olivlawolivlaw

olivLaw · US equity research

NAPCO Security Technologies, Inc. NSSC

Communications Equipment, NEC · SIC 3669 · Vertical: Communications Equipment, NEC (SIC 3669)

32.11USD−18.41% · 1 dayClose 02 Nov 2026

NAPCO Security Technologies makes electronic security devices, fire and intrusion alarm communicators, recurring cellular services and school safety solutions. Net revenues for fiscal 2026 reached 202.3 million USD, and recurring service revenue with a gross margin above 90 percent makes up a growing share of the business, which could support profitability if the trend continues.

The AI analysis may be outdated: new filings came after its sources (see the «AI analysis» section).

At the close of 02 Nov 2026, NAPCO Security Technologies, Inc. (NSSC) stock was 32.11 USD (−18.41% on the day), with market capitalisation 1.1 bn USD, P/E 26.2 on diluted EPS of 1.23 USD over the last 12 months, dividend yield 1.90%, beta 1.20, 52-week range 32.11–47.23 USD. Latest reported quarter (Q1 2027): revenue of 50.0 m USD (+1.7% YoY), net income of 13.0 m USD (+6.9% YoY), diluted EPS 0.36 USD.

Data as of · AI analysis dated · Source: SEC filings and closing prices, computed by olivLaw.

Market cap
1.1 bn USD
shares as of 30 Oct 2026
P/E (TTM)
26.2
Diluted EPS TTM 1.23 · TTM to 30 Sept 2026
E/P (TTM)
3.82%
TTM to 30 Sept 2026
Dividend yield
1.90%
DPS 12m 0.61
Beta (2y)
1.20
Volatility (1y) 45%
52-week range
32.1147.23

Price history

Loading chart…

Technical reading

RSI (14)
30.4
weak (30–45)
Bollinger (20, 2)
32.93 – 40.99
below the lower band · %B -0.10 · band width 21.8%
SMA 50 / 200
36.39 / 39.11
downtrend (price < SMA50 < SMA200)
MACD (12, 26, 9)
0.37 / 0.53
MACD below signal

Indicators describe past prices; on their own they do not predict direction. On our history the RSI ≤ 40 filter added no return (see the signals methodology).

Performance

CompanyS&P 500vs S&P 500Vertical median
1 month−11.2%−2.3%−8.9 pp—
3 months−15.7%−0.8%−14.9 pp—
6 months−18.9%+4.7%−23.7 pp—
Year to date−23.0%+10.2%−33.2 pp—
1 year−27.3%+10.3%−37.5 pp−40.8%
3 years+70.8%+73.0%−2.3 pp+38.1%
5 years+40.2%+61.8%−21.6 pp—
Max drawdown (1y)
−32.0%
25 Feb 2026 → 02 Nov 2026
Max drawdown (5y)
−65.8%
19 Aug 2024 → 08 Apr 2025
Compound annual growth (5y)
+7.0%
S&P 500 +10.1%

Price returns, dividends excluded.

Quarterly results

Latest quarter: Q1 2027 · 30 Sept 2026

Revenue
50.0 m USD
+1.7% YoY
Net income
13.0 m USD
+6.9% YoY
Diluted EPS
0.36
+5.9% YoY
net / operating
26.0% / 28.2%

