One-glance verdict
Within fair range
$45.64 our estimate vs market $36.13
Wall Street consensus: $50.67 (11.0% higher than our fair-value estimate)
21% below our estimate
Fundamentals snapshot
Napco Security Technologies, Inc.
NSSC · NMS · Industrials · Security & Protection Services
Current price
$36.13
52-week range
$33.91 - $51.77
Market cap
$1.29B
Balance sheet
Healthy
217.80x Strong cushion
Net cash $132.39M. Interest coverage shows how many times profit covers the interest bill.
What stands out
3 Rewards
0 Risks
3 rewards · 0 risks
- Reward Revenue grew 11.4% last year.
- Reward Returns 23.9% on equity, ahead of 66% of its peers.
- Reward Free cash flow was positive in 10/10 years.
What this company does
Napco Security Technologies, Inc.
Napco Security Technologies makes and sells electronic security systems, such as alarms and high-tech door locks, for all kinds of buildings from schools to businesses. A growing and important part of their business comes from recurring revenue (predictable, subscription-like fees for alarm monitoring), which provides a steady stream of income that is more stable than one-time equipment sales. This makes the company's performance easier to predict over time.
How the company got here
Founded in 1969, Napco started as a manufacturer of electronic security systems like alarms. Over the years, it grew by acquiring other companies, expanding into electronic door locks, access control systems (which determine who can enter a building or room), and architectural door hardware. A major turning point was the development of its StarLink cellular communicators, which send alarm signals over a wireless network. This shifted the company from just selling hardware one time to also earning a steady, predictable income from monthly communication services, a model investors often refer to as recurring revenue.
What it actually does
Napco makes a wide range of products designed to keep buildings safe, from schools and hospitals to businesses and homes. Think of it as providing everything from the electronic lock on a door and the keypad to enter a building, to the fire alarm system and the burglar alarm that alerts the authorities. They don't sell directly to you, but rather to professional installers, dealers, and locksmiths who then set up these systems for their customers. A key part of their business is also the communication service that allows these security devices to send signals and alerts.
Equipment Sales
This is the traditional part of Napco's business, involving the one-time sale of physical security products. This includes a wide variety of items like burglar and fire alarm systems, electronic door locks, and access control systems that use keypads or card readers. These products are sold under several brand names, including NAPCO, Alarm Lock, Continental Access, and Marks USA. While this segment involves a single purchase, it's crucial because many of these hardware sales lead to future service revenue. This part of the business makes up about half of the company's total sales.
Recurring Service Revenue
This is a fast-growing and very profitable part of Napco's business. When a security installer puts a Napco alarm system in a building, it often includes a StarLink cellular radio that needs to communicate with a central monitoring station. Napco charges a monthly fee for this communication service, similar to how a cell phone company charges for a data plan. This creates a steady and predictable stream of income, known as recurring revenue, which now accounts for roughly half of the company's total sales and is a major focus for growth.
What management is betting on now
Management's main focus is to continue growing its high-profit recurring service revenue. The strategy is to sell more hardware, especially their StarLink communicators for fire and intrusion alarms, which in turn creates more monthly subscribers for their communication services. They are also focused on integrated systems, where their different products (like door locks and alarms) work together seamlessly, often managed through cloud-based software. This push towards connected, subscription-based services is intended to make the company's earnings more stable and less dependent on one-time hardware sales.
Price history
How the share price has moved
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Earnings history
Last 8 quarters — what happened
Click any quarter to read the call summary and what the numbers say.
