- Napco Security Technologies, Inc. (NASDAQ: NSSC) reported earnings per share (EPS) of $0.28, meeting estimated EPS, with revenue of approximately $43.96 million, surpassing estimates.
- The company faces a class action lawsuit for alleged securities law violations, impacting investor confidence.
- NSSC’s financial metrics show a conservative debt approach and strong liquidity, with a notable increase in its quarterly dividend.
Napco Security Technologies, Inc. (NASDAQ: NSSC) is a leading company in the security products sector, offering a range of access control systems, alarm systems, and locking devices. Despite operating in a competitive market, NSSC has managed to report significant earnings and revenue figures. On May 5, 2025, the company announced an EPS of $0.28, exactly in line with analysts’ expectations. Moreover, it generated revenue of approximately $43.96 million, exceeding the forecasted $43.14 million.
However, NSSC is currently navigating through some challenges. A notable class action lawsuit has been filed against the company by Bronstein, Gewirtz & Grossman, LLC, alleging violations of securities laws. The lawsuit claims that NSSC provided misleading information to investors regarding its growth prospects and the strength of its hardware division, specifically targeting those who acquired securities between February 5, 2024, and February 3, 2025.
Despite these challenges, NSSC’s fiscal 2025 third-quarter results highlight some positive aspects. The company saw a 10.8% year-over-year decrease in net sales, totaling $44 million. However, its recurring service revenue (RSR) saw a 10.6% increase to $21.6 million, now accounting for 49% of total revenue. This shift indicates a growing reliance on stable, recurring income streams. On the downside, equipment sales dropped by 24.8% to $22.4 million, mainly due to reduced sales to three major distributors.
The company’s financial health is reflected in its key financial metrics. NSSC boasts a price-to-earnings (P/E) ratio of approximately 19.59, a price-to-sales ratio of about 5.06, and an enterprise value to sales ratio of around 4.63. Its low debt-to-equity ratio of approximately 0.031 suggests a conservative approach to leveraging, while a current ratio of 7.55 indicates strong liquidity. Furthermore, NSSC’s gross profit margin has improved to 57.2%, up from 53.8% in the previous fiscal year’s quarter. The Board of Directors has also declared a quarterly dividend of $0.14 per share, marking an increase from the previous dividend of $0.125 per share. Richard Soloway, Chairman and CEO, expressed satisfaction with the company’s 30% adjusted EBITDA return and a robust gross margin of 91% for RSR.