Quarterly margins

Quarterly statements · USD

Fiscal yearQ2 '25Q3 '25Q4 '25Q1 '26Q2 '26Q3 '26Q4 '26Q1 '27
Revenue42.9 m44.0 m50.7 m49.2 m48.2 m49.2 m55.8 m50.0 m
Cost of revenue18.4 m18.8 m23.9 m21.3 m19.9 m19.7 m21.6 m20.6 m
Gross profit24.5 m25.1 m26.8 m27.8 m28.2 m29.5 m34.2 m29.4 m
Research & development3.1 m3.2 m3.2 m3.2 m3.5 m3.4 m3.7 m4.1 m
SG&A10.2 m10.8 m11.5 m11.0 m10.0 m11.3 m12.1 m12.2 m
Operating income11.2 m11.1 m12.1 m13.6 m14.8 m-1.2 m18.4 m14.1 m
Depreciation & amortisation506.0 k493.0 k492.0 k496.0 k488.0 k463.0 k464.0 k469.0 k
Pre-tax income12.1 m12.0 m13.0 m14.6 m15.7 m-202.0 k19.7 m15.3 m
Income tax1.6 m1.9 m1.3 m2.5 m2.2 m206.0 k1.9 m2.3 m
Net income10.5 m10.1 m11.6 m12.2 m13.5 m-408.0 k17.8 m13.0 m
Diluted EPS0.280.280.33 ≈0.340.38-0.010.50 ≈0.36
Operating cash flow13.5 m ≈13.4 m ≈14.6 m11.6 m15.1 m ≈16.8 m ≈17.7 m2.8 m
Capex1.1 m ≈65.0 k ≈237.0 k193.0 k585.0 k ≈734.0 k ≈405.0 k433.0 k
Dividends paid—4.6 m ≈4.5 m5.0 m5.0 m ≈5.0 m ≈5.4 m5.4 m
Share repurchases10.7 m ≈18.8 m ≈0—————

≈ derived quarter (cumulative difference / share-days average)

E/P over time

E/P = trailing-12-month diluted EPS / price at quarter end. E/P is the inverse of P/E and stays defined when earnings are negative.

Today's P/E sits at the 45 percentile of its own 40-quarter history (min 12.4, median 29.2, max 71.9; quarters with earnings only).

Fiscal years

Fiscal year20192020202120222023202420252026
Revenue102.9 m101.4 m114.0 m143.6 m170.0 m188.8 m181.6 m202.3 m
Revenue YoY+12.2%−1.5%+12.5%+25.9%+18.4%+11.1%−3.8%+11.4%
Net income12.5 m7.8 m15.4 m19.6 m27.1 m49.8 m43.4 m43.0 m
Net income YoY+63.2%−37.5%+97.7%+27.2%+38.4%+83.6%−12.9%−0.9%
Diluted EPS0.340.210.420.530.731.341.191.20
Diluted EPS YoY−17.1%−38.2%+100.0%+26.2%+37.7%+83.6%−11.2%+0.8%
net %12.1%7.7%13.5%13.6%16.0%26.4%23.9%21.3%
Free cash flow6.7 m8.7 m22.0 m6.9 m21.7 m43.8 m51.4 m59.2 m

Reported results vs expectations

Loading…

Balance sheet & financial health

Fiscal year 2026 · 30 Jun 2026

Cash
126.9 m USD
Financial debt
unavailable USD
Net debt
unavailable USD
Equity
191.0 m USD
Total assets
238.7 m USD
Debt / equity
unavailable
Current ratio
4.90x
ROE
23.9%
ROA
19.7%
FCF margin
29.3%

Financial statements (source on every figure)

Revenue and net income (USD)

