NSSC · Technology(communications equipment, nec) · 10 years of annual accounts filed with the SEC · latest fiscal year ended 2026-06-30
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Napco Security Technologies, Inc reported revenue of $202.3 million in fiscal 2026, after growing 9.2% a year over the previous 9 years. Its operating margin widened from 9.2% in 2018 to 22.6%. Of the $242.9 million its operations generated over 10 years, 21.3% went to dividends and 18.4% to buybacks; the share count fell 4.7%. On the accounting screens, it passes 5 of 8 Piotroski tests, its Altman Z'' of 13.07 is in the safe zone and its Beneish M-score is below the -1.78 line; none of the six cross-checks between its statements fires.
Revenue, fiscal 2026202.3M+9.2% a year over 9 years
Operating margin22.6%gross margin 59.2%
Return on invested capital—
Free cash flow after stock pay58.2M28.8% of revenue
Net debt ÷ EBITDA—net debt —
Piotroski F-score5/8tests of improvement passed
Share counts are in today's shares. The SEC's filings restate only recent years after a split, so these jumps were read as splits and the older years scaled to match — otherwise per-share figures would compare different units:
2-for-1 before fiscal 2020.
Is it growing?
Revenue and the operating income it turns into. Growth that does not reach operating income is growth bought with margin.
RevenueOperating income
0100.0M200.0M300.0M
2018Revenue 91.7MOperating income 8.4M
2019Revenue 102.9MOperating income 13.5M
2020Revenue 101.4MOperating income 10.1M
2021Revenue 114.0MOperating income 17.9M
2022Revenue 143.6MOperating income 18.2M
2023
2023Revenue 170.0MOperating income 30.3M
2024Revenue 188.8MOperating income 53.8M
2025Revenue 181.6MOperating income 46.3M
2026Revenue 202.3MOperating income 45.6M
2018201920202021202220232023202420252026
Compound growth a year
3 yrs
5 yrs
9 yrs
Revenue
+6.0%
+7.1%
+9.2%
Operating income
+14.6%
+20.2%
+20.7%
Net income
+16.6%
+17.0%
+21.2%
Earnings per share
+17.8%
+17.7%
+21.8%
Free cash flow per share
+41.1%
+54.8%
+28.3%
Dividend per share
+109.0%
—
—
Shares
-1.0%
-0.5%
-0.5%
Falling shares are buybacks: each remaining share owns more of the company.
Does it earn more than its capital costs?
Margins say how much of each sale is kept; return on invested capital says how much the business earns on the money it needs to operate. Growth only creates value when that return is above the cost of the capital.
Return on invested capitalCost of capital today · 10.2%
0.0%5.0%10.0%15.0%20.0%
2018Return on invested capital 12.2%
2019Return on invested capital 17.4%
2020Return on invested capital 9.7%
2021Return on invested capital 16.0%
2022
2023
2023
2024
2025
2026
2018201920202021202220232023202420252026
Economic profit
Economic profit
-2.0M02.0M4.0M6.0M
2018Economic profit 1.3M
2019Economic profit 5.1M
2020Economic profit -379,178
2021Economic profit 5.6M
2022
2023
2023
2024
2025
2026
2018201920202021202220232023202420252026
(return on capital − cost of capital) × capital invested: the profit left after paying for the money used. Today's cost of capital is applied to every year, since a past one cannot be rebuilt honestly.
Return on equity
22.5%
Return on assets
18.0%
Asset turnover
0.85×
Research & development
6.8% of revenue
Overheads (SG&A)
21.9% of revenue
Is the profit cash, and where does the cash go?
Net income is an accounting opinion; free cash flow is what was left in the bank after investing. Stock-based pay does not leave the bank — shareholders pay it through dilution — so it is shown taken off as well.
Net incomeFree cash flowAfter stock-based pay
020.0M40.0M60.0M
2018Net income 7.6MFree cash flow 6.6MAfter stock-based pay 6.4M
2019Net income 12.2MFree cash flow 6.7MAfter stock-based pay 6.5M
2020Net income 7.8MFree cash flow 8.7MAfter stock-based pay 8.1M
2021Net income 15.4MFree cash flow 22.0MAfter stock-based pay 21.5M
2022Net income 19.6MFree cash flow 6.8MAfter stock-based pay 5.2M
2023
2023Net income 27.1MFree cash flow 21.7MAfter stock-based pay 20.3M
2024Net income 49.8MFree cash flow 43.8MAfter stock-based pay 42.0M
2025Net income 43.4MFree cash flow 51.4MAfter stock-based pay 49.9M
2026Net income 43.0MFree cash flow 59.2MAfter stock-based pay 58.2M
2018201920202021202220232023202420252026
Where 10 years of operating cash went, 2018–2026
242.9M generated by the business. Each band is its share of that total.
Reinvested in the business 7%16.0M
Acquisitions 0%0
Dividends 21%51.8M
Share buybacks 18%44.6M
Kept, or used to pay down debt 54%130.5M
Over the same years it paid 8.7M in stock. The share count fell 4.7%. 35.9M of the buybacks went beyond offsetting that dilution.
