 2024	Jun 2023	Jun 2022	Jun 2021
Income Statement
Total Revenue	192.03M	181.62M	188.82M	170.00M	143.59M	143.59M
Gross Profit	108.01M	101.03M	101.75M	73.23M	59.16M	59.16M
EBITDA	54.33M	48.53M	55.98M	32.26M	20.00M	20.00M
Net Income	47.42M	43.41M	49.82M	27.13M	19.60M	19.60M
Balance Sheet
Total Assets	212.82M	198.14M	198.14M	207.75M	166.65M	148.58M
Cash, Cash Equivalents and Short-Term Investments	115.38M	99.18M	99.18M	97.72M	66.75M	46.80M
Total Debt	5.25M	5.33M	5.33M	5.51M	5.69M	7.07M
Total Liabilities	28.01M	29.54M	29.54M	28.86M	26.48M	34.78M
Stockholders Equity	184.81M	168.61M	168.61M	178.89M	140.17M	113.79M
Cash Flow
Free Cash Flow	53.66M	51.41M	43.77M	21.74M	6.85M	21.98M
Operating Cash Flow	54.74M	53.53M	45.37M	24.70M	8.33M	22.99M
Investing Cash Flow	1.96M	14.59M	-3.15M	-28.26M	-1.56M	-6.43M
Financing Cash Flow	-37.79M	-50.37M	-12.83M	-2.21M	155.00K	0.00

Napco Security Technologies Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 46.61
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For NSSC, the sentiment is Positive. The current price of 46.61 is above the 20-day moving average (MA) of 43.93, above the 50-day MA of 42.09, and above the 200-day MA of 37.28, indicating a bullish trend. The MACD of 1.52 indicates Negative momentum. The RSI at 66.81 is Neutral, neither overbought nor oversold. The STOCH value of 90.39 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for NSSC.

Napco Security Technologies Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
NSSC	78 Outperform	$1.66B	35.32	26.42%	1.29%	-2.28%	-9.94%
ARLO	71 Outperform	$1.66B	117.62	3.80%	―	-2.83%	―
ADT	69 Neutral	$6.57B	11.45	17.24%	2.73%	4.77%	-22.78%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
REZI	56 Neutral	$5.85B	-9.60	-16.93%	―	15.45%	-488.24%
EVLV	48 Neutral	$925.47M	-14.52	-51.67%	―	41.61%	-1.76%
KSCP	41 Neutral	$45.69M	-0.59	-164.48%	―	5.50%	51.32%

Napco Security Technologies Corporate Events

Napco Security Reports Record Quarterly Revenue and Earnings Growth

On January 29, 2026, NAPCO Security Technologies appointed veteran business development executive Joseph Pipczynski as Chief Revenue Officer, reporting to President and COO Kevin S. Buchel, in a move aimed at strengthening sales leadership, with Senior Vice President of Sales Stephen Spinelli now reporting to Pipczynski. Also on January 29, 2026, the board declared a quarterly cash dividend of $0.15 per share, a 7% increase over the prior quarter, payable April 3, 2026 to shareholders of record on March 12, 2026, underscoring management’s confidence in the company’s financial strength. For the fiscal second quarter ended December 31, 2025, reported on February 2, 2026, NAPCO posted record net revenues of $48.2 million, up 12.2% year over year, driven by double-digit growth in both equipment revenue and high-margin recurring service revenue, which reached $23.8 million with a 90.2% gross margin and an annualized run rate of about $99 million; net income rose 29% to $13.5 million, gross margin improved to 58.6%, diluted EPS increased to $0.38 from $0.28, and adjusted EBITDA margin expanded to 31.9%, reinforcing the company’s positioning as a profitable, growth-focused player in security technology and recurring services for investors and other stakeholders.

The most recent analyst rating on (NSSC) stock is a Buy with a $50.00 price target. To see the full list of analyst forecasts on Napco Security Technologies stock, see the NSSC Stock Forecast page.

Napco Security Technologies Holds Annual Meeting

Napco Security Technologies held its Annual Meeting where key decisions were made regarding the company’s governance and financial oversight. During the meeting, Richard L. Soloway, Kevin S. Buchel, and David Paterson were elected to the Board of Directors, and Deloitte & Touche LLP was ratified as the independent registered public accountants for fiscal 2026.

The most recent analyst rating on (NSSC) stock is a Buy with a $47.00 price target. To see the full list of analyst forecasts on Napco Security Technologies stock, see the NSSC Stock Forecast page.