Napco Security (NSSC)
NASDAQ:NSSC
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Napco Security Technologies
(NASDAQ:NSSC)
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Rating:68Neutral
Price Target:
$39.00
▼(-14.06% Downside)
Action:Downgraded
Date:06/04/26
The score is led by strong financial quality (high margins, strong free cash flow, and very low leverage), but is held back by weak technicals (below major moving averages with negative MACD) and a relatively expensive valuation (P/E ~35). Corporate updates are constructive on revenue/margins, though the litigation settlement adds near-term noise and risk.
Positive Factors
High Profitability & Margins
Sustained high gross and net margins indicate structurally profitable product and service mix (recurring communications and high-margin equipment). This margin cushion supports reinvestment, dividend policy and resilience to cost inflation, sustaining long-term returns even if top-line growth cools.
Negative Factors
Cooling Earnings Power
A downshift in profitability and slower revenue growth suggests weaker operating leverage ahead. If growth remains muted, fixed costs and R&D/SG&A must be managed tightly to avoid margin pressure; lower growth also limits incremental scale benefits and long-term EPS trajectory.
Read all positive and negative factors
Positive Factors
Negative Factors
High Profitability & Margins
Sustained high gross and net margins indicate structurally profitable product and service mix (recurring communications and high-margin equipment). This margin cushion supports reinvestment, dividend policy and resilience to cost inflation, sustaining long-term returns even if top-line growth cools.
Read all positive factors
Napco Security Technologies Key Performance Indicators (KPIs)
Any
Revenue by Geography
Shows how much revenue comes from different regions (e.g., U.S., EMEA, Asia), revealing reliance on particular markets, exposure to currency and local economic cycles, and where Napco may have room to expand or face regulatory or competitive risks.
Shows how much revenue comes from different regions (e.g., U.S., EMEA, Asia), revealing reliance on particular markets, exposure to currency and local economic cycles, and where Napco may have room to expand or face regulatory or competitive risks.
Data provided by:
The Fly
The FlyNapco Security Technologies (NSSC) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$1.33B
Dividend Yield1.29%
Average Volume (3M)424.69K
Price to Earnings (P/E)36.3
Beta (1Y)1.46
Revenue Growth8.83%
EPS Growth-16.34%
CountryUS
Employees1,070
SectorIndustrials
Sector Strength72
IndustrySecurity & Protection Services
Share Statistics
EPS (TTM)1.03
Shares Outstanding35,727,337
10 Day Avg. Volume375,580
30 Day Avg. Volume424,685
Financial Highlights & Ratios
PEG Ratio-2.23
Price to Book (P/B)6.39
Price to Sales (P/S)5.93
P/FCF Ratio20.96
Enterprise Value/Market Cap0.93
Enterprise Value/Revenue6.24
Enterprise Value/Gross Profit10.96
Enterprise Value/Ebitda27.14
Forecast
1Y Price Target
$50.80Price Target Upside11.94% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering5
EPS Forecast (FY)1.43
Revenue Forecast (FY)$202.15M
Napco Security Technologies Business Overview & Revenue Model
Company Description
Operating both within the U.S. and globally, Napco Security Technologies, Inc. (NSSC) specializes in the creation, production, and distribution of advanced electronic security solutions. Their comprehensive product portfolio includes access manage...
How the Company Makes Money
NSSC makes money primarily by selling security hardware and related solutions to the professional security channel (distributors, dealers, and integrators) who then install and service end users. A major revenue stream is product sales across its ...
Napco Security Technologies Earnings Call Summary
Earnings Call Date:Feb 02, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Aug 31, 2026
Earnings Call Sentiment Positive
The call conveyed strong operational and financial momentum: record Q2 revenue (+12.2%), double-digit growth in both equipment and recurring revenue, expanding gross margins, robust profitability (operating income +32%, net income +29%, adjusted EBITDA +26%), rising free cash flow, and a debt-free balance sheet with $115M in cash. Key strategic initiatives — including continued StarLink adoption, door-locking strength, and the MVP cloud platform — position the company for continued high-margin recurring revenue growth. Minor headwinds include a modest decline in recurring gross margin (driven by one-time comparative effects and higher data costs), higher tax provision, lower interest income, elevated SG&A on a six-month basis, and that MVP and ADI-driven locking contributions will take more time to scale. Overall, positives (record revenue, margin expansion, strong cash and profitability, strategic product momentum) substantially outweigh the limited operational and timing challenges, implying an upbeat outlook with manageable risks.Positive Updates
Record Q2 Revenue and Year-over-Year Growth
Net revenue of $48.2 million in Q2, a record for the quarter, representing a 12.2% increase versus prior-year Q2; net revenue for the first six months rose 12% to $97.3 million.
Negative Updates
Slight Decline in Recurring Gross Margin
Recurring service gross margin declined modestly to 90.2% from 91.3% a year ago (Q2), attributed to one-time credits that reduced comparative-period royalty expense and marginal increases in data costs for network operations.
Read all updates
Q2-2026 Updates
Positive
Negative
Record Q2 Revenue and Year-over-Year Growth
Net revenue of $48.2 million in Q2, a record for the quarter, representing a 12.2% increase versus prior-year Q2; net revenue for the first six months rose 12% to $97.3 million.