Margins

Income statement · USD

Revenue
2024
188.8 m
2025
181.6 m
2026
202.3 m

SEC (XBRL)· 24 Aug 2026verified

Cost of revenue
2024
87.1 m
2025
80.6 m
2026
82.5 m

SEC (XBRL)· 24 Aug 2026verified

Gross profit
2024
101.8 m
2025
101.0 m
2026
119.8 m

SEC (XBRL)· 24 Aug 2026verified

Research & development
2024
10.8 m
2025
12.6 m
2026
13.8 m

SEC (XBRL)· 24 Aug 2026verified

SG&A
2024
37.2 m
2025
42.2 m
2026
44.4 m

SEC (XBRL)· 24 Aug 2026verified

Operating income
2024
53.8 m
2025
46.3 m
2026
45.6 m

SEC (XBRL)· 24 Aug 2026verified

Depreciation & amortisation
2024
1.8 m
2025
2.0 m
2026
1.9 m

SEC (XBRL)· 24 Aug 2026verified

EBITDA
2024
55.6 m ≈
2025
48.2 m ≈
2026
47.5 m ≈

SEC (XBRL)· 24 Aug 2026derived

Pre-tax income
2024
56.4 m
2025
50.1 m
2026
49.8 m

SEC (XBRL)· 24 Aug 2026verified

Income tax
2024
6.6 m
2025
6.7 m
2026
6.8 m

SEC (XBRL)· 24 Aug 2026verified

Net income
2024
49.8 m
2025
43.4 m
2026
43.0 m

SEC (XBRL)· 24 Aug 2026verified

Diluted EPS
2024
1.34
2025
1.19
2026
1.20

SEC (XBRL)· 24 Aug 2026verified

Weighted average diluted shares
2024
37.1 m
2025
36.5 m
2026
35.9 m

SEC (XBRL)· 24 Aug 2026verified

Dividend per share
2024
0.36
2025
0.52
2026
0.58

SEC (XBRL)· 24 Aug 2026verified

Balance sheet · USD

Cash
2024
65.3 m
2025
83.1 m
2026
126.9 m

SEC (XBRL)· 24 Aug 2026verified

Receivables
2024
31.9 m
2025
30.1 m
2026
33.0 m

SEC (XBRL)· 02 Nov 2026verified

Inventories
2024
34.8 m
2025
30.0 m
2026
30.1 m

SEC (XBRL)· 24 Aug 2026verified

Current assets
2024
168.8 m
2025
162.4 m
2026
208.0 m

SEC (XBRL)· 24 Aug 2026verified

Property, plant & equipment, net
2024
9.1 m
2025
9.2 m
2026
9.2 m

SEC (XBRL)· 24 Aug 2026verified

Intangibles (excl. goodwill)
2024
3.6 m
2025
3.3 m
2026
3.0 m

SEC (XBRL)· 24 Aug 2026verified

Total assets
2024
207.8 m
2025
198.1 m
2026
238.7 m

SEC (XBRL)· 24 Aug 2026verified

Accounts payable
2024
8.0 m
2025
5.7 m
2026
6.9 m

SEC (XBRL)· 24 Aug 2026verified

Short-term debt
2024
—
2025
—
2026
—

SEC (XBRL)· 13 Sept 2021verified

Long-term debt
2024
—
2025
—
2026
—

SEC (XBRL)· 13 Sept 2021verified

Current liabilities
2024
22.2 m
2025
24.1 m
2026
42.5 m

SEC (XBRL)· 24 Aug 2026verified

Total liabilities
2024
28.9 m
2025
29.5 m
2026
47.7 m

SEC (XBRL)· 24 Aug 2026verified

Equity
2024
178.9 m †
2025
168.6 m †
2026
191.0 m †

SEC (XBRL)· 24 Aug 2026verified

Cash flow · USD

Operating cash flow
2024
45.4 m
2025
53.5 m
2026
61.1 m

SEC (XBRL)· 24 Aug 2026verified

Capex
2024
1.6 m
2025
2.1 m
2026
1.9 m

SEC (XBRL)· 24 Aug 2026verified

Free cash flow
2024
43.8 m ≈
2025
51.4 m ≈
2026
59.2 m ≈

SEC (XBRL)· 24 Aug 2026derived

Investing cash flow
2024
-3.2 m
2025
14.6 m
2026
3.9 m

SEC (XBRL)· 24 Aug 2026verified

Financing cash flow
2024
-12.8 m
2025
-50.4 m
2026
-21.2 m

SEC (XBRL)· 24 Aug 2026verified

Dividends paid
2024
13.3 m
2025
13.6 m
2026
20.3 m

SEC (XBRL)· 24 Aug 2026verified

Share repurchases
2024
—
2025
36.8 m
2026
—

SEC (XBRL)· 25 Aug 2025verified

Computed indicators

Growth

Revenue growth (YoY)
11.4%
computed by olivLawFY 2026
Revenue CAGR 3Y
6.0%
computed by olivLawFY 2023 → FY 2026
Revenue CAGR 5Y
12.1%
computed by olivLawFY 2021 → FY 2026
EBIT growth (YoY)
-1.3%
computed by olivLawFY 2026
Net income growth (YoY)
-0.9%
computed by olivLawFY 2026
Net income CAGR 3Y
16.6%
computed by olivLawFY 2023 → FY 2026
Net income CAGR 5Y
22.8%
computed by olivLawFY 2021 → FY 2026
EPS growth (YoY)
0.8%
computed by olivLawFY 2026
EPS CAGR 3Y
18.0%
computed by olivLawFY 2023 → FY 2026
EPS CAGR 5Y
23.4%
computed by olivLawFY 2021 → FY 2026
FCF growth (YoY)
15.2%
computed by olivLawFY 2026

