NAPCO Q1 revenue misses estimates on lower distributor purchases

Overview

• US security equipment maker's fiscal Q1 revenue rose 1.7% to record high, but missed analyst expectations

• Adjusted EBITDA for fiscal Q1 missed analyst expectations

• Equipment revenue declined due to lower distributor purchases

Outlook

• Company says recurring service revenue has a prospective annual run rate of $106 mln

• Company sees end-market demand as healthy based on distributor sell-through trends

Result Drivers

• RECURRING SERVICE REVENUE - Co said growth in recurring service revenue drove overall results, with RSR rising 11.5% and delivering high margins

• DISTRIBUTOR PURCHASES - Co said equipment revenue fell due to two locking distributors reducing purchases, though end-market sell-through improved

• HIGHER GROSS MARGIN - Co said gross margin improved year-over-year

Company press release:

Key Details

Analyst Coverage

• The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 6 "strong buy" or "buy", no "hold" and no "sell" or "strong sell"

• The average consensus recommendation for the communications & networking peer group is "buy"

• Wall Street's median 12-month price target for NAPCO Security Technologies, Inc. is $50.00, about 27.1% above its October 30 closing price of $39.35

• The stock recently traded at 23 times the next 12-month earnings vs. a P/E of 23 three months ago

Reuters Recommended Reads

• Nov 2 - IDEXX Laboratories Q3 revenue beats estimates, lifts FY profit outlook

• Nov 2 - Information Services Group Q3 revenue edges past estimates on APAC growth

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(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)