Napco Security Technologies (NasdaqGS:NSSC) - Share price, News & Analysis

NSSC fundamental analysis
Snowflake Score
Valuation	1/6
Future Growth	4/6
Past Performance	5/6
Financial Health	6/6
Dividends	0/6

NSSC Stock Overview

Napco Security Technologies, Inc. develops, manufactures, and sells electronic security products in the United States and internationally.

Rewards

Trading at 17.6% below our estimate of its fair value

Earnings are forecast to grow 33.26% per year

Earnings grew by 167.3% over the past year

Risk Analysis

Large one-off items impacting financial results

Price History & Performance

Summary of all time highs, changes and price drops for Napco Security Technologies
Historical stock prices
Current Share Price	US$21.26
52 Week High	US$26.00
52 Week Low	US$12.64
Beta	1.26
1 Month Change	-12.22%
3 Month Change	-7.28%
1 Year Change	45.87%
3 Year Change	180.11%
5 Year Change	362.17%
Change since IPO	4,492.17%

Recent News & Updates

Jan 10

Investors Will Want Napco Security Technologies' (NASDAQ:NSSC) Growth In ROCE To Persist

To find a multi-bagger stock, what are the underlying trends we should look for in a business? Typically, we'll want to...

Shareholder Returns

	NSSC	US Electronic	US Market
7D	-5.7%	-5.1%	-4.6%
1Y	45.9%	3.7%	7.7%

Return vs Industry: NSSC exceeded the US Electronic industry which returned 5.8% over the past year.

Return vs Market: NSSC exceeded the US Market which returned 10.2% over the past year.

Price Volatility

Is NSSC's price volatile compared to industry and market?
NSSC volatility
NSSC Average Weekly Movement	5.0%
Electronic Industry Average Movement	7.7%
Market Average Movement	6.6%
10% most volatile stocks in US Market	15.7%
10% least volatile stocks in US Market	2.4%

Stable Share Price: NSSC is not significantly more volatile than the rest of US stocks over the past 3 months, typically moving +/- 5% a week.

Volatility Over Time: NSSC's weekly volatility (5%) has been stable over the past year.

About the Company

Founded	Employees	CEO	Website
1969	1,102	Richard Soloway	https://www.napcosecurity.com

Napco Security Technologies, Inc. develops, manufactures, and sells electronic security products in the United States and internationally. The company offers access control systems, door-locking products, intrusion and fire alarm systems, and video surveillance systems for commercial, residential, institutional, industrial, and governmental applications. Its access control systems include various types of identification readers, control panels, PC-based computers, and electronically activated door-locking devices; and door locking devices comprise microprocessor-based electronic door locks with push button, card readers and bio-metric operation, door alarms, mechanical door locks, and simple dead bolt locks.

Napco Security Technologies Fundamentals Summary

How do Napco Security Technologies's earnings and revenue compare to its market cap?
NSSC fundamental statistics
Market Cap	US$780.50m
Earnings (TTM)	US$20.33m
Revenue (TTM)	US$121.91m

38.4x

P/E Ratio

6.4x

P/S Ratio

Is NSSC overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
NSSC income statement (TTM)
Revenue	US$121.91m
Cost of Revenue	US$69.00m
Gross Profit	US$52.92m
Expenses	US$32.58m
Earnings	US$20.33m

Last Reported Earnings

Sep 30, 2021

Next Earnings Date

n/a

Earnings per share (EPS)	0.55
Gross Margin	43.40%
Net Profit Margin	16.68%
Debt/Equity Ratio	0%

How did NSSC perform over the long term?

See historical performance and comparison

Valuation

Is Napco Security Technologies undervalued compared to its fair value and its price relative to the market?

17.6%

Undervalued compared to fair value

Share Price vs. Fair Value

Below Fair Value: NSSC ($21.26) is trading below our estimate of fair value ($25.81)

Significantly Below Fair Value: NSSC is trading below fair value, but not by a significant amount.

Price To Earnings Ratio

PE vs Industry: NSSC is poor value based on its PE Ratio (38.4x) compared to the US Electronic industry average (17.5x).

PE vs Market: NSSC is poor value based on its PE Ratio (38.4x) compared to the US market (17x).

Price to Earnings Growth Ratio

PEG Ratio: NSSC is poor value based on its PEG Ratio (1.2x)

Price to Book Ratio

PB vs Industry: NSSC is overvalued based on its PB Ratio (7.7x) compared to the US Electronic industry average (2.3x).