Profitability

Gross margin
59.7%
computed by olivLawTTM to 30 Sept 2026
EBITDA margin
23.6%
computed by olivLawTTM to 30 Sept 2026
EBIT margin
22.7%
computed by olivLawTTM to 30 Sept 2026
Net margin
21.6%
computed by olivLawTTM to 30 Sept 2026
FCF margin
24.7%
computed by olivLawTTM to 30 Sept 2026

Returns

ROE
23.4%
computed by olivLawTTM to 30 Sept 2026 · balance sheet at 30 Sept 2026
ROA
20.1%
computed by olivLawTTM to 30 Sept 2026 · balance sheet at 30 Sept 2026
ROIC
unavailable
input data missing
ROCE
22.7%
computed by olivLawTTM to 30 Sept 2026 · balance sheet at 30 Sept 2026
Payout ratio (EPS)
49.8%
computed by olivLawTTM to 30 Sept 2026
Payout ratio (FCF)
41.3%
computed by olivLawTTM to 30 Sept 2026

Balance sheet

Net debt
unavailable
input data missing
Net debt / EBITDA
unavailable
input data missing
Debt / equity
unavailable
input data missing
Interest coverage
unavailable
the reported interest expense is far older than the latest period (the filer changed its XBRL tag): a stale figure is not used

Liquidity

Current ratio
7.2x
computed by olivLawbalance sheet at 30 Sept 2026
Cash ratio
4.4x
computed by olivLawbalance sheet at 30 Sept 2026

Cash

Operating cash flow
52.3 m USD
computed by olivLawTTM to 30 Sept 2026
Capital expenditure
2.2 m USD
computed by olivLawTTM to 30 Sept 2026
Free cash flow
50.1 m USD
computed by olivLawTTM to 30 Sept 2026
FCF conversion
114.2%
computed by olivLawTTM to 30 Sept 2026
Cash conversion
108.9%
computed by olivLawTTM to 30 Sept 2026

Efficiency

Days sales outstanding
54 days
computed by olivLawTTM to 30 Sept 2026 · balance sheet at 30 Sept 2026
Days payables outstanding
30 days
computed by olivLawTTM to 30 Sept 2026 · balance sheet at 30 Sept 2026

Market and valuation

Market capitalisation
1.1 bn USD
computed by olivLawbalance sheet at 30 Sept 2026
Enterprise value
unavailable
input data missing
Market cap / net income TTM
26.2x
computed by olivLawTTM to 30 Sept 2026
P/E (TTM)
26.2x
computed by olivLawTTM to 30 Sept 2026
Earnings yield
3.8%
computed by olivLawTTM to 30 Sept 2026
P/B
5.8x
computed by olivLawbalance sheet at 30 Sept 2026
P/S
5.7x
computed by olivLawTTM to 30 Sept 2026 · balance sheet at 30 Sept 2026
EV/EBITDA
unavailable
input data missing
EV/EBIT
unavailable
input data missing
EV/Sales
unavailable
input data missing
P/FCF
22.9x
computed by olivLawTTM to 30 Sept 2026 · balance sheet at 30 Sept 2026
FCF yield
4.4%
computed by olivLawTTM to 30 Sept 2026 · balance sheet at 30 Sept 2026
Dividend yield
1.9%
computed by olivLawTTM to 30 Sept 2026
Shareholder yield (distributions)
1.8%
computed by olivLawTTM to 30 Sept 2026 · balance sheet at 30 Sept 2026

4 indicators that do not apply to the sector.

Valuation

olivLaw classification

Insufficient data
What is missing
  • valuation methods computed: 0 of at least 1

A scoring methodology on indicators and valuation, not investment advice.