FY2025 Q1
$11.35M
FY2025 Q2
$12.37M
FY2025 Q3
$13.31M
FY2025 Q4
$14.39M
FY2026 Q1
$11.44M
FY2026 Q2
$14.51M
FY2026 Q3
$16.02M
FY2026 Q4
$17.25M
Revenue
$55.81M
Net income
$17.77M
Diluted EPS
0.49
Operating cash flow
$17.65M
Free cash flow
$17.25M
Fetching…
Sources
Revenue
$49.17M
Net income
$-408.00K
Diluted EPS
-0.01
Operating cash flow
$16.76M
Free cash flow
$16.02M
Fetching…
Sources
Revenue
$48.17M
Net income
$13.50M
Diluted EPS
0.38
Operating cash flow
$15.10M
Free cash flow
$14.51M
Fetching…
Sources
Revenue
$49.17M
Net income
$12.16M
Diluted EPS
0.34
Operating cash flow
$11.64M
Free cash flow
$11.44M
Fetching…
Sources
Revenue
$50.72M
Net income
$11.63M
Diluted EPS
0.33
Operating cash flow
$14.62M
Free cash flow
$14.39M
Fetching…
Sources
Revenue
$43.96M
Net income
$10.12M
Diluted EPS
0.28
Operating cash flow
$13.38M
Free cash flow
$13.31M
Fetching…
Sources
Revenue
$42.93M
Net income
$10.47M
Diluted EPS
0.28
Operating cash flow
$13.50M
Free cash flow
$12.37M
Fetching…
Sources
Revenue
$44.00M
Net income
$11.19M
Diluted EPS
0.30
Operating cash flow
$12.03M
Free cash flow
$11.35M
Fetching…
Sources
Is it cheap or expensive?
Fair value $45.64 vs current price $36.13
Wall Street consensus is the average analyst price target: $50.67 (11.0% higher than our fair-value estimate).
Our most-likely fair value is $45.64 a share — about 26.3% away from today's price of $36.13, so the stock currently looks fairly priced.
Is it drowning in debt?
Healthy
Net cash $132.4M - more cash than debt. Interest coverage 217.8x.
Net debt
$-132.39M
Interest coverage
217.80x
Napco Security Technologies, Inc.'s profit covers its interest bill about 217.8 times over. which is stronger than every peer shown here.
Healthy
Worse cushion
Baseline
Better cushion
NSSC
BASELINE
Napco Security Technologies, Inc.
Total debt $5.18M Interest coverage 217.80x This is the baseline the peer rows are being compared against.
Total debt $567.47M Interest coverage 7.73x -96% vs NSSC Carries about 28.2x less debt cushion than NSSC.
Total debt $3.90B Interest coverage 4.75x -98% vs NSSC Carries about 45.9x less debt cushion than NSSC.
Total debt $7.78B Interest coverage 2.85x -99% vs NSSC Carries about 76.4x less debt cushion than NSSC.
Total debt $5.72M Interest coverage 1.11x -99% vs NSSC Carries about 195.6x less debt cushion than NSSC.
Total debt $2.22B Interest coverage 8.51x -96% vs NSSC Carries about 25.6x less debt cushion than NSSC.
What you should know
The case for and against NSSC
3 Rewards
0 Risks
Rewards
-
Revenue grew 11.4% last year.
-
Returns 23.9% on equity, ahead of 66% of its peers.
-
Free cash flow was positive in 10/10 years.
Risks
The numbers
All the key metrics, grouped by purpose
Tap any ? icon to learn what it means.
Valuation
How expensive the stock looks
P/E (TTM)
30.11x
Forward P/E
20.02x
P/B
6.77x
P/S
6.39x
EV/EBITDA
18.30x
PEG ratio
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Profitability
How much profit each dollar creates
Gross margin
59.0%
Operating margin
32.2%
Net margin
21.3%
ROE
23.9%
ROA
17.5%
Health
Liquidity and balance-sheet strength
Debt / equity
0.03x
Current ratio
4.90x
Quick ratio
4.09x
Total debt
$5.18M
Total cash
$137.56M
Growth
How the business has been compounding
Revenue TTM
$202.32M
Revenue 5Y CAGR
8.9%
EPS TTM
1.20
EPS 5Y CAGR
30.9%
Cash flow
How much cash the business throws off
Operating CF TTM
$61.15M
Free CF TTM
$59.23M
FCF margin
29.3%
Dividend
Shareholder payout
Yield
1.7%
Payout ratio
48.3%
Last ex-div date
2026-09-11