National Presto Industries: Acceleration Has Arrived

2025-02-26 10:19:26 ET

Summary

• National Presto Industries' defense segment backlog has surged 100.2% YoY, driven by acquisitions, new contracts, and restocking efforts for Ukraine and Israel.
• NPK's defense revenue should continue to accelerate in 2025.
• Despite legacy appliance and safety segments underperforming, the defense segment's growth justifies the investment, with NPK trading at an attractive sub-10x multiple.
• Further earnings growth potential via margin expansion and increased focus on the defense segment.

National Presto Industries ( NPK ) has undergone a transformation from branded small appliances to manufacturing grenades in the past few decades. In FY24, NPK earned $388m of revenue , of which $284m (73%) was related to their sales through their defense segment. NPK’s backlog is accelerating, and while the stock has rebounded from recent lows, I believe that significant upside remains in the shares....

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