NAPCO Security Technologies (NASDAQ:NSSC) Announces Earnings Results, Misses Expectations By $0.04 EPS

NAPCO Security Technologies (NASDAQ:NSSC) released its earnings results on Monday. The industrial products company reported $0.34 earnings per share for the quarter, missing analysts’ consensus estimates of $0.38 by ($0.04), Zacks reports. NAPCO Security Technologies had a return on equity of 30.46% and a net margin of 21.60%. The firm had revenue of $49.98 million during the quarter, compared to the consensus estimate of $52.05 million. During the same quarter in the previous year, the firm earned $0.34 EPS. The business’s quarterly revenue was up 1.6% compared to the same quarter last year.

Here are the key takeaways from NAPCO Security Technologies’ conference call:

• Recurring revenue remained the key growth engine: service revenue rose 11.5% to $26.1 million, with gross margins above 90% and an annualized run rate of approximately $106 million, representing 52% of total revenue.
• NAPCO reported record first-quarter net revenue of $50.0 million, net income of $13.0 million, and adjusted EBITDA of $15.5 million; gross margin expanded to 58.7% and the company ended the quarter with $134.6 million in cash and marketable securities and no debt.
• Equipment revenue declined 7.3% to $23.9 million, pressured by prior-year tariff-related backlog and lower purchases from two locking distributors; equipment gross margin fell to 24.3% due to product mix, tariffs, and technical-services costs. Management characterized the weakness as timing-related, citing increased distributor sell-through and expecting full-year equipment margins of 26%–27%.
• Management is investing heavily in future growth, with R&D expense up 25.1% and additional legal costs expected, while advancing OEM radio partnerships, the MVP cloud access-control platform, architecture-and-engineering specifications, Canadian expansion following UL-C approval, and dealer training initiatives.

NAPCO Security Technologies Stock Down 1.0%

Shares of NASDAQ NSSC opened at $31.77 on Wednesday. NAPCO Security Technologies has a 52 week low of $31.00 and a 52 week high of $51.77. The firm’s fifty day moving average is $36.27 and its 200 day moving average is $39.03. The company has a market cap of $1.14 billion, a price-to-earnings ratio of 19.94 and a beta of 1.49.

NAPCO Security Technologies Dividend Announcement

The company also recently announced a quarterly dividend, which will be paid on Monday, January 4th. Stockholders of record on Monday, December 14th will be issued a $0.17 dividend. The ex-dividend date is Monday, December 14th. This represents a $0.68 annualized dividend and a dividend yield of 2.1%. NAPCO Security Technologies’s dividend payout ratio (DPR) is currently 56.20%.

Analyst Upgrades and Downgrades

Several analysts have weighed in on NSSC shares. DA Davidson set a $52.00 price target on shares of NAPCO Security Technologies in a research note on Tuesday, August 25th. Needham & Company LLC reduced their price objective on NAPCO Security Technologies from $49.00 to $43.00 and set a “buy” rating on the stock in a research note on Monday. Benchmark reiterated a “buy” rating on shares of NAPCO Security Technologies in a report on Tuesday, August 25th. Lake Street Capital decreased their price objective on NAPCO Security Technologies from $50.00 to $46.00 and set a “buy” rating on the stock in a report on Tuesday. Finally, Weiss Ratings lowered NAPCO Security Technologies from a “hold (c+)” rating to a “hold (c)” rating in a research note on Tuesday. Five equities research analysts have rated the stock with a Buy rating and two have given a Hold rating to the company. According to data from MarketBeat, NAPCO Security Technologies has an average rating of “Moderate Buy” and a consensus target price of $46.50.

Insiders Place Their Bets

In other NAPCO Security Technologies news, Director Donna Soloway sold 20,962 shares of the firm’s stock in a transaction on Thursday, August 27th. The shares were sold at an average price of $34.62, for a total value of $725,704.44. Following the sale, the director owned 20,962 shares of the company’s stock, valued at $725,704.44. This trade represents a 50.00% decrease in their position. The sale was disclosed in a legal filing with the Securities & Exchange Commission, which is available at the SEC website. Also, Chairman Richard Soloway sold 379,529 shares of the firm’s stock in a transaction on Thursday, August 27th. The stock was sold at an average price of $34.50, for a total transaction of $13,093,750.50. Following the completion of the sale, the chairman directly owned 621,958 shares in the company, valued at approximately $21,457,551. This trade represents a 37.90% decrease in their position. The disclosure for this sale is available in the SEC filing. Insiders have sold a total of 523,962 shares of company stock valued at $18,257,168 over the last quarter. 2.96% of the stock is currently owned by company insiders.

Key Stories Impacting NAPCO Security Technologies

Here are the key news stories impacting NAPCO Security Technologies this week:

• Positive Sentiment: Recurring service revenue rose 11.5%, with margins above 90%, and the recurring-revenue run rate reached about $106 million. The company also reiterated a 26%–27% full-year equipment margin target. Napco recurring revenue growth offsets softer equipment sales
• Positive Sentiment: NAPCO declared a quarterly dividend of $0.17 per share, equivalent to $0.68 annually. NAPCO Security Technologies company information
• Negative Sentiment: Q1 adjusted EPS of $0.34 missed the $0.38 consensus, while revenue of $50.0 million came in below estimates of about $52.0 million. Revenue grew just 1.6% year over year, and equipment sales declined amid a distributor pullback—raising concerns about weaker hardware demand. NAPCO Security Q1 2027 earnings and distributor pullback
• Negative Sentiment: The earnings miss coincided with NSSC breaking below its 200-day moving average, a technical signal that can weigh on investor sentiment. NAPCO stock breaks below 200-day moving average after earnings miss
• Negative Sentiment: Lake Street, TD Cowen, and Needham each lowered their price targets, although all retained Buy ratings. The cuts suggest analysts have tempered expectations following the quarter. TD Cowen analyst recommendations

About NAPCO Security Technologies

NAPCO Security Technologies, Inc develops, manufactures and sells electronic security products and solutions for commercial, institutional, industrial and residential applications. Its offerings include intrusion alarm systems, access control systems, fire alarm products, locking systems and related communications technologies.

The company markets products under brands that include NAPCO, StarLink, Alarm Lock, Continental Instruments and Firewolf. Its solutions are designed to support security dealers, alarm monitoring providers, systems integrators and other professional-channel customers, including applications in schools, healthcare facilities, businesses and government buildings.

Founded in 1969, NAPCO is headquartered in Amityville, New York.