Napco Security Technologies (NSSC) AI Stock Analysis

• Market Cap: $1.02B
• Dividend Yield: 1.98%
• Average Volume (3M): 442.53K
• Price to Earnings (P/E): 23.4
• Beta (1Y): 1.43
• Revenue Growth: -1.05%
• EPS Growth: -2.78%
• Country: US
• Employees: 1,070
• Sector: Industrials
• Sector Strength: 90
• Industry: Security & Protection Services
• EPS (TTM): 0.28
• Shares Outstanding: 35,656,420
• 10 Day Avg. Volume: 360,905
• 30 Day Avg. Volume: 442,530
• PEG Ratio: 1.18
• Price to Book (P/B): 9.08
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 58.56
• Enterprise Value/Market Cap: 1.21
• Enterprise Value/Revenue: 1.66
• Enterprise Value/Gross Profit: 12.18
• Enterprise Value/Ebitda: 5.80
• 1Y Price Target: $27.13
• Price Target Upside: -1.70% Downside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 5

• Rating: 78 Outperform
• Price Target: $33.00 ▲(19.57%Upside)

Napco Security Technologies' strong financial performance is the most significant factor driving its score, supported by robust profitability and cash flow. While technical indicators show short-term optimism, overbought signals and longer-term trends temper enthusiasm. The earnings call reveals strengths in recurring revenues and potential growth, yet highlights areas of concern in sales declines and income drops. Valuation suggests a fair price, with moderate dividend yield support.

Positive Factors

Balance Sheet

The strong balance sheet and buyback should help create a backstop in the near term.

Financial Performance

NAPCO came in slightly ahead of expectations on both the top and bottom line, results were generally positive.

Market Position

NAPCO has grown or maintained market share among its key distributors and dealers.

Negative Factors

Distributor Feedback

Distributors paint less than rosy picture of market.

Macroeconomic Environment

Visibility remains weak, both from a macro perspective and as it relates to several key distributors.

Sales Performance

Equipment sales struggled due in particular to a $5.1 million combined downdraft at three of NAPCO's largest distributors.

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

Napco Security Technologies generates revenue primarily through the sale of its security products, which include intrusion alarms, fire alarms, access control systems, and video surveillance equipment. The company's key revenue streams are product sales to distributors, dealers, and integrators who then sell to end-users. Napco's products are also used in various sectors, including residential, commercial, institutional, industrial, and government markets. Additionally, the company benefits from recurring revenue through its service offerings, which include monitoring and support for their security systems. Partnerships with distributors and security system dealers are significant contributors to its earnings, providing a broad market reach and facilitating the sale of its comprehensive security solutions.

Napco Security Technologies Financial Statement Overview

Summary

Napco Security Technologies demonstrates strong financial health across all verticals with high profitability, minimal leverage, and robust cash flow generation. The company's efficient operations and capital management position it well for continued growth within the Security & Protection Services industry.

Income Statement

The income statement shows healthy profit margins with a Gross Profit Margin of 56.31% and a Net Profit Margin of 25.01% for TTM. Revenue growth slowed slightly in the TTM compared to the previous year, but EBIT and EBITDA margins remain robust at 26.57% and 27.47%, respectively. Overall, the company demonstrates strong profitability and efficient cost management.

Balance Sheet

The balance sheet is strong with a low Debt-to-Equity Ratio of 0.03 and a high Equity Ratio of 84.62%. Return on Equity is impressive at 28.05%, indicating effective use of equity to generate profits. The company's leverage is minimal, enhancing financial stability and reducing risk.

Cash Flow

Cash flow analysis reveals positive trends with a significant Free Cash Flow Growth Rate of 16.05% in the TTM. The Operating Cash Flow to Net Income Ratio is 1.17, indicating strong cash generation relative to net income. The Free Cash Flow to Net Income Ratio is also high at 1.12, reflecting efficient cash flow conversion.

Breakdown
TTM	Jun 2024	Jun 2023	Jun 2022	Jun 2021	Jun 2020
Income Statement		Total Revenue
181.23M	188.82M	170.00M	143.59M	114.03M	101.36M
	Gross Profit
102.08M	101.75M	73.23M	59.16M	50.15M	43.59M
	EBIT
48.14M	53.82M	30.32M	18.23M	17.34M	10.81M
	EBITDA
49.81M	55.98M	32.26M	20.00M	19.63M	14.16M
	Net Income Common Stockholders
45.31M	49.82M	27.13M	19.60M	15.41M	7.79M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
89.30M	97.72M	66.75M	46.80M	40.22M	18.25M
	Total Assets
190.86M	207.75M	166.65M	148.58M	123.29M	105.84M
	Total Debt
5.38M	5.51M	5.69M	7.07M	10.99M	11.02M
	Net Debt
-68.04M	-59.83M	-30.27M	-34.66M	-23.81M	-7.23M
	Total Liabilities
29.32M	28.86M	26.48M	34.78M	30.06M	27.94M
	Stockholders Equity
161.55M	178.89M	140.17M	113.79M	93.24M	77.90M
Cash Flow		Free Cash Flow
50.81M	43.77M	21.74M	6.85M	21.98M	8.69M
	Operating Cash Flow
53.24M	45.37M	24.70M	8.33M	22.99M	10.31M
	Investing Cash Flow
14.25M	-3.15M	-28.26M	-1.56M	-6.43M	-1.61M
	Financing Cash Flow
-49.59M	-12.83M	-2.21M	155.00K	0.00	1.53M

Napco Security Technologies Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 27.60
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For NSSC, the sentiment is Negative. The current price of 27.6 is below the 20-day moving average (MA) of 28.17, above the 50-day MA of 25.13, and below the 200-day MA of 31.85, indicating a neutral trend. The MACD of 0.73 indicates Positive momentum. The RSI at 53.19 is Neutral, neither overbought nor oversold. The STOCH value of 39.02 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative 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	$1.02B	23.39	27.48%	1.98%	-1.05%	-2.78%
SNT	74 Outperform	$90.04M	65.29	-3.47%	―	―	―
CIX	73 Outperform	$307.22M	17.10	11.35%	4.92%	-9.51%	-26.61%
ARLO	73 Outperform	$1.76B	―	-21.34%	―	0.27%	-18.75%
NL	67 Neutral	$360.50M	5.91	15.93%	4.88%	-6.25%	442.27%
Sector *	66 Neutral	$4.52B	12.34	5.41%	3.62%	4.15%	-12.18%
MG	56 Neutral	$242.81M	16.53	7.70%	―	-2.09%	―

Napco Security Technologies Corporate Events

Napco Security Technologies Appoints New CFO Amidst Financial Updates

On May 2, 2025, NAPCO Security Technologies announced the appointment of Andrew Vuono as Chief Financial Officer, effective May 6, 2025, while he continues as Chief Accounting Officer. The company also declared a cash dividend of $0.14 per share, payable on July 3, 2025. In its fiscal 2025 third quarter results, NAPCO reported a 10.8% decrease in net sales to $44 million, but a 10.6% increase in recurring service revenue to $21.6 million. The gross profit margin improved to 57.2%, though diluted EPS fell to $0.28. The company introduced a new cloud-based MVP Access platform at the International Security Conference in April 2025, expected to generate recurring revenue. Despite challenges from tariffs, NAPCO remains confident in its financial strength and competitive positioning due to its manufacturing locations in the Dominican Republic and USA.