NSSC - Napco: RSR Growth Strong, But Valuation Starting To Look Pricey
2025-08-27 08:16:01 ET
Napco Security Technologies I nvestment Thesis
Napco Security Technologies, Inc. (NASDAQ: NSSC ) has been one of my strongest calls this year, with the stock up around 50% since my March Buy . The company's story hasn't changed much since my May publication either: recurring service revenue (RSR) is growing at a healthy double-digit clip, now making up almost half of sales at ~91% gross margins, and hardware demand showed signs of recovery in Q4 FY25. We should even see it improve further as recent tariff-driven price increases flow through. The company has a cash-rich, debt-free balance sheet, management is executing steady buybacks and dividend payouts, and its new cloud-based access control platform is ready to expand the services base. On the whole, Napco still looks like a business built for durability and long-term compounding. So, I'm sticking with another Buy....
Napco: RSR Growth Strong, But Valuation Starting To Look Pricey