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Napco Security Technologies
(NASDAQ:NSSC)
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Rating:76Outperform
Price Target:
$42.00
▲(15.29% Upside)
Action:Reiterated
Date:08/25/26
The score is driven primarily by high-quality financial performance (strong profitability, robust free cash flow, and a very conservative balance sheet) and a positive earnings call focused on durable, high-margin recurring revenue growth. These strengths are tempered by mixed technicals (price below longer-term moving averages) and a somewhat elevated valuation (P/E ~31), which reduce near-term risk-adjusted attractiveness.
Positive Factors
High-margin recurring revenue
Recurring communication revenue provides a durable, high-margin base that improves earnings visibility and reduces reliance on hardware cycles. StarLink adoption and the large building-conversion opportunity could support continued subscription growth.
Negative Factors
Legal settlement reduced profitability
The settlement demonstrates that litigation can materially affect reported profitability even when operating performance is strong. Although the charge may be nonrecurring, related legal exposure remains a risk to earnings quality and capital allocation.
Read all positive and negative factors
Positive Factors
Negative Factors
High-margin recurring revenue
Recurring communication revenue provides a durable, high-margin base that improves earnings visibility and reduces reliance on hardware cycles. StarLink adoption and the large building-conversion opportunity could support continued subscription growth.
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
$1.30B
Dividend Yield1.62%
Average Volume (3M)424.23K
Price to Earnings (P/E)29.5
Beta (1Y)1.47
Revenue Growth11.39%
EPS Growth0.75%
CountryUS
Employees1,061
SectorIndustrials
Sector Strength72
IndustrySecurity & Protection Services
Share Statistics
EPS (TTM)1.21
Shares Outstanding35,768,436
10 Day Avg. Volume258,081
30 Day Avg. Volume424,227
Financial Highlights & Ratios
PEG Ratio37.67
Price to Book (P/B)7.10
Price to Sales (P/S)6.70
P/FCF Ratio22.89
Enterprise Value/Market Cap<0.01
Enterprise Value/Revenue<0.01
Enterprise Value/Gross Profit<0.01
Enterprise Value/Ebitda<0.01
Forecast
1Y Price Target
$51.50Price Target Upside41.37% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering4
EPS Forecast (FY)1.63
Revenue Forecast (FY)$218.27M
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 primarily makes money by selling security hardware and related solutions through professional distribution channels (e.g., security equipment distributors, dealers, and integrators) who then install and service systems for end users. A key co...
Napco Security Technologies Earnings Call Summary
Earnings Call Date:Aug 24, 2026
(Q4-2026)
| % Change Since: |
Next Earnings Date:Nov 09, 2026
Earnings Call Sentiment Positive
The call emphasized multiple record financial metrics — revenue, recurring revenue run rate, margin expansion, adjusted EBITDA, free cash flow, strong cash balance and no debt — and showcased product momentum (notably StarLink radios) and strategic investments (MVP, R&D). Offsetting items included a material $16M legal settlement that reduced full-year operating income, tariff-related volatility (including one-time refund benefits), supply chain and component cost pressures, and softness in access control sales. On balance, the positive operating performance, durable high-margin recurring revenue, cash generation and clean balance sheet substantially outweigh the headwinds and one-time impacts.Positive Updates
Record Revenue and Quarterly Growth
Q4 net sales reached a record $55.8M, up 10% year-over-year; full fiscal 26 revenue was a record $202.0M, up 11.4% year-over-year and surpassing the $200M milestone.
Negative Updates
Legal Settlement Impacted Full-Year Operating Income
Full-year operating income declined 1.3% to $45.6M, driven by a $16M legal settlement announced in fiscal Q3 which materially reduced FY operating income despite strong quarterly performance.
Read all updates
Q4-2026 Updates
Positive
Negative
Record Revenue and Quarterly Growth
Q4 net sales reached a record $55.8M, up 10% year-over-year; full fiscal 26 revenue was a record $202.0M, up 11.4% year-over-year and surpassing the $200M milestone.