Closing price

32.11 USD

02 Nov 2026Source: olivLaw, closing series

Market cap: 1.1 bn USD

Key indicators

Market capitalisation
1.1 bn USD
computed by olivLawbalance sheet at 30 Sept 2026
P/E (TTM)
26.2x
computed by olivLawTTM to 30 Sept 2026
P/B
5.8x
computed by olivLawbalance sheet at 30 Sept 2026
EV/EBITDA
unavailable
input data missing
ROE
23.4%
computed by olivLawTTM to 30 Sept 2026 · balance sheet at 30 Sept 2026
Net margin
21.6%
computed by olivLawTTM to 30 Sept 2026
Revenue growth (YoY)
11.4%
computed by olivLawFY 2026
Dividend yield
1.9%
computed by olivLawTTM to 30 Sept 2026

Coverage and freshness

34/37 reporting lines present
Latest full fiscal year: 2026
Latest reported period: 30 Sept 2026
Latest balance sheet date: 30 Sept 2026
Share count (cover of the latest filing), as of: 30 Oct 2026
Source: SEC (XBRL)published 02 Nov 2026
verified 2503derived 211

Score by group

77% · Insufficient data

Estimated value range

unavailable — no valuation method could be computed

Valuation assumptions are editorial choices, not measured; beta is not measured.

Valuation methods

  • DCF (discounted cash flow)unavailable · the reported interest expense is far older than the latest period (the filer changed its XBRL tag): a stale figure is not used
  • Peers: EV/Salesunavailable · net debt missing: EV cannot be bridged to equity (missing debt is not zero)
  • Peers: EV/EBITDAunavailable · net debt missing: EV cannot be bridged to equity (missing debt is not zero)

no valuation method could be computed

Multiple comparisons use the SIC vertical: Communications Equipment, NEC (SIC 3669)

Classification (SIC) comparables group by industry code, not by economic activity; the direct group is an editorial selection by activity. Members' multiples are on their own trailing twelve months, at their own latest close.

Assumptions (illustrative, editorial)

Risk-free rate
4.3%
Equity risk premium
5.0%
Beta (default)
1.00
Cost of equity
9.3%
Terminal growth
2.5%

Factor scorecard

Insufficient data

Minimum-evidence gate: valuation methods computed: 0 of at least 1

FactorValueScoreWeight used
Gross margin · Quality59.7%49 (on a fixed band)14%
EBIT margin · Quality22.7%100 (vs peers)11%
FCF margin · Quality24.7%99 (on a fixed band)11%
Revenue CAGR 3Y · Growth6.0%24 (on a fixed band)22%
Revenue growth (YoY) · Growth11.4%64 (vs peers)11%
Net debt / EBITDA · Balance sheetunavailableunavailable—
Current ratio · Balance sheet7.2x100 (on a fixed band)8%
EV/Sales · Valuationunavailableunavailable—
FCF yield · Valuation4.4%87 (on a fixed band)17%
Shareholder yield (distributions) · Returns1.8%63 (on a fixed band)6%

Factors without a value were dropped; the remaining weights were renormalised.

Score groups

  • Balance sheet· partial100/100 · 1/2 factors with a value
  • Growth37/100 · 2/2 factors with a value
  • Quality80/100 · 3/3 factors with a value
  • Returns63/100 · 1/1 factors with a value
  • Valuation· partial87/100 · 1/2 factors with a value

A «partial» group is computed from under half of its weight or from one factor: it is not a full assessment of the group.

Memo

NAPCO SECURITY TECHNOLOGIES, INC (NSSC). Latest full fiscal year: 2026; data up to 2026-09-30.

Figures computed from the financial statements: revenue 202.3 m USD in 2026; YoY growth 11.4%; net margin 21.6%; ROE 23.4%.

Valuation cannot be computed from the available data.

Insufficient data for a verdict (valuation methods computed: 0 of at least 1).

Text generated deterministically from the figures shown; no language model. Not investment advice.

