NAPCO SECURITY TECHNOLOGIES, INC

Debt-free security-hardware-plus-recurring-services maker with elite margins and returns, but a softer revenue year.

Strengths

• Elite margins and returns — operating margin 25.5% (89th), ROA 21.9% (96th), net margin 23.9% (88th)
• Debt-free, very liquid — current ratio 6.75 (91st)
• Strong cash generation from recurring services — FCF margin 28.3% (86th), OCF margin 29.5%

Risks

• Revenue and earnings dipped — revenue -3.8% (42nd), net income -12.9% (43rd)
• Distributor reliance and competition — risk factors flag dependence on distributors and larger competitors
• Recurring-revenue growth must continue to sustain the multiple — qualitative (per 10-K)

Notable findings

• Exec changeRecent 8-K item 5.02 8-K ↗
• Customer concentration~48% of revenue from one customer/distributor — These revenues, which currently have a gross margin of approximately 91% for the fiscal year ended June 30, 2025, represent approximately 48% of our total revenue for the fiscal year ended of June 30,
• Fund exitedNotable fund(s) exited this quarter: VANGUARD GROUP INC
• Notable holderHeld by 5 notable fund(s): STATE STREET CORP, RENAISSANCE TECHNOLOGIES LLC, GOLDMAN SACHS GROUP INC +2 more (as of 2026-03-31)
• Insider sellingInsider selling — 3 open-market sale(s) by 1 insider(s) (~$15M, last 6mo) Form 4 ↗