Read all positive updates
Company Guidance
Management's forward guidance emphasized continued recurring‑revenue momentum with an estimated annualized recurring revenue run rate of approximately $103 million (July basis) — building on Q4 recurring services of $25.3M and FY26 recurring revenue of $97.5M — and management expects MVP (next‑gen cloud access control) to begin producing meaningful recurring revenue by the back end of calendar 2026 (Oct–Nov), with FY27 run‑rate gains likely back‑end weighted due to an approximate six‑month lag from StarLink radio hardware sales to activations; they pointed to radio unit sales up 40% year‑over‑year (nearly 30% sequentially) as a leading indicator, reiterated a >2 million building market conversion opportunity through the end of the decade, signaled continued investment (R&D +10% to $13.8M, including $4.1M UL costs), committed to margin and capital discipline (targeting adjusted EBITDA expansion above 40% while FY26 adjusted EBITDA was $66.7M, 33% margin and Q4 adjusted EBITDA was $20.6M, 36.8% margin), and noted strong financial optionality (cash $138M, no debt) plus a raised quarterly dividend to $0.17/share (+13.3%).Napco Security Technologies Financial Statement Overview
Summary
Income Statement
86
Very Positive
Balance Sheet
90
Very Positive
Cash Flow
88
Very Positive
| Breakdown | Jun 2026 | Jun 2025 | Jun 2024 | Jun 2023 | Jun 2022 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 202.32M | 181.62M | 188.82M | 170.00M | 143.59M |
| Gross Profit | 119.79M | 101.03M | 101.75M | 73.23M | 59.16M |
| EBITDA | 49.82M | 52.34M | 58.55M | 33.16M | 23.90M |
| Net Income | 43.03M | 43.41M | 49.82M | 27.13M | 19.60M |
Balance Sheet | |||||
| Total Assets | 238.67M | 198.14M | 198.14M | 207.75M | 166.65M |
| Cash, Cash Equivalents and Short-Term Investments | 137.56M | 99.18M | 99.18M | 97.72M | 66.75M |
| Total Debt | 5.18M | 5.33M | 5.33M | 5.51M | 5.69M |
| Total Liabilities | 47.67M | 29.54M | 29.54M | 28.86M | 26.48M |
| Stockholders Equity | 191.00M | 168.61M | 168.61M | 178.89M | 140.17M |
Cash Flow | |||||
| Free Cash Flow | 59.23M | 51.41M | 43.77M | 21.74M | 6.85M |
| Operating Cash Flow | 61.15M | 53.53M | 45.37M | 24.70M | 8.33M |
| Investing Cash Flow | 3.95M | 14.59M | -3.15M | -28.26M | -1.56M |
| Financing Cash Flow | -21.25M | -50.37M | -12.83M | -2.21M | 155.00K |
Napco Security Technologies Technical Analysis
Negative
36.43
Price Trends
37.49
Negative
38.77
Negative
40.04
Negative
Market Momentum
-0.19
Positive
35.27
Neutral
4.94
Positive
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 36.43 is below the 20-day moving average (MA) of 38.44, below the 50-day MA of 37.49, and below the 200-day MA of 40.04, indicating a bearish trend. The MACD of -0.19 indicates Positive momentum. The RSI at 35.27 is Neutral, neither overbought nor oversold. The STOCH value of 4.94 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative 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 |
|---|---|---|---|---|---|---|---|
78 Outperform | $1.43B | 45.32 | 21.25% | ― | 15.65% | ― | |
76 Outperform | $1.30B | 29.53 | 23.59% | 1.62% | 11.39% | 0.75% | |
72 Outperform | $5.43B | 9.66 | 16.83% | 3.13% | 2.10% | 6.68% | |
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% | |
57 Neutral | $956.35M | -200.00 | -4.53% | ― | 41.67% | 94.89% | |
54 Neutral | $3.03B | 8.21 | 14.70% | ― | 3.42% | ― | |
46 Neutral | $33.07M | -0.40 | -152.20% | ― | 88.02% | 63.33% |
* Industrials Sector Average
NSSC
Napco Security Technologies
35.28
-2.51
-6.63%
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EVLV
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5.32
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KSCP
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1.41
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-76.18%
Napco Security Technologies Corporate Events
DividendsFinancial Disclosures
Napco Security Technologies Posts Record Q4 and Yearly Results
Positive
Aug 24, 2026
Napco Security Technologies, Inc., based in Amityville, N.Y., operates in the electronic security and school safety industry, designing and manufacturing high‑tech security equipment and wireless communication devices for intrusion and fire ...
Business Operations and StrategyExecutive/Board ChangesRegulatory Filings and Compliance
Napco Security Technologies Announces CEO Leadership Transition
Positive
Jul 8, 2026
On July 8, 2026, NAPCO Security Technologies announced an executive leadership transition in which founder Richard Soloway moved from Chairman and Chief Executive Officer to Founder and Executive Chairman, while longtime executive Kevin Buchel, pr...
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.