NSSC Stock Forecast & Price Target

NAPCO Security Technologies Inc. reported a solid financial performance in its latest quarter, with a notable 93% year-over-year increase in radio sales and a commendable gross margin of 57.0%, significantly exceeding estimates. The company's recurring service gross margins reached a record 91.3%, reflecting an upward trend driven by a favorable product mix, particularly in high-margin fire radio recurring revenue. Additionally, the ongoing strength in the school security market, spurred by heightened federal and state funding, positions NAPCO for continued revenue growth and potential re-valuation of its shares.

NAPCO Security Technologies Inc. experienced a significant decline in revenue during its FQ2'25, with equipment revenues dropping 25% year-over-year to $21.7 million, largely driven by a 32% decrease in its Intrusion & Access Alarm Products. The company's door locking hardware segment also faced challenges, reporting a 20% year-over-year decline to $14.2 million, impacted by tough comparisons from large projects that did not recur. Consequently, the forecast for fiscal year 2025 has been revised downward, with revenue estimates reduced from $199.7 million to $177.3 million, indicating a 6% decline, alongside a decrease in the earnings per share estimate from $1.36 to $1.12.