Napco Security Technologies, Inc (NASDAQ: NSSC)

Sector: Industrials Industry: Security & Protection Services CIK: 0000069633
Market Cap 1.57 Bn
P/B 8.51
P/E 33.18
P/S 8.19
ROIC (Qtr) 23.85
Div Yield % 1.25
Rev 1y % (Qtr) 12.20
Total Debt (Qtr) 5.26 Mn
Debt/Equity (Qtr) 0.03
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About

Investment thesis

Bull case

  • Strong operating cash flow of 54.74M provides robust 10.42x coverage of total debt 5.25M, indicating excellent debt servicing capability and financial flexibility.
  • Strong tangible asset base of 209.69M provides 39.90x coverage of total debt 5.25M, indicating robust asset backing and low credit risk.
  • Operating cash flow of 54.74M provides exceptional 47.85x coverage of interest expenses 1.14M, showing strong debt service capability.
  • Operating cash flow of 54.74M provides strong 43.79x coverage of stock compensation 1.25M, indicating sustainable incentive practices.
  • Robust free cash flow of 53.66M exceeds capital expenditure of 1.08M by 49.68x, indicating strong organic growth funding capability.

Bear case

  • Operating cash flow of 54.74M provides thin coverage of dividend payments of (19.01M) with a -2.88 ratio, suggesting potential dividend sustainability issues if operational performance deteriorates.
  • Investment activities of 1.96M provide weak support for R&D spending of 13.13M, which is 0.15x, suggesting potentially insufficient investment in innovation relative to other capital deployment.
  • Operating cash flow of 54.74M is outpaced by equity issuance of (18.79M) (-2.91 ratio), indicating concerning reliance on equity markets for funding operations.
  • Tangible assets of 209.69M provide limited backing for working capital of 158.77M, which is 1.32x, suggesting increased operational risk in market downturns.
  • Other current assets of (5.27M) provide weak coverage of payables of 5.85M, which is -0.90x, suggesting potential working capital stress in near term.

Product and Service Breakdown of Revenue (2025)

Geographical Breakdown of Revenue (2025)

Peer comparison

Companies in the Security & Protection Services
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 ALLE Allegion plc 14.00 Bn 21.75 3.44 1.98 Bn
2 MSA MSA Safety Inc 7.99 Bn 374.33 5.71 0.63 Bn
3 BCO Brinks Co 6.24 Bn 112.89 1.74 4.32 Bn
4 BRC Brady Corp 4.99 Bn 38.51 4.29 0.18 Bn
5 ADT ADT Inc. 4.95 Bn -9.23 1.68 7.81 Bn
6 CXW CoreCivic, Inc. 2.04 Bn 18.69 0.98 1.04 Bn
7 GEO Geo Group Inc 2.02 Bn 8.48 0.80 1.63 Bn
8 NSSC Napco Security Technologies, Inc 1.57 Bn 33.18 8.19 0.01 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 6.97 1.53
EV to Cash from Ops. EV/CFO 27.10 15.25
EV to Debt EV to Debt 282.28 44.60
EV to EBIT EV/EBIT 26.26 8.47
EV to EBITDA EV/EBITDA 27.52 14.35
EV to Free Cash Flow [EV/FCF] EV/FCF 27.65 28.03
EV to Market Cap EV to Market Cap 0.94 0.95
EV to Revenue EV/Rev 7.72 2.53
Price to Book Value [P/B] P/B 8.51 3.48
Price to Earnings [P/E] P/E 33.18 32.21
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Div Coverage (Qtr) 2.49 106.48
Dividend Payout Ratio % Div Payout % (Qtr) 41.00 25.28
Dividend per Basic Share Div per Share (Qtr) 0.55 0.36
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 36.21 7.91
Interest Coverage Int. cover (Qtr) 49.38 -11.72
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) 60.38 -7.19
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) 21.97 23.04
Dividend Growth (1y) % Div 1y % (Qtr) 21.11 -3.73
EBIAT Growth (1y) % EBIAT 1y % (Qtr) -0.75 35.26
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 0.40 87.34
EBIT Growth (1y) % EBIT 1y % (Qtr) 2.00 29.11
EBT Growth (1y) % EBT 1y % (Qtr) 0.73 41.98
EPS Growth (1y) % EPS 1y % (Qtr) 0.76 37.27
FCF Growth (1y) % FCF 1y % (Qtr) 8.46 -41.16
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 4.42 7.42
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.90 0.71
Cash Payout Ratio Cash Payout (Qtr) 0.34 0.05
Cash Ratio Cash Ratio (Qtr) 4.62 1.61
Current Ratio Curr Ratio (Qtr) 7.99 3.37
Debt to Equity Ratio Debt/Equity (Qtr) 0.03 1.13
Interest Cover Ratio Int Coverage (Qtr) 49.38 -11.72
Times Interest Earned Times Interest Earned (Qtr) 49.38 -11.72
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 30.60 -5.57
EBIT Margin % EBIT Margin % (Qtr) 29.42 -15.45
EBT Margin % EBT Margin % (Qtr) 28.82 -14.45
Gross Margin % Gross Margin % (Qtr) 56.20 38.13
Net Profit Margin % Net Margin % (Qtr) 24.70 -16.17