What Happened?
Shares of security systems manufacturer Napco (NASDAQ: NSSC) jumped 10.5% in the afternoon session after the company reported strong fourth-quarter 2025 results that beat Wall Street's expectations.
The security products company posted revenue of $48.2 million for the period, a 12.2% increase from the same quarter in the previous year, surpassing forecasts. Earnings per share came in at $0.38, which was well ahead of the 32 cents analysts had predicted. The company's profitability also saw a significant boost, with its operating margin expanding to 30.6%, up from 26% in the same quarter last year. This demonstrated increased efficiency and contributed to the strong bottom-line performance that impressed investors.
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What Is The Market Telling Us
Napco’s shares are somewhat volatile and have had 10 moves greater than 5% over the last year. But moves this big are rare even for Napco and indicate this news significantly impacted the market’s perception of the business.
The biggest move we wrote about over the last year was 12 months ago when the stock dropped 28.2% on the news that the company reported weak fourth quarter results. Its revenue missed significantly, and its EBITDA fell short of Wall Street's estimates. The weak performance was attributed to reduced equipment sales to two large distributors. The first distributor is pulling back on all purchases from NSSC to reduce overall inventory levels, and the second distributor is going through a management restructuring. Overall, this was a weaker quarter.
Napco is down 5.1% since the beginning of the year, and at $39.28 per share, it is trading 11.5% below its 52-week high of $44.40 from November 2025. Investors who bought $1,000 worth of Napco’s shares 5 years ago would now be looking at an investment worth $2,881.
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