NSSC Stock Forecast & Price Target

NAPCO Security Technologies Inc. has demonstrated significant growth, with FQ1 radio sales surging 93% year-over-year and a robust gross margin of 57.0%, exceeding expectations. The company's recurring service gross margins reached a record 91.3%, reflecting a favorable product mix and contributing to the overall financial health of the business. Furthermore, the ongoing strength in the school security market, supported by increased funding for improvements, positions NAPCO for enhanced revenue growth and potential re-valuation of its stock.

NAPCO Security Technologies Inc. experienced a significant decline in equipment revenue, which fell 25% year-over-year to $21.7 million, primarily driven by a 32% drop in Intrusion & Access Alarm Products. The company reported a 20% year-over-year decrease in door locking hardware revenue, totaling $14.2 million, which was notably below prior estimates due to challenging comparisons with large projects from the previous year. Additionally, management revised expectations for fiscal year 2025, reducing revenue estimates to $177.3 million, a 6% decline from previous forecasts, while EBITDA also contracted by 19% year-over-year, signaling ongoing challenges in sales performance and profitability.