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NAPCO SECURITY TECHNOLOGIES (NSSC) Stock Fundamental Analysis

NASDAQ:NSSC - Nasdaq - US6304021057 - Common Stock - Currency: USD

24.23  -0.33 (-1.34%)

Fundamental Rating

8

We assign a fundamental rating of 8 out of 10 to NSSC. NSSC was compared to 124 industry peers in the Electronic Equipment, Instruments & Components industry. Both the health and profitability get an excellent rating, making NSSC a very profitable company, without any liquidiy or solvency issues. NSSC has a correct valuation and a medium growth rate. This makes NSSC very considerable for quality investing!


Dividend Valuation Growth Profitability Health

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10

1. Profitability

1.1 Basic Checks

NSSC had positive earnings in the past year.
NSSC had a positive operating cash flow in the past year.
Each year in the past 5 years NSSC has been profitable.
Each year in the past 5 years NSSC had a positive operating cash flow.
NSSC Yearly Net Income VS EBIT VS OCF VS FCFNSSC Yearly Net Income VS EBIT VS OCF VS FCFYearly Net Income VS EBIT VS OCF VS FCF 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 10M 20M 30M 40M 50M

1.2 Ratios

Looking at the Return On Assets, with a value of 23.87%, NSSC belongs to the top of the industry, outperforming 97.50% of the companies in the same industry.
NSSC's Return On Equity of 27.77% is amongst the best of the industry. NSSC outperforms 95.00% of its industry peers.
With an excellent Return On Invested Capital value of 24.94%, NSSC belongs to the best of the industry, outperforming 98.33% of the companies in the same industry.
NSSC had an Average Return On Invested Capital over the past 3 years of 18.84%. This is significantly above the industry average of 8.76%.
The last Return On Invested Capital (24.94%) for NSSC is above the 3 year average (18.84%), which is a sign of increasing profitability.
Industry RankSector Rank
ROA 23.87%
ROE 27.77%
ROIC 24.94%
ROA(3y)17.81%
ROA(5y)14.67%
ROE(3y)21.47%
ROE(5y)18.22%
ROIC(3y)18.84%
ROIC(5y)16.75%
NSSC Yearly ROA, ROE, ROICNSSC Yearly ROA, ROE, ROICYearly ROA, ROE, ROIC 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 5 10 15 20 25

1.3 Margins

With an excellent Profit Margin value of 25.94%, NSSC belongs to the best of the industry, outperforming 96.67% of the companies in the same industry.
In the last couple of years the Profit Margin of NSSC has grown nicely.
NSSC's Operating Margin of 27.60% is amongst the best of the industry. NSSC outperforms 100.00% of its industry peers.
NSSC's Operating Margin has improved in the last couple of years.
NSSC has a Gross Margin of 55.45%. This is amongst the best in the industry. NSSC outperforms 94.17% of its industry peers.
NSSC's Gross Margin has improved in the last couple of years.
Industry RankSector Rank
OM 27.6%
PM (TTM) 25.94%
GM 55.45%
OM growth 3Y21.99%
OM growth 5Y16.27%
PM growth 3Y25%
PM growth 5Y16.78%
GM growth 3Y6.61%
GM growth 5Y4.64%
NSSC Yearly Profit, Operating, Gross MarginsNSSC Yearly Profit, Operating, Gross MarginsYearly Profit, Operating, Gross Margins 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 10 20 30 40 50

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9

2. Health

2.1 Basic Checks

With a Return on Invested Capital (ROIC) well above the Cost of Capital (WACC), NSSC is creating value.
The number of shares outstanding for NSSC has been increased compared to 1 year ago.
NSSC has less shares outstanding than it did 5 years ago.
NSSC has no outstanding debt. Therefor its Debt/Equity and Debt/FCF ratios are 0 and belong to the best of the industry.
NSSC Yearly Shares OutstandingNSSC Yearly Shares OutstandingYearly Shares Outstanding 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 10M 20M 30M
NSSC Yearly Total Debt VS Total AssetsNSSC Yearly Total Debt VS Total AssetsYearly Total Debt VS Total Assets 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 50M 100M 150M 200M

