NAPCO Security Technologies Inc

Napco Security Technologies reported record fourth-quarter net sales of $55.8 million, up 10% year over year, and said its annualized recurring revenue run rate has reached approximately $103 million based on July recurring revenues. The company also announced a 13.3% increase in its quarterly dividend to $0.17 per share. For the full fiscal year, non-GAAP net income rose 32% to a record $57.3 million, or $1.60 per diluted share, while GAAP net income increased 0.9% to $43 million, or $1.20 per diluted share. Recurring service revenue grew almost 13% to $25.3 million in the quarter with a 90.1% gross margin, and the company ended the year with $137.6 million in cash, cash equivalents and marketable securities and no debt. Kevin Buchel has assumed the role of Chief Executive Officer and President, succeeding founder Richard Soloway, who becomes Founder and Executive Chairman.

Napco Security Technologies shares surged nearly 15% on Monday after the company reported fourth-quarter results above Wall Street estimates. Net revenue rose 10% to a quarterly record $55.8 million, beating consensus by $3.25 million, while adjusted earnings per share came in at $0.50, exceeding expectations by $0.12. Equipment revenue increased 7.7% to $30.5 million, driven by strong demand for door-locking products and a 36% growth in intrusion product sales, primarily from StarLink fire communicators. CEO Kevin Buchel noted a rebound in equipment sales, which grew 10% for the year. The stock was trading at $43.70 in morning trading.

StockStory identifies Napco Security Technologies as a cash-heavy stock worth buying, while flagging Marqeta and ePlus as companies that may struggle. Napco holds a net cash position of $119.7 million, representing 9.2% of its market cap, and has posted 14.2% annual revenue growth over the last five years. In contrast, Marqeta has a net cash position of $707.3 million, or 44.1% of its market cap, but its revenue grew only 6.3% annually over the past two years and its operating margin declined by 5.3 percentage points. ePlus has a net cash position of $285.7 million, or 13.2% of its market cap, yet its annual revenue growth of 4.8% over two years and shrinking free cash flow margin raise concerns.