Don't overlook NASDAQ:NSSC—a stock with solid growth prospects and a reasonable valuation.

Last update: Nov 6, 2024

NAPCO SECURITY TECHNOLOGIES (NASDAQ:NSSC) has caught the eye of our stock screener as an affordable growth stock. NASDAQ:NSSC is displaying robust growth metrics and also excels in terms of profitability, solvency, and liquidity. Additionally, it appears to be reasonably priced. Let's delve into the details.

Evaluating Growth: NASDAQ:NSSC

ChartMill employs its own Growth Rating system for all stocks. This score, ranging from 0 to 10, is derived by evaluating different growth factors, such as EPS and revenue growth, taking into account both past performance and future projections. NASDAQ:NSSC has earned a 8 for growth:

NSSC shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 25.93%, which is quite impressive.
The Earnings Per Share has been growing by 31.95% on average over the past years. This is a very strong growth
Looking at the last year, NSSC shows a quite strong growth in Revenue. The Revenue has grown by 11.07% in the last year.
The Revenue has been growing by 12.91% on average over the past years. This is quite good.
NSSC is expected to show a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 23.60% yearly.
Based on estimates for the next years, NSSC will show a quite strong growth in Revenue. The Revenue will grow by 14.49% on average per year.

Analyzing Valuation Metrics

ChartMill assigns a Valuation Rating to every stock. This score ranges from 0 to 10 and evaluates the different valuation aspects and compares the price to earnings and cash flows, while taking into account profitability and growth. NASDAQ:NSSC scores a 5 out of 10:

Compared to the rest of the industry, the Price/Earnings ratio of NSSC indicates a somewhat cheap valuation: NSSC is cheaper than 67.74% of the companies listed in the same industry.
75.81% of the companies in the same industry are more expensive than NSSC, based on the Price/Forward Earnings ratio.
Compared to an average S&P500 Price/Forward Earnings ratio of 23.57, NSSC is valued a bit cheaper.
Based on the Enterprise Value to EBITDA ratio, NSSC is valued a bit cheaper than 61.29% of the companies in the same industry.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of NSSC indicates a somewhat cheap valuation: NSSC is cheaper than 62.10% of the companies listed in the same industry.
The excellent profitability rating of NSSC may justify a higher PE ratio.
A more expensive valuation may be justified as NSSC's earnings are expected to grow with 23.60% in the coming years.

What does the Health looks like for NASDAQ:NSSC

To gauge a stock's financial health, ChartMill utilizes a Health Rating on a scale of 0 to 10. This comprehensive evaluation encompasses liquidity and solvency, both in absolute terms and in comparison to industry peers. NASDAQ:NSSC has earned a 9 out of 10:

NSSC has an Altman-Z score of 31.17. This indicates that NSSC is financially healthy and has little risk of bankruptcy at the moment.
The Altman-Z score of NSSC (31.17) is better than 98.39% of its industry peers.
There is no outstanding debt for NSSC. This means it has a Debt/Equity and Debt/FCF ratio of 0 and it is amongst the best of the sector and industry.
NSSC has a Current Ratio of 7.59. This indicates that NSSC is financially healthy and has no problem in meeting its short term obligations.
NSSC's Current ratio of 7.59 is amongst the best of the industry. NSSC outperforms 91.13% of its industry peers.
A Quick Ratio of 6.03 indicates that NSSC has no problem at all paying its short term obligations.
NSSC's Quick ratio of 6.03 is amongst the best of the industry. NSSC outperforms 91.13% of its industry peers.

What does the Profitability looks like for NASDAQ:NSSC

ChartMill employs its own Profitability Rating system for stock evaluation. This score, ranging from 0 to 10, is derived from an analysis of diverse profitability metrics and margins. In the case of NASDAQ:NSSC, the assigned 10 is noteworthy for profitability:

Looking at the Return On Assets, with a value of 23.98%, NSSC belongs to the top of the industry, outperforming 99.19% of the companies in the same industry.
With an excellent Return On Equity value of 27.85%, NSSC belongs to the best of the industry, outperforming 95.97% of the companies in the same industry.
The Return On Invested Capital of NSSC (25.42%) is better than 99.19% of its industry peers.
NSSC had an Average Return On Invested Capital over the past 3 years of 18.84%. This is significantly above the industry average of 8.80%.
The 3 year average ROIC (18.84%) for NSSC is below the current ROIC(25.42%), indicating increased profibility in the last year.
NSSC has a Profit Margin of 26.38%. This is amongst the best in the industry. NSSC outperforms 98.39% of its industry peers.
In the last couple of years the Profit Margin of NSSC has grown nicely.
Looking at the Operating Margin, with a value of 28.50%, NSSC belongs to the top of the industry, outperforming 100.00% of the companies in the same industry.
NSSC's Operating Margin has improved in the last couple of years.
With an excellent Gross Margin value of 53.89%, NSSC belongs to the best of the industry, outperforming 91.94% of the companies in the same industry.
NSSC's Gross Margin has improved in the last couple of years.

Every day, new Affordable Growth stocks can be found on ChartMill in our Affordable Growth screener.

Our latest full fundamental report of NSSC contains the most current fundamental analsysis.

Keep in mind

This is not investing advice! The article highlights some of the observations at the time of writing, but you should always make your own analysis and invest based on your own insights.