What supports the thesis

  • EBIT margin: 22.7%
  • FCF margin: 24.7%
  • Current ratio: 7.2x
  • FCF yield: 4.4%

What contradicts it

  • Revenue CAGR 3Y: 6.0%

Not assessed (insufficient data or a ratio without meaning): Net debt / EBITDA, EV/Sales.

Versus the vertical median

Communications Equipment, NEC (SIC 3669) · same industry (4-digit SIC) · compared with 11 companies

Multiples and returns vs the median

P/E
26.2x
vertical median 19.9x
above median (+31.6%)
EV/EBITDA
—
vertical median 21.8x
P/S
5.7x
vertical median 1.6x
above median (+244.4%)
P/B
5.8x
vertical median 1.5x
above median (+291.4%)
ROE
23.4%
vertical median -19.4%
above median
Net margin
21.6%
vertical median -33.4%
above median
EBIT margin
22.7%
vertical median -4.3%
above median
Revenue YoY
11.4%
vertical median 4.9%
above median (+132.3%)
Net debt/EBITDA
—
vertical median 3.9x
Dividend yield
1.9%
vertical median —

Price rebased to 100 (monthly, 5 years)

Companies in the vertical

Market capP/EROENet marginRevenue YoY1A / 3A
LITELumentum Holdings Inc.61.4 bn—-240.0%-230.1%+83.2%+110% / +1,499%
ESEEsco Technologies Inc.6.2 bn19.921.4%24.4%+19.2%+13% / +130%
NSSCNapco Security Technologies, Inc1.1 bn26.223.4%21.6%+11.4%−27% / +71%
AIOTPowerfleet, Inc.394.6 m—-4.0%-4.2%+22.4%−41% / +27%
TBCHTurtle Beach Corporation281.7 m—-3.2%-1.1%−14.2%+13% / +39%
AMPGAmplitech Group, Inc.75.1 m—-19.4%-33.4%+165.0%−24% / +57%
INSGInseego Corp.74.4 m23.8—-6.4%−13.1%−59% / +106%
REKRRekor Systems, Inc.46.2 m—-62.8%-43.8%+5.3%−81% / −88%
SNTSenstar Technologies Corporation36.4 m11.18.0%8.8%+1.7%−60% / +38%
KSCPKnightscope, Inc.34.0 m—-201.3%-217.3%+4.9%−91% / −98%
UTSIUTStarcom Holdings Corp.20.2 m—-19.5%-88.5%−17.5%−12% / −39%
MTEKMaris-Tech Ltd.2.7 m—-168.6%-403.3%−77.9%−75% / −69%

1- and 3-year price returns: for NSSC from daily closes (the same as the performance table), for the other companies from month-end closes.

olivLaw engine forecast

The world engine ran after the company's latest material disclosure. Probabilities are of TOUCHING a level within the horizon (not closing there) and sit next to the random walk (p_rw), the no-information benchmark.

The engine has no published run for this company yet.

Valuation scenarios (editable assumptions)

Illustrative scenarios

Illustrative: not forecasts and without probabilities. Each case is one coherent set of assumptions, computed on today's figures.

Bear
Allowed range: -50 … 50%
Allowed range: -100 … 100%
Allowed range: 0 … 100
Allowed range: -10 … 20%
Allowed range: 0 … 100%
Base
Allowed range: -50 … 50%
Allowed range: -100 … 100%
Allowed range: 0 … 100
Allowed range: -10 … 20%
Allowed range: 0 … 100%
Bull
Allowed range: -50 … 50%
Allowed range: -100 … 100%
Allowed range: 0 … 100
Allowed range: -10 … 20%
Allowed range: 0 … 100%
Nothing is saved.

Estimated price (USD)

Estimated priceBearBaseBull
1 years
19.27
Total return -38% · Per year -38%
34.04
Total return 8% · Per year 8%
51.24
Total return 62% · Per year 62%
3 years
19.26
Total return -35% · Per year -14%
38.23
Total return 25% · Per year 8%
63.11
Total return 105% · Per year 27%
5 years
19.25
Total return -32% · Per year -8%
42.93
Total return 45% · Per year 8%
77.72
Total return 157% · Per year 21%
What moves the 3-year price the most
  • Exit P/E± 9.56
  • Net margin± 6.69
  • Annual revenue growth± 5.42
  • Annual dilution± 0.56

AI analysis

AI-generatedAI-generated analysis (Claude) from cited public sources; it may contain errors. Not investment advice. As of 27 Oct 2026 · Model: claude-haiku-5-5.