2.2 Solvency

NSSC has an Altman-Z score of 22.74. This indicates that NSSC is financially healthy and has little risk of bankruptcy at the moment.
The Altman-Z score of NSSC (22.74) is better than 96.67% 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.
Industry RankSector Rank
Debt/Equity 0
Debt/FCF 0
Altman-Z 22.74
ROIC/WACC2.79
WACC8.93%
NSSC Yearly LT Debt VS Equity VS FCFNSSC Yearly LT Debt VS Equity VS FCFYearly LT Debt VS Equity VS FCF 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 50M 100M 150M

2.3 Liquidity

NSSC has a Current Ratio of 7.55. This indicates that NSSC is financially healthy and has no problem in meeting its short term obligations.
Looking at the Current ratio, with a value of 7.55, NSSC belongs to the top of the industry, outperforming 90.00% of the companies in the same industry.
A Quick Ratio of 5.83 indicates that NSSC has no problem at all paying its short term obligations.
Looking at the Quick ratio, with a value of 5.83, NSSC belongs to the top of the industry, outperforming 89.17% of the companies in the same industry.
Industry RankSector Rank
Current Ratio 7.55
Quick Ratio 5.83
NSSC Yearly Current Assets VS Current LiabilitesNSSC Yearly Current Assets VS Current LiabilitesYearly Current Assets VS Current Liabilites 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 50M 100M 150M

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6

3. Growth

3.1 Past

NSSC shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 9.24%, which is quite good.
The Earnings Per Share has been growing by 31.95% on average over the past years. This is a very strong growth
NSSC shows a small growth in Revenue. In the last year, the Revenue has grown by 5.14%.
NSSC shows quite a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 12.91% yearly.
EPS 1Y (TTM)9.24%
EPS 3Y49.01%
EPS 5Y31.95%
EPS Q2Q%-17.65%
Revenue 1Y (TTM)5.14%
Revenue growth 3Y18.32%
Revenue growth 5Y12.91%
Sales Q2Q%-9.7%

3.2 Future

Based on estimates for the next years, NSSC will show a small growth in Earnings Per Share. The EPS will grow by 4.72% on average per year.
NSSC is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 14.49% yearly.
EPS Next Y-7.7%
EPS Next 2Y4.72%
EPS Next 3YN/A
EPS Next 5YN/A
Revenue Next Year-2.89%
Revenue Next 2Y3.66%
Revenue Next 3Y14.95%
Revenue Next 5Y14.49%

3.3 Evolution

The EPS growth rate is decreasing: in the next years the growth will be less than in the last years.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is stable.
NSSC Yearly Revenue VS EstimatesNSSC Yearly Revenue VS EstimatesYearly Revenue VS Estimates 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 100M 200M 300M
NSSC Yearly EPS VS EstimatesNSSC Yearly EPS VS EstimatesYearly EPS VS Estimates 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 0.5 1

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5

4. Valuation

4.1 Price/Earnings Ratio

Based on the Price/Earnings ratio of 18.64, the valuation of NSSC can be described as rather expensive.
Based on the Price/Earnings ratio, NSSC is valued a bit cheaper than 77.50% of the companies in the same industry.
Compared to an average S&P500 Price/Earnings ratio of 29.98, NSSC is valued a bit cheaper.
Based on the Price/Forward Earnings ratio of 16.49, the valuation of NSSC can be described as correct.
Based on the Price/Forward Earnings ratio, NSSC is valued a bit cheaper than 78.33% of the companies in the same industry.
NSSC's Price/Forward Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 22.66.
Industry RankSector Rank
PE 18.64
Fwd PE 16.49
NSSC Price Earnings VS Forward Price EarningsNSSC Price Earnings VS Forward Price Earnings ChartPrice Earnings - Forward Price Earnings PE FPE 5 10 15 20 25