Per share
Earnings per shareFree cash flow per shareDividend per share
$0.00$0.50$1.00$1.50$2.00
2018Earnings per share $0.20Free cash flow per share $0.17
2019Earnings per share $0.33Free cash flow per share $0.18
2020Earnings per share $0.21Free cash flow per share $0.23
2021Earnings per share $0.42Free cash flow per share $0.60
2022Earnings per share $0.53Free cash flow per share $0.19
2023
2023Earnings per share $0.73Free cash flow per share $0.59Dividend per share $0.06
2024Earnings per share $1.34Free cash flow per share $1.18Dividend per share $0.36
2025Earnings per share $1.19Free cash flow per share $1.41Dividend per share $0.37
2026Earnings per share $1.20Free cash flow per share $1.65Dividend per share $0.57
2018201920202021202220232023202420252026
Shares outstanding
Diluted shares
35.5M36.0M36.5M37.0M37.5M38.0M
2018Diluted shares 37.6M
2019Diluted shares 37.2M
2020Diluted shares 37.0M
2021Diluted shares 36.8M
2022Diluted shares 36.9M
2023
2023Diluted shares 37.0M
2024Diluted shares 37.1M
2025Diluted shares 36.5M
2026Diluted shares 35.9M
2018201920202021202220232023202420252026
How strong is the balance sheet?
Debt is not bad in itself; debt the business cannot service in a bad year is. Net debt is debt minus cash, and below zero the company holds more cash than it owes.
Net debt
-40.0M-30.0M-20.0M-10.0M0
2018Net debt -5.3M
2019Net debt -8.0M
2020Net debt -14.3M
2021Net debt -30.9M
2022
2023
2023
2024
2025
2026
2018201920202021202220232023202420252026
Net debt ÷ EBITDA
—
Interest coverage
— operating income ÷ interest
Current ratio
4.90 current assets ÷ current liabilities
Cash conversion cycle
—
Three classic screens of the accounts
Each asks a different question of the same statements — is it improving, does it look like a company heading for distress, do the accounts resemble ones that were manipulated. None is a verdict; each shows what moves it.
Piotroski F-score
Is the business improving? Nine yes-or-no tests, this year against last.
5of 8 tests passed
✓ProfitableReturn on assets above zeropassed
✓Cash from operationsOperating cash flow above zeropassed
✕Profitability improvedReturn on assets higher than a year beforefailed
✓Profit backed by cashOperating cash flow above net income (low accruals)passed
–Less long-term debtLong-term debt as a share of assets fell — not reportedno data
✕More liquidCurrent ratio higher than a year beforefailed
✓No new sharesShare count did not growpassed
✓Better gross marginGross margin higher than a year beforepassed
✕Sells more per assetAsset turnover higher than a year beforefailed
Where it misleads: it measures change, not level. An excellent business that stood still for a year scores low; a poor one recovering from a disaster scores high.
Altman Z''-score
Does the balance sheet look like those of companies that went bankrupt?
13.07safe zone
1.12.6
Working capital ÷ assets 0.69 × 6.56+4.55
Retained earnings ÷ assets 0.93 × 3.26+3.02
Operating income ÷ assets 0.19 × 6.72+1.28
Equity ÷ liabilities 4.01 × 1.05+4.21
Where it misleads: buybacks. A company that returns so much cash that its equity turns small or negative sinks the last two ratios without being anywhere near bankruptcy. Banks and insurers do not fit the model at all.
Beneish M-score
Do the accounts resemble those of companies that manipulated their earnings?
-3.04below the -1.78 line
-1.78
Receivables vs sales 1.00 (not reported, set to 1)+0.92
Gross margin slipping 0.94+0.50
Soft assets 0.67+0.27
Sales growth 1.11+0.99
Slower depreciation 1.02+0.12
Overheads vs sales 0.94-0.16
Profit not in cash -0.08-0.36
Leverage rising 1.47-0.48
Where it misleads: fast growth and acquisitions. Sales growth carries a heavy weight, so a company growing 50% a year scores like a suspect without having done anything. It is a screen from a 1999 study, not an accusation.
Where the statements disagree
Cross-checks between the income statement, the balance sheet and the cash flow for the latest year, each with the benign reading and the worrying one.
None of the six cross-checks fires for the latest year: receivables and inventory move with revenue, profit turns into cash, investment keeps up with depreciation, the tax rate is ordinary and debt is moderate.
What is it worth, under which assumptions?
A company is worth the cash it will generate, brought back to today. This model projects revenue with growth that fades over the years, applies a free cash flow margin, and discounts the result at the cost of capital. Every assumption says where it came from, and all of them can be changed.
Value per share, with these assumptions$26.11discounted at 10.2% a year · 51% of it from after year 10
Type a share price on the left to ask the reverse questions: what growth, what margin or what discount rate that price implies.