Possibly outdated: the newest document it read is from 24 Aug 2026; since then the company filed 8-K (02 Nov 2026 · results), 10-Q (02 Nov 2026).

In brief

NAPCO Security Technologies makes electronic security devices, fire and intrusion alarm communicators, recurring cellular services and school safety solutions. Net revenues for fiscal 2026 reached 202.3 million USD, and recurring service revenue with a gross margin above 90 percent makes up a growing share of the business, which could support profitability if the trend continues.

SWOT

Strengths

  • High-margin recurring revenue provides a steady cash flow and reduces dependence on one-time equipment sales.
  • Integrated manufacturing, with a plant in the Dominican Republic and management in the United States, supports lower costs and fast technical support for customers.
  • A broad product range that links alarms, access control and locks on one platform is an advantage over specialised competitors.

Weaknesses

  • Revenue depends on a network of independent distributors and dealers, who may be hurt by a slowdown in construction or by bankruptcies.
  • Quarterly results can fluctuate widely for reasons largely outside the company's control, which makes them hard to predict.
  • Sales for school security are hard to measure because they go through distribution and are not reported separately.

Opportunities

  • Demand for continuous monitoring and mandatory fire systems could grow recurring revenue further.
  • The gradual move away from landlines could widen the customer base for the company's cellular services.
  • Rising school security budgets and healthcare safety needs could open new markets.

Threats

  • Shortages of electronic components driven by AI infrastructure demand could delay deliveries and raise costs.
  • Larger competitors with greater research and financing could launch better products or cut prices.
  • Changes in tariffs and disrupted shipping could affect product costs and delivery times.

Risks

  • Semiconductor supply chainhigh

    Demand from AI data centers could reduce component availability for security makers, bringing longer lead times and higher costs.

  • Intense competitionmedium

    Larger rivals could launch superior products or compete on price, affecting margins.

  • Transport and tariffsmedium

    Shipping disruptions, port strikes or tariff changes could delay deliveries and increase costs.

  • Labour costs in the Dominican Republicmedium

    The plant relies on low labour costs, so wage increases or staff shortages could affect results.

  • Litigationlow

    Outcomes of legal proceedings are uncertain, and a costly settlement such as the one in fiscal 2026 could weigh on profit in a given period.

Investment thesis

What would need to be true (bull case)

  • High-margin recurring revenue could keep growing and support profitability if the customer base expands.
  • Integrated manufacturing and in-house development could help the company stay competitive against larger rivals.
  • The move toward cellular communication and mandatory fire systems could open long-term revenue streams.

What would break the thesis

  • If the component shortage persists, deliveries could slow and margins could decline.
  • Reliance on independent distributors and dealers could make revenue sensitive to construction cycles.
  • If well-resourced competitors invest more, the company could lose market share or pricing power.

What to watch

  • Growth of recurring service revenue against the run rate of above 100 million USDQ1 2027
  • Availability of electronic components and any cost increases2027
  • Effect of tariffs and customs refunds on gross marginnext 10-K
  • Outcome of litigation and any further settlements2027

Products, market & competition

AI-generatedAI-generated analysis (Claude) from cited public sources; it may contain errors. Not investment advice. As of 27 Oct 2026 · Model: claude-haiku-5-5.

Possibly outdated: the newest document it read is from 24 Aug 2026; since then the company filed 8-K (02 Nov 2026 · results), 10-Q (02 Nov 2026).

The business

Founded in 1969 and headquartered in Amityville, New York, the company designs and manufactures security devices such as digital door locks, intrusion and fire alarm systems, control panels, access control systems and video surveillance. Products are sold mainly through independent distributors, dealers and installers, with about 2,200 active customers. The 10-K states that the Dominican Republic plant makes over 90 percent of products, while management and development remain in the United States.

