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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
Napco Security Technologies, Inc. (XNAS:NSSC) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
NSSC
Name:
NAPCO SECURITY TECHNOLOGIES, INC. (XNAS:NSSC)
Sector:
2.94M
Industry:
Security & Protection Services
CEO:
Mr. Richard Soloway
Total Employees:
1,149
Our Technological Advancement Rating
Our Rating:
A+
Technological advancement compared to industry is 1550.82% higher
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF NAPCO SECURITY TECHNOLOGIES, INC.(NSSC) AS PER DATA ANALYSIS OF LAST 3 YEARS AND COMPARISON WITH COMPETITORS/PEERS, AND SECURITY & PROTECTION SERVICES INDUSTRY. DATE: 07/09/2022
Primary Targets/Price Insights
Previous Close ($) :
29
One Month Price Target:
$29.21
Six Month Price Target :
$30.24
Likely Price in One Year's Time:
Ticker:
$31.48
Likely Trading Range Today Under (Normal Volatility)
$28.89
Price Upper limit ($) :
$29.2
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$27.14
This week:
$24.85
This month :
$20.7
Other Primary facts
Market Cap:
1.06B
Market Cap Classification:
Small Cap
Number of Shares
IPO Date:
36.73M
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
15.98%
-22.24%
Worst Daily Decline:
Our Options Trading Entry Points
Iron Condor entry points for options expiring in 1 week's time
Low risk (<2%) entry points
Buy Call:
Sell Call:
Buy Put:
Sell Put:
$37.60
$33.59
$20.40
$24.41
Medium risk (<10%) entry points
Buy Call
Sell Call
$32.29
Buy Put:
Sell Put:
$31.44
$25.70
$26.56
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
NSSC
Sharpe Ratio:
4.33%
Comparison:
NSSC, is amongst the top 20% stocks with highest risk-adjusted returns
Sharpe ratio is 147.73% higher than the industry
& ratio is 90.02% higher than the market/S&P 500 average
Average Returns/Yield of
NSSC
Daily returns:
0.15%
Weekly returns:
0.73%
Monthly returns:
2.94%
Yearly returns:
15.65%
Comparison of returns:
Average annual returns/yield (last 3 years) is 125.26% above industry average
Classification:
NSSC, is amongst the top 20% highest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.72
Statistical test of Returns:
NSSC has yielded returns statistically similar to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
3.19%
Weekly Volatility:
7.13%
Monthly Volatility:
14.25%
Yearly Volatility:
49.37%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
2.25%
Volatility in last five trading days has been -29.38% below long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-6.40%
Weekly VaR:
-14.31%
Monthly VaR:
-28.61%
How Much Can the price of
NSSC
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-24%
Worst case (decline):
>85%
This translates to price declining to:
$22.15
This translates to price declining to:
$4.35
Severe Crash Probability
Risk of crash in next 6/12 months: Very high (>70%)
What is Value at Risk (VaR)?
