Napco Security Technologies (NSSC) AI Stock Analysis

• Market Cap: $1.37B
• Dividend Yield: 1.3%
• Average Volume (3M): 359.71K
• Price to Earnings (P/E): 32.4
• Beta (1Y): 1.51
• Revenue Growth: -3.81%
• EPS Growth: -11.48%
• Country: US
• Employees: 1,070
• Sector: Industrials
• Sector Strength: 73
• Industry: Security & Protection Services
• EPS (TTM): 0.33
• Shares Outstanding: 35,656,420
• 10 Day Avg. Volume: 575,591
• 30 Day Avg. Volume: 359,707
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 0.71
• Enterprise Value/Revenue: 5.34
• Enterprise Value/Gross Profit: 9.48
• Enterprise Value/Ebitda: 19.44
• 1Y Price Target: $38.29
• Price Target Upside: -2.45% Downside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 7

• Rating: 73 Outperform
• Price Target: $43.00 ▲(9.55% Upside)

Napco Security Technologies demonstrates strong financial health and growth potential, supported by efficient operations and strategic initiatives. However, high valuation metrics and overbought technical indicators suggest caution. The earnings call provided a balanced view with both strengths and challenges, contributing to a solid but cautious overall score.

Positive Factors

Earnings

NSSC closed out F25 with an encouraging showing, delivering better-than-expected FQ4 revenues, adj. EBITDA and EPS.

Margin Expansion

Service transformation is driving margin expansion, with consolidated gross margin increasing every year since the introduction of service revenue.

Market Position

NAPCO is a leading player across security markets with offerings in Locking, Alarms, and Access Control.

Negative Factors

Inventory Levels

The third distributor chose to reduce inventory levels across the board due to macro uncertainty.

Macro Concerns

Key distributors and dealers remain vigilant against a potential macro-driven slowdown, which affects the stock sentiment.

Operating Fundamentals

Near-term operating fundamentals deteriorated throughout the first quarter, with intensifying macro pressures suggesting further deterioration.

Napco Security Technologies Business Overview & Revenue Model

Company Description

Napco Security Technologies (NSSC) is a leading provider of security technology solutions, specializing in the design, manufacturing, and marketing of advanced security and communication systems. The company operates primarily within the security sector, offering a wide range of products including intrusion alarm systems, access control systems, video surveillance solutions, and fire alarm systems, catering to both residential and commercial markets.

How the Company Makes Money

NSSC generates revenue through a multi-faceted business model that includes the sale of security hardware, software solutions, and related services. Key revenue streams comprise the direct sale of their security products, installation services, and ongoing maintenance contracts. Additionally, the company benefits from recurring revenue through monitoring services provided to customers. Significant partnerships with distributors, integrators, and technology providers enhance its market reach and contribute to its earnings, allowing NSSC to leverage additional sales channels and expand its customer base.

Napco Security Technologies Financial Statement Overview

Summary

Napco Security Technologies demonstrates strong financial health 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 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	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	181.23M	181.62M	188.82M	170.00M	143.59M	114.03M
Gross Profit	102.08M	101.03M	101.75M	73.23M	59.16M	50.15M
EBITDA	49.81M	48.53M	55.98M	32.26M	20.00M	19.63M
Net Income	45.31M	43.41M	49.82M	27.13M	19.60M	15.41M
Balance Sheet
Total Assets	190.86M	198.14M	207.75M	166.65M	148.58M	123.29M
Cash, Cash Equivalents and Short-Term Investments	89.30M	99.18M	97.72M	66.75M	46.80M	40.22M
Total Debt	5.38M	5.33M	5.51M	5.69M	7.07M	10.99M
Total Liabilities	29.32M	29.54M	28.86M	26.48M	34.78M	30.06M
Stockholders Equity	161.55M	168.61M	178.89M	140.17M	113.79M	93.24M
Cash Flow
Free Cash Flow	50.81M	51.41M	43.77M	21.74M	6.85M	21.98M
Operating Cash Flow	53.24M	53.53M	45.37M	24.70M	8.33M	22.99M
Investing Cash Flow	14.25M	14.59M	-3.15M	-28.26M	-1.56M	-6.43M
Financing Cash Flow	-49.59M	-50.37M	-12.83M	-2.21M	155.00K	0.00

Napco Security Technologies Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 39.25
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• 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 39.25 is above the 20-day moving average (MA) of 33.56, above the 50-day MA of 31.61, and above the 200-day MA of 29.65, indicating a bullish trend. The MACD of 2.37 indicates Negative momentum. The RSI at 76.06 is Negative, neither overbought nor oversold. The STOCH value of 97.09 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	73 Outperform	$1.37B	32.37	24.98%	1.30%	-3.81%	-11.48%
CIX	73 Outperform	$296.99M	15.99	11.62%	12.91%	-2.96%	-11.81%
NL	72 Outperform	$322.01M	6.01	13.89%	8.43%	-2.97%	141.19%
SNT	70 Neutral	$104.62M	65.29	-3.47%	―	―	―
ARLO	65 Neutral	$1.87B	―	-6.45%	―	-1.75%	68.19%
Sector *	64 Neutral	$10.73B	15.65	7.58%	2.01%	2.80%	-14.92%
MG	61 Neutral	$301.50M	26.16	5.63%	―	-4.51%	―

Napco Security Technologies Corporate Events

Napco Security Declares Dividend Amid Mixed Q4 Results

On August 21, 2025, NAPCO Security Technologies’ Board of Directors declared a cash dividend of $0.14 per share, payable on October 3, 2025. The company reported its fiscal Q4 and full-year 2025 results, highlighting a 1% increase in Q4 net sales to $50.7 million, though full-year sales decreased by 4% to $181.6 million. Recurring service revenue saw significant growth, increasing 10% in Q4 and 14% annually, with a high gross margin of 91%. Equipment sales faced challenges, declining 5% in Q4 and 16% annually, but showed a sequential increase from Q3 to Q4. The company introduced a new cloud-based MVP Access platform, expected to generate future revenue. Despite challenges, NAPCO maintained strong cash flow and reduced inventory levels, supporting its dividend program and stock repurchase efforts.