Cellular communication services, for which dealers pay a monthly fee to use the company's communicators and smart devices, have grown steadily and generate a major part of revenue. The company says this recurring stream carries high margins and gives more stable income than equipment sales. According to the source, research and development absorbs roughly 6 to 7 percent of revenue.

Strategy focuses on mandatory systems such as fire systems with central station monitoring in commercial buildings, and on high-margin IoT connectivity. The company is also extending into healthcare security, including anti-ligature locksets, and offers integrated locking and access control for schools. Sales of school security equipment are hard to quantify because they go through distribution.

Segments

Recurring communication services

Recurring service revenue rose 13 percent in fiscal 2026 to 97.5 million USD, with a gross margin of 90.3 percent. The company estimates an annual run rate of about 103 million USD based on July 2026 revenue, and this segment represents about 48 percent of total revenue.

Security equipment

Equipment sales, including door locks, alarms and access systems, grew 10 percent in fiscal 2026. The increase came mainly from door-locking products and intrusion systems, and in the fourth quarter intrusion product sales rose sharply, largely on StarLink fire communicators.

Market context

The electronic security market is described in the company's results as multi-billion dollar and rapidly expanding. The source notes that education security has passed 3 billion USD in revenue while many schools have not yet addressed the issue. The shift from copper landlines to cellular service favors cellular alarm communication.

Demand in commercial and residential buildings depends on construction activity and economic conditions, which the company lists as risks. In a downturn, the pool of independent distributors and installers could shrink, which would directly affect sales.

Trends

  • Strong demand for AI componentsheadwind

    The buildout of AI infrastructure and data centers has increased demand for semiconductors, and suppliers may allocate capacity to larger customers. The company says it could face longer lead times and higher costs, which would pressure margins if it cannot pass costs on.

  • Phase-out of copper landlinestailwind

    As copper landlines are phased out, customers move to cellular service, making the company's cellular services more attractive in new and existing installations. This supports growth in recurring revenue.

  • Tariffs and customs refundsmixed

    US courts invalidated certain IEEPA tariffs and the company has received or accrued some refunds. Replacement tariffs and possible further changes remain uncertain, so the effect on margins could vary from period to period.

  • School security and healthcare demandtailwind

    Rising school security budgets and interest in safety solutions for hospitals and institutions could open new opportunities. Sales through distribution make it difficult to measure these revenues precisely.

Competitive position

The company says it faces about 12 competitors that make security equipment for distributors and dealers. Most have far greater financial resources, but the company argues that none makes all key building security products, including alarms, access control, connectivity and locking devices.

Competition is based on features, quality, price, technical support and the ability to deliver on time. The company says its integrated manufacturing and US-based technical support are an advantage, while larger rivals with faster innovation or price pressure could affect its margins.

  • Unnamed security equipment manufacturers

    The source cites about 12 competitors with larger financial resources, without naming them.

  • Manufacturers selling to distributors and central stations

    Companies selling to distributors, dealers, central stations and OEMs, not named in the source.

  • Cellular communication providers for alarms

    Providers of similar cellular alarm services could compete for the same customers.

  • Larger firms with bigger R and D budgets

    Rivals that invest more in research and development could bring new products to market sooner.

News & filings

In the press

The latest news item in our archive is from 01 Sept 2026; the newest SEC filing is from 02 Nov 2026. The press archive comes from the RSS feeds we follow and does not necessarily cover the latest event — the filings alongside do.

SEC filings

Sources

  1. [1] Form 10-K, fiscal year ended 2026-06-30 · SEC / NAPCO Security Technologies, Inc. · 24 Aug 2026
  2. [2] Form 8-K, results release (exhibit 99.1) · SEC / NAPCO Security Technologies, Inc. · 24 Aug 2026

Figures computed by olivLaw from SEC filings and closing prices; the qualitative analysis is AI-generated from cited sources. Not investment advice.

NAPCO Security Technologies, Inc. (NSSC): stock, results, valuation and forecast · olivLaw