Risk Fundamentals
NSSC is a 101.93% riskier investment compared to the market/S&P 500 & is 73.00% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is 1.50% above industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
NSSC
Beta in relation to market/S&P 500--1.27
Expected beta in 1 year's time:
0.725
Expected beta in 3 year's time:
1.025
Unlevered (debt free) Beta:
1.202
Beta in relation to Nasdaq (XNAS):
0.525
Beta in relation to all global stocks::
0.716
Beta Comparison & Analysis
Beta of competitors/peers::
1.198
Beta is 6.37% higher than peers
Average Industry Beta:
1.346
Beta is -5.28% below industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
18.84%
Sustainable growth rate is 65.17% above industry average
Alpha provided | Alpha Analysis
Alpha provided:
0.234
Alpha is 612.55% above industry average alpha yield
Alpha is 1487% higher than market/& is unsustainably high
Analysis of Cost of Capital of
NSSC
Equity cost of capital:
0.119
Equity cost of capital is -3.94% below industry mean WACC
Unlevered (without debt) cost of capital:
11.21%
Before-tax cost of debt:
-2.36%
After-tax cost of debt:
-1.86%
Overall debt rating:
Highest AAA investment grade
Weighted average cost of capital (WACC):
-1.86%
WACC is 38.50% above industry mean WACC
Key Per-Share Metrics & Analysis
Revenue per share:
$3.40
Revenue growth rate per share of (3Y):
10.54
Annual revenue growth rate is -68.60% below industry average
EPS:
$0.48
Expected Annual growth rate of EPS (3Y):
14.08%
Expected future EPS growth rate is -222.75% lower than the Security & Protection Services industry
Free cash flow (FCF) per share:
$0.45
-
-
Debt per share
$0.19
EBITDA per share
$0.58
Valuation Analysis Today of
NSSC
P/E Ratio:
54.53
P/E Ratio of Competitors/Peers:
22.32
P/E ratio is 144.29% higher than main peers & is -56.34% lower than the industry
Stock price/value with industry average P/E ratio: $59.95
NSSC is -51.63% undervalued if valued using industry average P/E ratio
-
-
P/S (Price to Sales ratio):
8.54
Price to sales ratio is -29.69% below the industry mean
P/B (Price to book value ratio):
10.54
Price to free cash flow: 64.69
Price to free cash flow ratio is 10.43% higher than the industry
Net income growth rate (3Y):
99.48%
Net income growth rate is -638.33% lower than the industry average net income growth rate
Dividend Analysis
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Dividend History:
--$0.00
--$0.00
--$0.00
--$0.00
--$0.00
--$0.00
-
In-depth Debt & Leverage Analysis
Debt to equity ratio:
7.01%
Net debt to equity ratio:
-30.33%
Debt to assets ratio:
5.66%
Net debt to assets ratio:
-24.49%
Debt-to-asset ratio is -89.84% below industry average
Ability to repay debt:
Interest coverage ratio:
-128.2
Interest coverage ratio is -370.50% less than industry average
Looking forward:
Debt growth rate:
181.61%
Annual debt growth is 340% higher than industry average debt growth rate
Debt repayment rate in last quarter: -44.12%
Analysis of Key Statistics
Correlation of price movement with the market:
0.343
Statistical significance of correlation:
NSSC has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.527
Stock price is -34.91% less correlated with the market compared to the industry average correlation
R Squared (percentage of price movement explained by movement of the market):
0.527
Correlation of price movement with Nasdaq (^IXIC):
-0.001
Covariance of price movement with the market:
-0.002
Kurtosis
7.33
Returns have a significant fat-tails (leptokurtic), i.e., returns considerably higher or lower than the mean returns are more probable, compared to assets with normally distributed returns
Skewness of returns:
0.104
Returns are, approximately, symmetrical
Fundamental Analysis & Dupont Analysis of
NSSC
Gross Profit Margin Ratio:
178%
Operating Profit Margin Ratio:
12.46%
Operating profit margin is -42.99% lower than the industry
Net Profit Margin Ratio:
178%
Effective Tax Rate:
13.91%
Effective tax rate is -35.16% lower than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
16.51%
Return on equity (ROE) is 158.72% higher than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
13.34%
