Napco Security Technologies (NSSC) AI Stock Analysis

• Market Cap: $1.56B
• Dividend Yield: 1.21%
• Average Volume (3M): 321.11K
• Price to Earnings (P/E): 36.8
• Beta (1Y): 1.49
• Revenue Growth: -3.81%
• EPS Growth: -11.48%
• Country: US
• Employees: 1,070
• Sector: Industrials
• Sector Strength: 72
• Industry: Security & Protection Services
• EPS (TTM): 0.33
• Shares Outstanding: 35,664,326
• 10 Day Avg. Volume: 247,332
• 30 Day Avg. Volume: 321,107
• 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: 0.62
• Enterprise Value/Revenue: 5.33
• Enterprise Value/Gross Profit: 9.58
• Enterprise Value/Ebitda: 19.94
• 1Y Price Target: $44.50
• Price Target Upside: 1.64% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 6

• Rating: 77 Outperform
• Price Target: $50.00 ▲(14.21% Upside)

Napco Security Technologies has a robust financial foundation with strong revenue growth and profitability. The technical indicators suggest positive momentum, although valuation metrics indicate potential overvaluation. The earnings call provided a balanced view with strong recurring revenue growth but highlighted challenges in equipment sales. Overall, the company is well-positioned for future growth, but investors should be mindful of valuation concerns.

Positive Factors

Strong Recurring Revenue

The increase in recurring revenue reflects a stable and growing income stream, enhancing predictability and financial stability, which is crucial for long-term growth.

Cash Flow and Debt Management

Strong cash flow and zero debt position provide financial flexibility, allowing the company to invest in growth opportunities and withstand economic fluctuations.

R&D Investment

Increased R&D spending indicates a commitment to innovation and product development, which can enhance competitive positioning and drive future growth.

Negative Factors

Equipment Sales Decline

Declining equipment sales suggest challenges in product demand or market competition, potentially impacting revenue and profitability if not addressed.

Operating Income Decrease

A decrease in operating income indicates rising costs or declining sales, which could pressure margins and limit reinvestment capacity over time.

Gross Margin Decline in Equipment Revenue

A significant drop in gross margin for equipment revenue highlights cost pressures and efficiency challenges, potentially affecting overall profitability.

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 exhibits strong financial performance with impressive revenue growth, high profitability margins, and efficient cash flow generation. The balance sheet is stable with low leverage and high return on equity, supporting robust financial health.

Income Statement

Napco Security Technologies has demonstrated strong revenue growth with a 21.7% increase in the most recent year, indicating robust demand for its products. The company maintains healthy profitability, with a gross profit margin of 55.6% and a net profit margin of 23.9%, both of which are above industry averages. The EBIT and EBITDA margins are also strong at 25.5% and 26.7%, respectively, showcasing efficient operations and cost management. Overall, the income statement reflects a solid financial performance with consistent growth and profitability.

Balance Sheet

The balance sheet of Napco Security Technologies is characterized by low leverage, with a debt-to-equity ratio of 0.03, indicating a conservative approach to debt management. The return on equity is impressive at 25.7%, reflecting effective use of shareholder funds to generate profits. The equity ratio stands at a healthy level, suggesting a strong capital structure. However, the relatively low total debt may limit financial flexibility for future expansion. Overall, the balance sheet is stable and well-managed, with a focus on maintaining financial health.

Cash Flow

Napco Security Technologies has shown significant improvement in cash flow generation, with a free cash flow growth rate of 118.5% in the latest year. The operating cash flow to net income ratio is 2.23, indicating strong cash generation relative to earnings. The free cash flow to net income ratio is also robust at 0.96, highlighting efficient conversion of profits into cash. This strong cash flow performance supports the company's ability to invest in growth opportunities and return value to shareholders. Overall, the cash flow statement reflects a positive trajectory in cash generation and financial flexibility.

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

Napco Security Technologies Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 43.78
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• 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 Positive. The current price of 43.78 is above the 20-day moving average (MA) of 43.41, above the 50-day MA of 41.50, and above the 200-day MA of 30.79, indicating a bullish trend. The MACD of 0.73 indicates Positive momentum. The RSI at 59.66 is Neutral, neither overbought nor oversold. The STOCH value of 47.43 is Neutral, 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	―	$1.56B	36.80	24.98%	1.21%	-3.81%	-11.48%
ADT	―	$7.14B	13.05	17.13%	2.52%	3.80%	-3.18%
REZI	―	$6.48B	―	-26.27%	―	20.00%	-547.75%
ARLO	―	$1.98B	―	-6.45%	―	-1.75%	68.19%
Sector *	―	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
EVLV	―	$1.32B	―	-71.94%	―	35.63%	-335.37%
KSCP	―	$51.63M	―	-236.56%	―	-6.61%	40.20%

Napco Security Technologies Corporate Events

Napco Security’s Earnings Call: A Mixed Financial Outlook

Napco Security’s recent earnings call painted a mixed picture of the company’s financial health and strategic direction. While the company showcased robust recurring revenue growth and effective cash and inventory management, it faced challenges with declining equipment sales and operating income. Despite these hurdles, Napco demonstrated resilience through strategic investments and shareholder returns, although external factors like tariffs and decreased equipment demand posed significant challenges.

Napco Security’s Compliance Challenges: Navigating the Costs and Risks of Public Company Operations

Napco Security faces significant risks associated with the costs and complexities of operating as a public company, particularly in complying with SEC regulations and other corporate governance requirements. The obligations to file various reports and adhere to the Sarbanes-Oxley Act’s provisions demand substantial resources and may divert management’s focus from revenue-generating activities. Failure to meet these compliance standards could lead to regulatory sanctions, harm the company’s reputation, and negatively impact its financial condition and share price. The increased administrative expenses and potential for non-compliance pose a material threat to Napco Security’s operational and financial stability.

NAPCO Security Technologies Reports Fiscal 2025 Results

NAPCO Security Technologies, Inc. is a prominent manufacturer and designer of high-tech electronic security equipment and wireless communication devices, catering to intrusion and fire alarm systems, and providing school safety solutions. Headquartered in Amityville, New York, the company operates through four divisions and serves a diverse range of applications worldwide.

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.

The most recent analyst rating on (NSSC) stock is a Hold with a $26.00 price target. To see the full list of analyst forecasts on Napco Security Technologies stock, see the NSSC Stock Forecast page.