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Results: Napco Security Technologies, Inc. Beat Earnings Expectations And Analysts Now Have New Forecasts

Napco Security Technologies, Inc. (NASDAQ:NSSC) investors will be delighted, with the company turning in some strong numbers with its latest results. It was overall a positive result, with revenues beating expectations by 8.3% to hit US$48m. Napco Security Technologies also reported a statutory profit of US$0.34, which was an impressive 31% above what the analysts had forecast. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

See our latest analysis for Napco Security Technologies

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Taking into account the latest results, the most recent consensus for Napco Security Technologies from six analysts is for revenues of US$189.8m in 2024. If met, it would imply a satisfactory 7.0% increase on its revenue over the past 12 months. Per-share earnings are expected to swell 10% to US$1.29. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$184.3m and earnings per share (EPS) of US$1.12 in 2024. So it seems there's been a definite increase in optimism about Napco Security Technologies' future following the latest results, with a nice increase in the earnings per share forecasts in particular.

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With these upgrades, we're not surprised to see that the analysts have lifted their price target 40% to US$44.60per share. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. There are some variant perceptions on Napco Security Technologies, with the most bullish analyst valuing it at US$50.00 and the most bearish at US$36.00 per share. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Napco Security Technologies' past performance and to peers in the same industry. The period to the end of 2024 brings more of the same, according to the analysts, with revenue forecast to display 14% growth on an annualised basis. That is in line with its 14% annual growth over the past five years. Compare this with the broader industry, which analyst estimates (in aggregate) suggest will see revenues grow 5.2% annually. So although Napco Security Technologies is expected to maintain its revenue growth rate, it's definitely expected to grow faster than the wider industry.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Napco Security Technologies' earnings potential next year. Pleasantly, they also upgraded their revenue estimates, and their forecasts suggest the business is expected to grow faster than the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.

With that in mind, we wouldn't be too quick to come to a conclusion on Napco Security Technologies. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for Napco Security Technologies going out to 2026, and you can see them free on our platform here..

It is also worth noting that we have found 1 warning sign for Napco Security Technologies that you need to take into consideration.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.