Return on assets (ROA) is 247.28% higher than the industry
Financial Leverage:
1.1x
Current Ratio:
6.21
Current ratio is 10.36% above industry average
Cash Conversion Cycle (days):
57.7
Cash conversion cycle is -81.40% below industry average
The remaining useful life of property plant & equipment is: 5.2 years
Stock based compensation to net income ratio:
0.53%
In-depth Efficiency Analysis
Revenue generated per employee:
108.6K
Each employee generates -61% less revenue than industry average revenue per employee
EBITDA generated per employee:
18.6K
Each employee generates -77% less EBITDA than industry average revenue per employee
Profit generated per employee:
14.5K
Each employee generates 5% more net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
2.6K
Each employee generates -58% less free cash flow than industry average revenue per employee
Assets/Capital per employee
24.1K
Each employee generates -58% less free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
Research & development (R&D) investment growth rate-- 5.00%
Growth rate in R&D investment/expenditure is -67.19% lower than the industry
Competitors/Peer firms of
NSSC
Air T Funding (XNAS:AIRTP)
CRA INTERNATIONAL, INC. (XNAS:CRAI)
RADA ELECTRONIC INDUSTRIES LTD (XNAS:RADA)
DXP ENTERPRISES, INC. (XNAS:DXPE)
AMMO, INC. (XNAS:POWW)
THCAW
EAGLE BULK SHIPPING INC. (XNAS:EGLE)
MUDRICK CAPITAL ACQUISITION CORPORATION II (XNAS:MUDS)
BARRETT BUSINESS SERVICES, INC. (XNAS:BBSI)
Current Analyst Ratings
Strong buy�4%
Buy�4%
Hold�0%
Sell�0%
Strong sell�0%
Overall analyst sentiment is: Strong buy
Income Statement
Period:
TTM
Date:
3/31/22
Revenue:
124.77M
Cost of Revenue:
Gross Profit:
R&D Expense
General & Admin Expenses:
Selling, General & Admin Expenses
Sales and Marketing Expenses
Other Expenses :
Operating Expenses :
Cost & Expenses :
Interest Income:
Interest Expenses:
Depreciation & Amortization:
EBITDA:
Operating Income:
Other Income Expenses:
Income Before Tax:
Income Tax Expense:
Net Income:
Balance Sheet
Date:
Calendar Year:
Period:
Cash & Cash Equivalents:
Short Term Investments:
Cash & Short Term Investments:
Net Receivables:
Inventory:
Other Current Assets:
Total Current Assets:
PP&E:
Goodwill:
Intangible Assets:
Long Term Investments:
Tax Assets:
Other Non-Current Assets:
Total Non-Current Assets:
Other Assets:
Total Assets:
Accounts Payable:
Short Term Debt:
Tax Payables:
Deferred Revenue:
Other Current Liabilities:
Total Current Liabilities:
Long Term Debt:
Other Non-Current Liabilities:
Total Non Current Liabilities:
Other Liabilities:
Total Liabilities:
Common Stock:
Retained Earnings:
Accumulated Other Comprehensive Loss:
Other Total Stockholders' Equity:
Total Stockholders' Equity:
Total Liabilities and Stockholders' Equity:
Total Investments:
Total Debt:
Net Debt:
70.16M
54.60M
7.86M
-
31.20M
-
-
39.06M
-
- 167.00K
2.19M
21.41M
15.54M
16.69M
19.39M
2.70M
16.69M
Statement of Cash Flow
Date:
Period:
438.00K
Differed Income Tax :
21.00K
Stock Based Compensation :
89.00K
Change in Working Capital :
- 930.00K
Accounts Receivables:
2.74M
Other Working Capital:
81.82M
Other Non-Cash Items:
- 3907.00K
Net Cash Provided by Operating Activities:
3.46M
Investments in PP&E:
- 522.00K
Net Acquisitions:
-
Purchases of Investments:
- 19.00K
Sales/Maturities of Investments:
Other Investing Activities:
Net Cash Used for Investing Activities:
Debt Repayment:
Common Stock Issued:
Common Stock Repurchased:
Dividend Paid:
Other Financing Activities:
Net Cash Used Provided by Financing Activities:
Effect of FOREX on Changes in Cash:
Net Changes in Cash:
Cash at End of Period:
Cash at Beginning of Period:
Operating Cash Flow:
Capital Expenditure:
Free Cash Flow (FCF):
9/30/21
2022
Q1
37.74M
5.44M
43.18M
25.56M
26.92M
1.87M
97.52M
15.39M
-
4.59M
-
368.00K
7.31M
27.66M
-
125.18M
6.22M
-
213.00K
-
9.48M
15.70M
7.09M
562.00K
8.38M
-
24.08M
212.00K
102.10M
-
- 1215.00K
September 30, 2021 at 6:00:00 AM
109.23M
101.09M
125.18M
-
7.09M
- 30659.0K
-
-
- 541.00K
2.17M
-
-
-
- 2153.00K
16.00K
-
2.94M
37.74M
34.81M
3.46M
- 522.00K
2.94M
Our Proprietary Portfolio Rating
Our Rating:
A+
Price Forecast/Expected Price in Next 5 Years of
NSSC
2023
2024
2025
2026
2027
$30.20
$32.78
$35.59
$38.64
$41.95