Read all positive updates
Company Guidance
Management reiterated they expect to continue the fiscal‑2026 momentum, calling out record Q2 revenue of $48.2M (+12.2% Y/Y) with equipment revenue $24.3M (+12% Y/Y) and recurring monthly service revenue $23.8M (+12.5% Y/Y) that now implies a prospective annualized recurring revenue run‑rate of ~$99M (up from $95M last quarter); margins and profitability are expected to remain strong (Q2 gross margin 58.6%, equipment margin ~27.6–28%, recurring gross margin 90.2%), with operating income $14.8M (+32%), net income $13.5M (28% of revenue, +29%), adjusted EBITDA $15.3M (31.9% margin, +26%), and free cash flow $14.5M (30.1% margin); they said pricing actions are largely baked in for the year, expect equipment margins to continue improving toward the low‑30%s, anticipate MVP access control to begin contributing meaningfully in the back half of calendar 2026 (more visibility in fiscal 2027), plan modest capex ($0.6M Q2; $0.8M 6 months), and highlighted a strong, debt‑free balance sheet with $115.4M cash/marketable securities and an increased quarterly dividend of $0.15/share.Napco Security Technologies Financial Statement Overview
Summary
Income Statement
80
Positive
Balance Sheet
92
Very Positive
Cash Flow
88
Very Positive
| Breakdown | TTM | Jun 2025 | Jun 2024 | Jun 2023 | Jun 2022 | Jun 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 197.23M | 181.62M | 188.82M | 170.00M | 143.59M | 143.59M |
| Gross Profit | 112.37M | 101.03M | 101.75M | 73.23M | 59.16M | 59.16M |
| EBITDA | 45.38M | 52.34M | 58.55M | 33.16M | 23.90M | 23.90M |
| Net Income | 36.89M | 43.41M | 49.82M | 27.13M | 19.60M | 19.60M |
Balance Sheet | ||||||
| Total Assets | 222.01M | 198.14M | 198.14M | 207.75M | 166.65M | 148.58M |
| Cash, Cash Equivalents and Short-Term Investments | 124.95M | 99.18M | 99.18M | 97.72M | 66.75M | 46.80M |
| Total Debt | 5.22M | 5.33M | 5.33M | 5.51M | 5.69M | 7.07M |
| Total Liabilities | 44.23M | 29.54M | 29.54M | 28.86M | 26.48M | 34.78M |
| Stockholders Equity | 177.78M | 168.61M | 168.61M | 178.89M | 140.17M | 113.79M |
Cash Flow | ||||||
| Free Cash Flow | 56.37M | 51.41M | 43.77M | 21.74M | 6.85M | 21.98M |
| Operating Cash Flow | 58.12M | 53.53M | 45.37M | 24.70M | 8.33M | 22.99M |
| Investing Cash Flow | 3.87M | 14.59M | -3.15M | -28.26M | -1.56M | -6.43M |
| Financing Cash Flow | -20.99M | -50.37M | -12.83M | -2.21M | 155.00K | 0.00 |
Napco Security Technologies Technical Analysis
Neutral
45.38
Price Trends
40.04
Negative
41.01
Negative
41.14
Negative
Market Momentum
-0.93
Negative
51.46
Neutral
77.84
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For NSSC, the sentiment is Neutral. The current price of 45.38 is above the 20-day moving average (MA) of 36.12, above the 50-day MA of 40.04, and above the 200-day MA of 41.14, indicating a neutral trend. The MACD of -0.93 indicates Negative momentum. The RSI at 51.46 is Neutral, neither overbought nor oversold. The STOCH value of 77.84 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for NSSC.
Napco Security Technologies Risk Analysis
Napco Security Technologies disclosed 29 risk factors in its most recent earnings report. Napco Security Technologies reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Napco Security Technologies Peers Comparison
UnderperformOutperform
Sector (63)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
76 Outperform | $1.40B | 46.13 | 22.92% | ― | 10.85% | ― | |
70 Outperform | $5.37B | 8.76 | 16.74% | 2.73% | 3.29% | 22.63% | |
68 Neutral | $1.33B | 36.35 | 20.86% | 1.29% | 8.83% | -16.34% | |
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% | |
51 Neutral | $1.10B | -29.77 | -33.53% | ― | 40.54% | 20.94% | |
48 Neutral | $4.79B | -9.65 | -17.64% | ― | 8.08% | -1039.66% | |
47 Neutral | $34.33M | -0.76 | -143.53% | ― | 25.86% | 68.12% |
* Industrials Sector Average
NSSC
Napco Security Technologies
37.57
9.34
33.07%
ADT
Adt
6.70
-1.20
-15.19%
ARLO
Arlo Technologies
13.21
-4.07
-23.55%
REZI
Resideo Technologies
31.62
10.74
51.44%
EVLV
Evolv Technologies Holdings
6.13
0.90
17.21%
KSCP
Knightscope Inc Class A
2.04
-3.34
-62.08%
Napco Security Technologies Corporate Events
DividendsFinancial DisclosuresLegal Proceedings
Napco Security Posts Strong Q3 2026 Revenue Growth
Positive
May 4, 2026
In the third quarter of fiscal 2026, ended March 31, NAPCO Security Technologies reported net revenue of $49.2 million, up 11.8% year on year, driven by an 8.4% rise in equipment sales to $24.2 million and a 15.4% increase in recurring service rev...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.