What the value implies, in the usual multiples
At this model's value
Price ÷ earnings
21.8×
Enterprise value ÷ EBITDA
19.7×
Enterprise value ÷ revenue
4.6×
Free cash flow yield
6.2%
From cash flows to a value per share
10 years of cash flow, today459.1M
Everything after, today478.0M
The whole business937.1M
Minus net debt-0
What belongs to shareholders937.1M
Divided among 35.9M shares: <strong>$26.11</strong> each.
The projection next to its history
Reported free cash flow after stock pay, then the model's. A projection that looks nothing like the past needs a reason.
ReportedProjected
025.0M50.0M75.0M100.0M
2018Reported 6.4M
2019Reported 6.5M
2020Reported 8.1M
2021Reported 21.5M
2022Reported 5.2M
2023
2023Reported 20.3M
2024Reported 42.0M
2025Reported 49.9M
2026Reported 58.2M
2027Projected 58.8M
2028Projected 63.7M
2029Projected 68.5M
2030Projected 73.2M
2031Projected 77.7M
2032Projected 81.8M
2033Projected 85.7M
2034Projected 89.0M
2035Projected 91.9M
2036Projected 94.2M
2018202020222023202520272029203120332035
Year by year
2027
2028
2029
2030
2031
2032
2033
2034
2035
2036
Revenue
220.5M
238.8M
256.8M
274.4M
291.1M
306.8M
321.1M
333.8M
344.6M
353.2M
Growth
9.0%
8.3%
7.6%
6.8%
6.1%
5.4%
4.7%
3.9%
3.2%
2.5%
Cash margin
26.7%
26.7%
26.7%
26.7%
26.7%
26.7%
26.7%
26.7%
26.7%
26.7%
Free cash flow
58.8M
63.7M
68.5M
73.2M
77.7M
81.8M
85.7M
89.0M
91.9M
94.2M
Worth today
53.4M
52.5M
51.2M
49.7M
47.8M
45.8M
43.5M
41.0M
38.4M
35.8M
If the least-known inputs move
Value per share as two inputs change at a time. Neighbouring cells that differ a lot are the conclusion: the value depends on numbers nobody knows to a point.
The discount rate and growth forever
discount ↓ · forever →
1.5%
2.0%
2.5%
3.0%
3.5%
9.2%
27
28
30
32
35
9.7%
25
27
28
30
32
10.2%
24
25
26
28
29
10.7%
22
23
24
26
27
11.2%
21
22
23
24
25
Year-one growth and the final margin
margin ↓ · growth →
5.0%
7.0%
9.0%
11.0%
13.0%
21.3%
19
20
22
24
26
24.0%
21
22
24
26
28
26.7%
22
24
26
28
31
29.3%
24
26
28
30
33
32.0%
26
28
30
33
35
All the inputs moving at once
5,000 valuations, each with growth, final margin, discount rate and growth forever drawn at random around the values on the left (spreads of 3.0%, 4.0%, 1.0% and 0.5%). Not a probability — the spreads are assumptions too — but an honest picture of how wide the answer is.
10th percentile$19.95
Median$26.18
90th percentile$35.13
$20.00$30.00$40.00
Half of the simulations land between <b>$22.59</b> and <b>$30.28</b>; one in ten below $19.95, one in ten above $35.13.
Does the long run make sense?
15.2×The terminal value prices the business in year 10 at 15.2 times that year's EBITDA.
Free growthIn year 10 free cash flow is at or above after-tax operating profit, yet the model grows 2.5% forever. Growth needs reinvestment; this assumes it comes for free, which flatters the terminal value.
51%of the value comes from after year 10. The more of it, the more the answer depends on the part nobody can see.
What lenders charge, after the tax saving on interest: 6.67% × (1 − 13.6%) = <strong>5.76%</strong>.
Weighted by how much of each the company uses (book value (no price given)): <strong>10.17%</strong>, the rate every future cash flow is discounted at.
What it has filed lately
The last twelve months at the SEC, most important first: annual and quarterly reports, events, large holders and insiders.
Every Form 4 filed in the last twelve months, read line by line: 6 filings by 4 people. Open-market purchases and sales are counted apart from awards, option exercises and shares withheld for taxes.
Bought on the open market—none in the period
Sold on the open market$26.5M6 sale(s) by 2 insider(s)
Under pre-arranged plans0%of the sales followed a 10b5-1 plan set months earlier
A Form 4 says what happened, when, how many shares and at what price. It does not say why: a sale can be diversification, a tax bill or a plan fixed months earlier, and an award is pay, not a purchase. Nothing here is a reason to buy or sell anything.
Which large funds report holding it
From the Form 13F of the 28 institutions followed on this site, as of the end of their last reported quarter. A 13F is filed up to 45 days later and shows only long positions in US-listed shares.
Accounts from the company's own SEC filings; lines some companies do not report are shown as a dash rather than estimated. The risk-free rate is the 10-year US Treasury yield. A DCF is a way of making assumptions explicit, not a forecast: it states what the company would be worth if the assumptions held. The scores are screens that point where to look, not verdicts. Nothing here is a recommendation to buy or sell.
