NAPCO Security Technologies (NASDAQ:NSSC) Announces Earnings Results, Misses Expectations By $0.04 EPS

NAPCO Security Technologies (NASDAQ:NSSC) issued its earnings results on Monday. The industrial products company reported $0.34 EPS for the quarter, missing analysts’ consensus estimates of $0.38 by ($0.04), Zacks reports. NAPCO Security Technologies had a net margin of 21.27% and a return on equity of 31.41%. The firm had revenue of $49.98 million during the quarter, compared to analysts’ expectations of $52.05 million. During the same quarter in the prior year, the company earned $0.34 EPS. NAPCO Security Technologies’s quarterly revenue was up 1.6% on a year-over-year basis.

Here are the key takeaways from NAPCO Security Technologies’ conference call:

• Recurring revenue remained the key growth engine: service revenue rose 11.5% to $26.1 million, with gross margins above 90% and an annualized run rate of approximately $106 million, representing 52% of total revenue.
• NAPCO reported record first-quarter net revenue of $50.0 million, net income of $13.0 million, and adjusted EBITDA of $15.5 million; gross margin expanded to 58.7% and the company ended the quarter with $134.6 million in cash and marketable securities and no debt.
• Equipment revenue declined 7.3% to $23.9 million, pressured by prior-year tariff-related backlog and lower purchases from two locking distributors; equipment gross margin fell to 24.3% due to product mix, tariffs, and technical-services costs. Management characterized the weakness as timing-related, citing increased distributor sell-through and expecting full-year equipment margins of 26%–27%.
• Management is investing heavily in future growth, with R&D expense up 25.1% and additional legal costs expected, while advancing OEM radio partnerships, the MVP cloud access-control platform, architecture-and-engineering specifications, Canadian expansion following UL-C approval, and dealer training initiatives.

NAPCO Security Technologies Stock Down 18.4%

Shares of NAPCO Security Technologies stock opened at $32.10 on Tuesday. NAPCO Security Technologies has a twelve month low of $31.00 and a twelve month high of $51.77. The business has a 50-day moving average price of $36.39 and a 200 day moving average price of $39.07. The firm has a market cap of $1.15 billion, a PE ratio of 26.53 and a beta of 1.51.

NAPCO Security Technologies Announces Dividend

The firm also recently announced a quarterly dividend, which will be paid on Monday, January 4th. Stockholders of record on Monday, December 14th will be given a dividend of $0.17 per share. The ex-dividend date is Monday, December 14th. This represents a $0.68 dividend on an annualized basis and a dividend yield of 2.1%. NAPCO Security Technologies’s dividend payout ratio (DPR) is 56.20%.

Insider Transactions at NAPCO Security Technologies

In other NAPCO Security Technologies news, Chairman Richard Soloway sold 379,529 shares of the stock in a transaction that occurred on Thursday, August 27th. The stock was sold at an average price of $34.50, for a total transaction of $13,093,750.50. Following the transaction, the chairman owned 621,958 shares in the company, valued at approximately $21,457,551. This represents a 37.90% decrease in their ownership of the stock. The sale was disclosed in a document filed with the SEC, which can be accessed through this hyperlink. Also, Director Donna Soloway sold 28,000 shares of the firm’s stock in a transaction that occurred on Wednesday, August 26th. The shares were sold at an average price of $35.98, for a total value of $1,007,440.00. Following the completion of the sale, the director directly owned 20,962 shares in the company, valued at approximately $754,212.76. The trade was a 57.19% decrease in their ownership of the stock. The disclosure for this sale is available in the SEC filing. Insiders sold a total of 523,962 shares of company stock valued at $18,257,168 in the last ninety days. 2.96% of the stock is currently owned by insiders.

Key Stories Impacting NAPCO Security Technologies

Here are the key news stories impacting NAPCO Security Technologies this week:

• Positive Sentiment: Recurring service revenue increased 11.5% year over year, with margins above 90%, helping support gross margins and bringing the recurring-revenue run rate to approximately $106 million. Management is targeting full-year equipment gross margins of 26%–27%. Napco Recurring Revenue Growth Offsets Softer Equipment Sales in Fiscal Q1
• Positive Sentiment: NAPCO declared a quarterly dividend of $0.17 per share, equivalent to $0.68 annually and a reported 2.1% yield, providing an income component for shareholders. NAPCO Security Technologies dividend information
• Neutral Sentiment: Revenue reached a quarterly record of approximately $50.0 million and grew 1.6% year over year, but the increase was largely driven by recurring services rather than hardware sales. NAPCO Security Technologies Reports Fiscal Q1 2027 Results
• Negative Sentiment: Adjusted EPS was $0.34, below the $0.38 analyst consensus and roughly flat from the prior-year quarter. Revenue of $49.98 million also missed expectations of approximately $52.0 million. NAPCO Earnings Flash
• Negative Sentiment: Equipment sales declined 7.3%, reportedly reflecting a distributor pullback and ending a six-quarter growth streak. Excluding a litigation-related credit, operating income fell about 4%, indicating that underlying profitability was weaker than the headline margin performance suggests. NAPCO Security Q1 2027 Earnings Analysis

Analysts Set New Price Targets

A number of equities analysts have issued reports on NSSC shares. DA Davidson set a $52.00 price target on shares of NAPCO Security Technologies in a research report on Tuesday, August 25th. Weiss Ratings raised shares of NAPCO Security Technologies from a “hold (c)” rating to a “hold (c+)” rating in a report on Thursday, October 8th. Needham & Company LLC reiterated a “buy” rating and issued a $49.00 price objective on shares of NAPCO Security Technologies in a research note on Friday, August 21st. Finally, Benchmark reissued a “buy” rating on shares of NAPCO Security Technologies in a report on Tuesday, August 25th. Four investment analysts have rated the stock with a Buy rating and two have issued a Hold rating to the company’s stock. According to MarketBeat.com, the company has a consensus rating of “Moderate Buy” and an average target price of $51.33.

About NAPCO Security Technologies

NAPCO Security Technologies, Inc develops, manufactures and sells electronic security products and solutions for commercial, institutional, industrial and residential applications. Its offerings include intrusion alarm systems, access control systems, fire alarm products, locking systems and related communications technologies.

The company markets products under brands that include NAPCO, StarLink, Alarm Lock, Continental Instruments and Firewolf. Its solutions are designed to support security dealers, alarm monitoring providers, systems integrators and other professional-channel customers, including applications in schools, healthcare facilities, businesses and government buildings.

Founded in 1969, NAPCO is headquartered in Amityville, New York.