4.2 Price Multiples

Based on the Enterprise Value to EBITDA ratio, NSSC is valued a bit cheaper than 67.50% of the companies in the same industry.
Based on the Price/Free Cash Flow ratio, NSSC is valued a bit cheaper than the industry average as 76.67% of the companies are valued more expensively.
Industry RankSector Rank
P/FCF 17.83
EV/EBITDA 14.51
NSSC Per share dataNSSC EPS, Sales, OCF, FCF, BookValue per sharePer Share Data Per Share 1 2 3 4 5

4.3 Compensation for Growth

The excellent profitability rating of NSSC may justify a higher PE ratio.
PEG (NY)N/A
PEG (5Y)0.58
EPS Next 2Y4.72%
EPS Next 3YN/A

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4

5. Dividend

5.1 Amount

NSSC has a Yearly Dividend Yield of 2.06%. Purely for dividend investing, there may be better candidates out there.
In the last 3 months the price of NSSC has falen by -37.39%. A price decline artificially increases the dividend yield. It may be a sign investors do not expect the dividend to last.
Compared to an average industry Dividend Yield of 1.98, NSSC pays a better dividend. On top of this NSSC pays more dividend than 94.17% of the companies listed in the same industry.
Compared to an average S&P500 Dividend Yield of 2.30, NSSC has a dividend comparable with the average S&P500 company.
Industry RankSector Rank
Dividend Yield 2.06%

5.2 History

NSSC has been paying a dividend for less than 5 years, so it still needs to build a track record.
Dividend Growth(5Y)N/A
Div Incr Years1
Div Non Decr Years1
NSSC Yearly Dividends per shareNSSC Yearly Dividends per shareYearly Dividends per share 2023 2024 2025 0.1 0.2 0.3 0.4

5.3 Sustainability

24.77% of the earnings are spent on dividend by NSSC. This is a low number and sustainable payout ratio.
DP24.77%
EPS Next 2Y4.72%
EPS Next 3YN/A
NSSC Yearly Income VS Free CF VS DividendNSSC Yearly Income VS Free CF VS DividendYearly Income VS Free CF VS Dividend 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 10M 20M 30M 40M
NSSC Dividend Payout.NSSC Dividend Payout, showing the Payout Ratio.NSSC Dividend Payout.PayoutRetained Earnings

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NAPCO SECURITY TECHNOLOGIES

NASDAQ:NSSC (3/3/2025, 1:49:35 PM)

24.23

-0.33 (-1.34%)

Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupTechnology Hardware & Equipment
GICS IndustryElectronic Equipment, Instruments & Components
Earnings (Last)02-03 2025-02-03/bmo
Earnings (Next)05-05 2025-05-05/amc
Inst Owners95.36%
Inst Owner Change0.95%
Ins Owners4.35%
Ins Owner Change0.01%
Market Cap881.97M
Analysts81.82
Price Target32.03 (32.19%)
Short Float %8.02%
Short Ratio5.43
Dividend
Industry RankSector Rank
Dividend Yield 2.06%
Yearly Dividend0.36
Dividend Growth(5Y)N/A
DP24.77%
Div Incr Years1
Div Non Decr Years1
Ex-Date03-12 2025-03-12 (0.125)
Surprises & Revisions
EPS beat(2)0
Avg EPS beat(2)-16.8%
Min EPS beat(2)-18.45%
Max EPS beat(2)-15.16%
EPS beat(4)1
Avg EPS beat(4)-6.58%
Min EPS beat(4)-18.45%
Max EPS beat(4)7.41%
EPS beat(8)5
Avg EPS beat(8)10.58%
EPS beat(12)9
Avg EPS beat(12)21.52%
EPS beat(16)11
Avg EPS beat(16)13.35%
Revenue beat(2)0
Avg Revenue beat(2)-12.63%
Min Revenue beat(2)-15.65%
Max Revenue beat(2)-9.61%
Revenue beat(4)0
Avg Revenue beat(4)-6.96%
Min Revenue beat(4)-15.65%
Max Revenue beat(4)-0.72%
Revenue beat(8)2
Avg Revenue beat(8)-3.13%
Revenue beat(12)6
Avg Revenue beat(12)-0.32%
Revenue beat(16)9
Avg Revenue beat(16)1.22%
PT rev (1m)-33.19%
PT rev (3m)-29.44%
EPS NQ rev (1m)-22.74%
EPS NQ rev (3m)-22.96%
EPS NY rev (1m)-14.79%
EPS NY rev (3m)-14.86%
Revenue NQ rev (1m)-14.57%
Revenue NQ rev (3m)-14.52%
Revenue NY rev (1m)-9.66%
Revenue NY rev (3m)-9.79%
Valuation
Industry RankSector Rank
PE 18.64
Fwd PE 16.49
P/S 4.73
P/FCF 17.83
P/OCF 16.9
P/B 5.06
P/tB 5.16
EV/EBITDA 14.51
EPS(TTM)1.3
EY5.37%
EPS(NY)1.47
Fwd EY6.06%
FCF(TTM)1.36
FCFY5.61%
OCF(TTM)1.43
OCFY5.92%
SpS5.12
BVpS4.79
TBVpS4.69
PEG (NY)N/A
PEG (5Y)0.58
Profitability
Industry RankSector Rank
ROA 23.87%
ROE 27.77%
ROCE 28.47%
ROIC 24.94%
ROICexc 55.23%
ROICexgc 57.66%
OM 27.6%
PM (TTM) 25.94%
GM 55.45%
FCFM 26.52%
ROA(3y)17.81%
ROA(5y)14.67%
ROE(3y)21.47%
ROE(5y)18.22%
ROIC(3y)18.84%
ROIC(5y)16.75%
ROICexc(3y)32.83%
ROICexc(5y)27.74%
ROICexgc(3y)34.34%
ROICexgc(5y)29.3%
ROCE(3y)21.51%
ROCE(5y)19.12%
ROICexcg growth 3Y18.76%
ROICexcg growth 5Y16.34%
ROICexc growth 3Y20.53%
ROICexc growth 5Y18.36%
OM growth 3Y21.99%
OM growth 5Y16.27%
PM growth 3Y25%
PM growth 5Y16.78%
GM growth 3Y6.61%
GM growth 5Y4.64%
F-Score8
Asset Turnover0.92
Health
Industry RankSector Rank
Debt/Equity 0
Debt/FCF 0
Debt/EBITDA 0
Cap/Depr 123.46%
Cap/Sales 1.46%
Interest Coverage 2059.4
Cash Conversion 97.22%
Profit Quality 102.26%
Current Ratio 7.55
Quick Ratio 5.83
Altman-Z 22.74
F-Score8
WACC8.93%
ROIC/WACC2.79
Cap/Depr(3y)103.56%
Cap/Depr(5y)95.62%
Cap/Sales(3y)1.21%
Cap/Sales(5y)1.22%
Profit Quality(3y)67.68%
Profit Quality(5y)91.44%
High Growth Momentum
Growth
EPS 1Y (TTM)9.24%
EPS 3Y49.01%
EPS 5Y31.95%
EPS Q2Q%-17.65%
EPS Next Y-7.7%
EPS Next 2Y4.72%
EPS Next 3YN/A
EPS Next 5YN/A
Revenue 1Y (TTM)5.14%
Revenue growth 3Y18.32%
Revenue growth 5Y12.91%
Sales Q2Q%-9.7%
Revenue Next Year-2.89%
Revenue Next 2Y3.66%
Revenue Next 3Y14.95%
Revenue Next 5Y14.49%
EBIT growth 1Y7.9%
EBIT growth 3Y44.33%
EBIT growth 5Y31.28%
EBIT Next Year3.71%
EBIT Next 3Y30.05%
EBIT Next 5Y27.1%
FCF growth 1Y54870%
FCF growth 3Y25.81%
FCF growth 5Y45.73%
OCF growth 1Y3122.16%
OCF growth 3Y25.43%
OCF growth 5Y39.3%