Quality Investor

Napco Security Technologies, Inc.

Rank #80Capital Return

NSSC · Nasdaq · Industrials

Napco Security Technologies, Inc. (NSSC) — Rank #80 by gross profitability (GP/assets 0.50) · ROE 22.5% · Piotroski F-Score N/A.

As-of 2026-09-15 · CIK 0000069633 · all metrics point-in-time as of the filing date.

About

Napco Security Technologies, Inc. engages in the development, manufacturing, and sale of electronic security systems for commercial, residential, institutional, industrial, and governmental applications in the United States and internationally.

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Its access control systems include various types of identification readers, control panels, PC-based computers, and electronically activated door-locking devices; intrusion and fire alarm systems, consists of various detectors, a control panel, a digital keypad and signaling equipment; and door locking devices comprise microprocessor-based electronic door locks with push button, card readers and bio-metric operation, door alarms, mechanical door locks, and simple dead bolt locks. The company's alarm systems include automatic communicators, cellular communication devices, control panels, combination control panels/digital communicators and digital keypad systems, fire alarm control panels, and area detectors; and video surveillance systems comprise video cameras, control panels, video monitors, or PCs. It also buys and resells various identification readers, video cameras, PC-based computers, and various peripheral equipment for access control and video surveillance systems; offers school security products; and markets peripheral and related equipment manufactured by other companies. The company markets and sells its products to independent distributors, dealers, and installers of security equipment. Napco Security Technologies, Inc.

was founded in 1969 and is headquartered in Amityville, New York.

Industry
Security & Protection Services
Sector
Industrials
State
DE
Filer Category
Large accelerated filer
Fiscal Year End
June 30

Price History

NSSC+93.1% · +14.1% CAGRSPY+80.5% · +12.5% CAGR

Company Snapshot

P/E and reverse DCF are the primary valuation lenses at this stage.

Market Cap

$1.28B

P/E (annual)

29.8

P/S (annual)

6.3

P/B

6.7

P/OCF (annual)

20.9

Shareholder Yield

3.3%

Employees

1,049

Industry

Security & Protection Services

Exchange

Nasdaq

Signal Flags

1 green1 yellow1 red
Revenue growth acceleratingGrowth rate increasing year over year
Disclosure regressionA previously-disclosed line item is no longer reported — worth checking the filing for why
Operating margin decliningOperating margin lower than prior year

Quality Profile

Profitability

1/1 pass
GP / assets
0.50
Return on equity
22.5%
Gross margin trend
PASS

Safety

1/1 pass
Balance-sheet safety
PASS
Debt / equity
0.25
Current ratio
4.90×
Net cash
$137.56M

Cash Flow

3/3 pass
Positive FCF
PASS
Cash-backed earnings
PASS
Accruals healthy
PASS
SBC / revenue
0.5%

Growth

2/2 pass
Revenue growth
11.4%
Piotroski F-Score
N/A
Share dilution
-1.7%

Terry Smith quality gate

Passes 4/5 Terry Smith thresholds

1 of 5 threshold not computable from filed data.

What Growth Is Priced In

Implied revenue growth (10Y)

8.8%

incredible deal

The annual FCF growth rate today's price requires over a 10-year horizon (discount rate 10%, terminal growth 2.5%).

Buyback tailwind: -1.7% — per-share value needs a total required return of 7.2% once share-count change is priced in.

vs. own 6-year median revenue growth: 12.0%

within its own history

Cost-of-equity sensitivity (implied growth at different discount rates)

r = 8%

4.4%

r = 10% (base)

8.8%

r = 12%

12.6%

Net debt / market cap: -10.7%

Note: current FCF margin is 1.5σ above its historical mean — implied growth may understate valuation risk if the margin reverts.

Base FCF: $59.2M3Y mean FCF: $51.5M

Valuation History

Current multiple vs historical range at each filing date. Band spans 25th-75th percentile.

P / E

Price / diluted EPS

31.3xFair
18.0xmed 27.7x53.7x

P / S

Price / revenue per share

6.7xFair
1.5xmed 4.3x8.8x

P / B

Price / book value per share

7.1xFair
2.2xmed 5.3x9.2x

P / GP

Price / gross profit per share

11.3xFair
3.7xmed 9.7x17.7x

P / FCF

Price / free cash flow per share

22.8xCheap
18.4xmed 30.9x153.2x

FCF yield, shareholder yield, and buyback activity are the primary reads at this stage.

Profitability

Gross profitability (GP / assets)

0.50

Primary signal (Novy-Marx).

3rd of 5 SIC 3669 peers

Return on equity

22.5%

Gross margin

59.2%

1st of 5 SIC 3669 peers

Revenue growth (YoY)

11.4%

Gross margin improving

Margin trend vs prior year.

PASS

Operating Leverage

2023202420252026
Revenue vs COGS
Revenue vs OpEx
Op. Income vs Revenue

Growth

Revenue CAGR (3Y)

6.0%

Revenue CAGR (5Y)

12.1%

Earnings CAGR (3Y)

16.6%

FCF CAGR (3Y)

39.7%

Anti-fragile safety

Balance-sheet safety

Composite anti-fragile check.

PASS

Debt / equity

0.25

Current ratio

4.90×

1st of 5 SIC 3669 peers

Quick ratio

3.91×

Net cash

$137.56M

Cash & equivalents minus total debt.

Cash-flow health

Free cash flow

$59.23M

Operating cash flow minus capex.

Positive free cash flow

PASS

FCF / net income

0.38

Cash-backing of earnings.

FCF/NI divergence

Unfavorable divergence (yellow flag).

PASS

Accruals healthy

Cash-backed earnings.

PASS

SBC / revenue

0.5%

Stock-based comp intensity.

Dividend safety

Composite score

3.0 / 5

Good
Payout ratio
47.3%4/5 Strong
FCF coverage
2.91×4/5 Strong
Dividend growth streak
3 yr2/5 Fair
Balance-sheet health
D/E 0.25 · IC N/A2/5 Fair

Piotroski F-Score

F-Score

N/A

Only 8/9 components determinable.

Lifecycle Phase History

20212026
Op. Leverage
Hypergrowth
Capital Return
Value