Future Growth

How is Napco Security Technologies forecast to perform in the next 1 to 3 years based on estimates from 6 analysts?

33.3%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: NSSC's forecast earnings growth (33.3% per year) is above the savings rate (2%).

Earnings vs Market: NSSC's earnings (33.3% per year) are forecast to grow faster than the US market (13% per year).

High Growth Earnings: earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: NSSC's revenue (15.5% per year) is forecast to grow faster than the US market (9.2% per year).

High Growth Revenue: NSSC's revenue (15.5% per year) is forecast to grow slower than 20% per year.

Earnings per Share Growth Forecasts

Future Return on Equity

Future ROE: Insufficient data to determine if NSSC's Return on Equity is forecast to be high in 3 years time

Past Performance

How has Napco Security Technologies performed over the past 5 years?

18.4%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: NSSC has a large one-off gain of $3.9M impacting its September 30 2021 financial results.

Growing Profit Margin: NSSC's current net profit margins (16.7%) are higher than last year (7.7%).

Past Earnings Growth Analysis

Earnings Trend: NSSC's earnings have grown by 18.4% per year over the past 5 years.

Accelerating Growth: NSSC's earnings growth over the past year (167.3%) exceeds its 5-year average (18.4% per year).

Earnings vs Industry: NSSC earnings growth over the past year (167.3%) exceeded the Electronic industry 42.1%.

Return on Equity

High ROE: NSSC's Return on Equity (20.1%) is considered high.

Financial Health

How is Napco Security Technologies's financial position?

Financial Position Analysis

Short Term Liabilities: NSSC's short term assets ($97.5M) exceed its short term liabilities ($15.7M).

Long Term Liabilities: NSSC's short term assets ($97.5M) exceed its long term liabilities ($8.4M).

Debt to Equity History and Analysis

Debt Level: NSSC is debt free.

Reducing Debt: NSSC has no debt compared to 5 years ago when its debt to equity ratio was 7.5%.

Debt Coverage: NSSC has no debt, therefore it does not need to be covered by operating cash flow.

Interest Coverage: NSSC has no debt, therefore coverage of interest payments is not a concern.

Balance Sheet

Dividend

What is Napco Security Technologies's current dividend yield, its reliability and sustainability?

Dividend Yield vs Market

Notable Dividend: Unable to evaluate NSSC's dividend yield against the bottom 25% of dividend payers, as the company has not reported any recent payouts.

High Dividend: Unable to evaluate NSSC's dividend yield against the top 25% of dividend payers, as the company has not reported any recent payouts.

Stability and Growth of Payments

Stable Dividend: Insufficient data to determine if NSSC's dividends per share have been stable in the past.

Growing Dividend: Insufficient data to determine if NSSC's dividend payments have been increasing.

Current Payout to Shareholders

Dividend Coverage: Insufficient data to calculate payout ratio to determine if its dividend payments are covered by earnings.

Future Payout to Shareholders

Future Dividend Coverage: No need to calculate the sustainability of NSSC's dividend in 3 years as they are not forecast to pay a notable one for the US market.

Next Steps

Explore strong dividend paying companies in the Tech industry.

Management

How experienced are the management team and are they aligned to shareholders interests?

22.2yrs

Average management tenure

CEO

Richard Soloway (75 yo)

47yrs

Tenure

US$1,289,947

Compensation

Mr. Richard L. Soloway is Founder, has been the Chief Executive Officer and President of Napco Security Technologies, Inc. (formerly Napco Security Systems Inc.) since 1998 and has been its Secretary since...

CEO Compensation Analysis

Compensation vs Market: Richard's total compensation ($USD1.29M) is below average for companies of similar size in the US market ($USD2.39M).

Compensation vs Earnings: Richard's compensation has been consistent with company performance over the past year.

Leadership Team

Experienced Management: NSSC's management team is seasoned and experienced (22.2 years average tenure).

Board Members

Experienced Board: NSSC's board of directors are seasoned and experienced ( 21 years average tenure).

Ownership

Who are the major shareholders and have insiders been buying or selling?

Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.

Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.

Data	Last Updated (UTC time)
Company Analysis	2022/01/19 23:34
End of Day Share Price	2022/01/19 00:00
Earnings	2021/09/30
Annual Earnings	2021/06/30