After A Disappointing Last Month, Napco Security Technologies Stock Looks Poised For A Comeback


Napco Security Technologies Inc. stock (NASDAQ: NSSC) is down 8% in the past month (21 trading days), underperforming the S&P 500 which was roughly unchanged over this period. If you look at the change over the last five and ten days, too, the stock has returned -8.2% and -13%, respectively, underperforming the broader market on both occasions. Napco announced a 2-for-1 stock split in December, which came in effect last week, but the sharp share price drop since, comes as a surprise after NSSC reported strong Q1 ’22 earnings in early November (Napco’s fiscal year ends in June), with revenue at $31.05 million, up strongly from $23.17 million in Q1 ’21. Additionally, operating expenses grew at a slower rate than the growth in revenue, leading to operating margins rising from 11.5% in Q1 ’21 to 13.5% in Q1 ’22. Combined with a $3.9 million gain on debt extinguishment and a lower effective tax rate, EPS rose from $0.13 to $0.42 over this period.

Now, is NSSC stock set to continue its underperformance or could we expect a rally? We believe that there is a strong 66% chance of a rise in NSSC stock over the next month (21 trading days) based on our machine learning analysis of trends in the stock price over the last ten years. See our analysis on NSSC Stock Chance of Rise. For additional details about NSSC historical returns and comparison to peers, see Napco Security Technologies (NSSC) Stock Return. Additionally, for details about NSSC revenues and comparison to peers, see Napco Security Technologies (NSSC) Revenue Comparison.


Twenty-One Day: NSSC -8%, vs. S&P500 -0.06%; Underperformed market

(13% likelihood event; 66% probability of rise over next 21 days)

  • NSSC stock dropped 8% the last twenty-one trading days (one month), compared to a broader market (S&P500) marginal drop of 0.06%
  • A change of -8% or more over twenty-one trading days is a 13% likelihood event, which has occurred 316 times out of 2515 in the last ten years
  • Of these 316 instances, the stock has seen a positive movement over the next twenty-one trading days on 208 occasions
  • This points to a 66% probability for the stock rising over the next twenty-one trading days

Ten Day: NSSC -13%, vs. S&P500 -2.3%; Underperformed market

(3% likelihood event; 61% probability of rise over next 10 days)

  • NSSC stock dropped 13% over the last ten trading days (two weeks), compared to a broader market (S&P500) drop of 2.3%
  • A change of -13% or more over ten trading days is a 3% likelihood event, which has occurred 72 times out of 2516 in the last ten years
  • Of these 72 instances, the stock has seen a positive movement over the next ten trading days on 44 occasions
  • This points to a 61% probability for the stock rising over the next ten trading days

Five Day: NSSC -8.2%, vs. S&P500 -2.4%; Underperformed market

(4% likelihood event; 65% probability of rise over next five days)

  • NSSC stock dropped 8.2% over a five-day trading period ending 1/7/2022, compared to the broader market (S&P500) drop of 2.4%
  • A change of -8.2% or more over five trading days (one week) is a 4% likelihood event, which has occurred only 108 times out of 2516 in the last ten years
  • Of these 108 instances, the stock has seen a positive movement over the next five trading days on 70 occasions
  • This points to a 65% probability for the stock rising over the next five trading days

 

What if you’re looking for a more balanced portfolio instead? Here’s a high-quality portfolio that’s beaten the market consistently since the end of 2016.

 Returns Jan 2022
MTD [1]
2022
YTD [1]
2017-22
Total [2]
 NSSC Return -10% -10% 428%
 S&P 500 Return -1% -1% 110%
 Trefis MS Portfolio Return -6% -6% 271%

[1] Month-to-date and year-to-date as of 1/9/2022
[2] Cumulative total returns since the end of 2016

 

Invest with Trefis Market Beating Portfolios

See all Trefis Price Estimates


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.



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