Napco Security Technologies, Inc. Just Missed EPS By 10.0%: Here's What Analysts Think Will Happen Next

As you might know, Napco Security Technologies, Inc. (NASDAQ:NSSC) last week released its latest quarterly, and things did not turn out so great for shareholders. Results look to have been somewhat negative - revenue fell 5.5% short of analyst estimates at US$44m, and statutory earnings of US$0.30 per share missed forecasts by 10.0%. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

See our latest analysis for Napco Security Technologies

Following the latest results, Napco Security Technologies' six analysts are now forecasting revenues of US$203.1m in 2025. This would be a credible 6.2% improvement in revenue compared to the last 12 months. Per-share earnings are expected to rise 3.5% to US$1.43. In the lead-up to this report, the analysts had been modelling revenues of US$211.4m and earnings per share (EPS) of US$1.57 in 2025. The analysts are less bullish than they were before these results, given the reduced revenue forecasts and the small dip in earnings per share expectations.

It'll come as no surprise then, to learn that the analysts have cut their price target 18% to US$44.50. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. Currently, the most bullish analyst values Napco Security Technologies at US$52.00 per share, while the most bearish prices it at US$32.00. This shows there is still a bit of diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Napco Security Technologies' past performance and to peers in the same industry. We would highlight that Napco Security Technologies' revenue growth is expected to slow, with the forecast 8.4% annualised growth rate until the end of 2025 being well below the historical 15% p.a. growth over the last five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 7.3% annually. Factoring in the forecast slowdown in growth, it looks like Napco Security Technologies is forecast to grow at about the same rate as the wider industry.

The Bottom Line

The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. They also downgraded their revenue estimates, although as we saw earlier, forecast growth is only expected to be about the same as the wider industry. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.

With that in mind, we wouldn't be too quick to come to a conclusion on Napco Security Technologies. Long-term earnings power is much more important than next year's profits. We have forecasts for Napco Security Technologies going out to 2026, and you can see them free on our platform here.

We also provide an overview of the Napco Security Technologies Board and CEO remuneration and length of tenure at the company, and whether insiders have been buying the stock, here.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.